Exhibit 4.2
CITIZENS COMMUNICATIONS COMPANY
and
THE BANK OF NEW YORK, as Collateral Agent,
Securities Intermediary and Custodial Agent
and
THE CHASE MANHATTAN BANK, as Warrant Agent
PLEDGE AGREEMENT
Dated as of June __, 2001
TABLE OF CONTENTS
PAGE
ARTICLE 1 - DEFINITIONS......................................................2
ARTICLE 2 - PLEDGE...........................................................5
Section 2.1 Pledge...................................................5
Section 2.2 Control; Financing Statement.............................6
Section 2.3 Termination..............................................6
ARTICLE 3 - DISTRIBUTIONS ON PLEDGED COLLATERAL..............................7
Section 3.1 Interest Payments........................................7
Section 3.2 Principal Payments Following Termination Event...........7
Section 3.3 Principal Payments Prior To or On Warrant
Settlement Date........................................7
Section 3.4 Payments to Warrant Agent................................8
Section 3.5 Assets Not Properly Released.............................8
ARTICLE 4 - CONTROL..........................................................8
Section 4.1 Establishment of Collateral Account......................8
Section 4.2 Treatment as Financial Assets............................9
Section 4.3 Sole Control by Collateral Agent.........................9
Section 4.4 Securities Intermediary's Location.......................9
Section 4.5 No Other Claims..........................................9
Section 4.6 Investment and Release..................................10
Section 4.7 Statements and Confirmations............................10
Section 4.8 Tax Allocations.........................................10
Section 4.9 No Other Agreements.....................................10
Section 4.10 Powers Coupled With An Interest.........................10
Section 4.11 Wire Transfer Instructions..............................11
ARTICLE 5 - INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY EQUITY UNITS AND
RE-ESTABLISHMENT OF EQUITY UNITS..................................11
Section 5.1 Initial Deposit of Notes................................11
Section 5.2 Establishment of Treasury Equity Units..................11
Section 5.3 Reestablishment of Equity Units.........................12
Section 5.4 Termination Event.......................................13
Section 5.5 Cash Settlement.........................................14
Section 5.6 Early Settlement........................................16
Section 5.7 Application of Proceeds in Settlement of Warrants.......16
Section 5.8 Tax Event Redemption....................................19
TABLE OF CONTENTS
(continued)
PAGE
ARTICLE 6 - VOTING RIGHTS - PLEDGED NOTES...................................19
ARTICLE 7 - RIGHTS AND REMEDIES.............................................20
Section 7.1 Rights and Remedies of the Collateral Agent.............20
Section 7.2 Tax Event Redemption....................................21
Section 7.3 Initial and Additional Remarketing; Treasury
Portfolio Cash Payment to Remarketing Agent
or Its Designated Entity..............................21
Section 7.4 Substitutions...........................................23
ARTICLE 8 - REPRESENTATIONS AND WARRANTIES; COVENANTS.......................23
Section 8.1 Representations and Warranties..........................23
Section 8.2 Covenants...............................................24
ARTICLE 9 - THE COLLATERAL AGENT, THE SECURITIES INTERMEDIARY AND THE
CUSTODIAL AGENT...............................................24
Section 9.1 Appointment, Powers and Immunities......................24
Section 9.2 Instructions of the Company.............................25
Section 9.3 Reliance by Collateral Agent, Securities
Intermediary and Custodial Agent......................26
Section 9.4 Rights in Other Capacities..............................26
Section 9.5 Non-Reliance on Collateral Agent,
Securities Intermediary and Custodial Agent...........27
Section 9.6 Compensation and Indemnity..............................27
Section 9.7 Failure to Act..........................................28
Section 9.8 Resignation of Collateral Agent, Securities
Intermediary and Custodial Agent......................29
Section 9.9 Right to Appoint Agent or Advisor.......................30
Section 9.10 Survival................................................30
Section 9.11 Exculpation.............................................30
ARTICLE 10 - AMENDMENT......................................................31
Section 10.1 Amendment Without Consent of Holders....................31
Section 10.2 Amendment With Consent of Holders.......................31
Section 10.3 Execution of Amendments.................................32
Section 10.4 Effect of Amendments....................................32
Section 10.5 Reference to Amendments.................................32
ARTICLE 11 - MISCELLANEOUS..................................................33
Section 11.1 No Waiver...............................................33
Section 11.2 Governing Law...........................................33
Section 11.3 Notices.................................................33
TABLE OF CONTENTS
(continued)
PAGE
Section 11.4 Successors and Assigns..................................34
Section 11.5 Counterparts............................................34
Section 11.6 Severability............................................34
Section 11.7 Expenses, Etc...........................................34
Section 11.8 Security Interest Absolute..............................35
Section 11.9 Notice of Tax Event, Tax Event Redemption and
Termination Event.....................................35
Section 11.10 Book-entry Interests....................................36
TABLE OF CONTENTS
(continued)
PAGE
EXHIBIT A INSTRUCTION FROM WARRANT AGENT TO COLLATERAL AGENT
(Establishment of Treasury Equity Units).........................A-1
EXHIBIT B INSTRUCTION FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY
(Establishment of Treasury Equity Units).........................B-1
EXHIBIT C INSTRUCTION FROM WARRANT AGENT TO COLLATERAL AGENT
(Reestablishment of Equity Units )...............................C-1
EXHIBIT D INSTRUCTION FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY
(Reestablishment of Equity Units)................................D-1
EXHIBIT E NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY TO
WARRANT AGENT (Cash Settlement Amounts)..........................E-1
EXHIBIT F INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING.............F-1
EXHIBIT G INSTRUCTION TO CUSTODIAL AGENT REGARDING WITHDRAWAL FROM
REMARKETING......................................................G-1
EXHIBIT H NOTICE TO DELIVER TREASURY PORTFOLIO ............................H-1
EXHIBIT I INSTRUCTION TO WARRANT AGENT AND SECURITIES
INTERMEDIARY.....................................................I-1
EXHIBIT J INSTRUCTION FROM WARRANT AGENT TO COLLATERAL
AGENT............................................................J-1
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of June __, 2001, among Citizens Communications
Company, a Delaware corporation (the "COMPANY"), The Bank of New York, a New
York banking corporation, as collateral agent (in such capacity, together with
its successors in such capacity, the "COLLATERAL Agent"), as securities
intermediary with respect to the Collateral Account (as defined below) (in such
capacity, together with its successors in such capacity, the "SECURITIES
INTERMEDIARY"), and as custodial agent for the Company (in such capacity,
together with its successors in such capacity, the "CUSTODIAL AGENT") and The
Chase Manhattan Bank, as warrant agent and as attorney-in-fact of the Holders
from time to time of the Securities under the Warrant Agreement (in such
capacity, together with its successors in such capacity, the "WARRANT AGENT").
RECITALS
The Company and the Warrant Agent are parties to the Warrant Agreement
dated as of the date hereof (as modified and supplemented and in effect from
time to time, the "WARRANT AGREEMENT"), pursuant to which there may be issued up
to $_________ of Equity Units (including any Treasury Equity Units (each, as
referred to below), the "SECURITIES") (including $ __ of Equity Units relating
to the over-allotment option granted to the underwriters pursuant to the
Underwriting Agreement).
Each Security, at issuance, consists of a unit comprised of (a) a warrant
(the "WARRANT") under which the Holder will purchase from the Company on August
17, 2004 (the "WARRANT SETTLEMENT DATE"), for an amount equal to $25 (the
"STATED AMOUNT"), a number of shares of Citizens Communications Company common
stock, par value $0.25 per share ("COMMON STOCK"), equal to the Settlement Rate,
and (b) a note (a "NOTE") issued by the Company under the Indenture (as referred
to below), designated therein as the __% Notes due ____ 2006, and having a
principal amount equal to the Stated Amount.
Pursuant to the terms of the Warrant Agreement and the Warrants, the
Holders of the Securities have irrevocably authorized the Warrant Agent, as
attorney-in-fact of such Holders, to, among other things, execute and deliver
this Agreement on behalf of such Holders and grant the pledge provided herein of
the Collateral Account to secure the Obligations (as defined below).
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Warrant Agent, on its own behalf and
as attorney-in-fact of the Holders from time to time of the Securities, agree as
follows:
ARTICLE 1
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular, and nouns and
pronouns of the masculine gender include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States;
(c) the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision;
(d) the following terms which are defined in the UCC shall have the
meanings set forth therein: "CERTIFICATED SECURITY," "CONTROL," "FINANCIAL
ASSET," "ENTITLEMENT ORDER," "SECURITIES ACCOUNT" and "SECURITY ENTITLEMENT";
(e) the following terms have the meanings assigned to them in the Warrant
Agreement: "ACT," "APPLICABLE AMOUNT," "APPLICABLE OWNERSHIP INTEREST,"
"BANKRUPTCY CODE," "BENEFICIAL OWNER," "BUSINESS DAY," "CASH SETTLEMENT,"
"CERTIFICATE," "CODE," "DEPOSITARY," "EARLY SETTLEMENT," "EARLY SETTLEMENT
AMOUNT," "EARLY SETTLEMENT DATE," "EQUITY UNIT," "FAILED FINAL REMARKETING,"
"FAILED INITIAL REMARKETING," "FINAL REMARKETING DATE," "HOLDER," "Indenture,"
"INDENTURE TRUSTEE," "INITIAL REMARKETING DATE," "NOTES," "OFFICERS'
CERTIFICATE," "OPINION OF COUNSEL," "OUTSTANDING SECURITIES," "PERSON,"
"PURCHASE PRICE," "QUOTATION AGENT," "REDEMPTION AMOUNT," "REMARKETING AGENT,"
"REMARKETING AGREEMENT," "REMARKETING FEE," "SETTLEMENT RATE," "SUCCESSFUL
INITIAL REMARKETING," "SUPPLEMENTAL REMARKETING Agreement," "TAX EVENT
REDEMPTION AMOUNT," "TAX EVENT REDEMPTION DATE," "TERMINATION EVENT," "TREASURY
EQUITY UNIT," "TREASURY PORTFOLIO," "UNDERWRITING AGREEMENT," "WARRANT," and
"WARRANT SETTLEMENT DATE"; and
(f) the following terms have the meanings given to them in this Section
1(f):
"AGREEMENT" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time by one or more amendments hereof
entered into pursuant to the applicable provisions hereof.
"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.
"COLLATERAL ACCOUNT" means the collective reference to:
2
(1) the securities account of The Bank of New York, as Collateral
Agent, maintained by the Securities Intermediary and designated "The Bank
of New York, as Collateral Agent of Citizens Communications Company, as
pledgee of The Chase Manhattan Bank, as the Warrant Agent, on behalf of
and as attorney-in-fact for the Holders";
(2) all investment property and other financial assets from time to
time credited to the Collateral Account, including, without limitation,
(A) the Applicable Ownership Interests (as specified in Clause (A) of the
definition of such term) of the Holders with respect to the Treasury
Portfolio which are a component of the Equity Units from time to time; (B)
the Notes and security entitlements relating thereto which are a component
of the Equity Units from time to time, (C) any Treasury Securities and
security entitlements relating thereto delivered from time to time upon
establishment of Treasury Equity Units in accordance with SECTION 5.2
hereof and (D) payments made by Holders pursuant to SECTION 5.4 hereof;
(3) all Proceeds (other than interest payments in respect of the
Pledged Notes) of any of the foregoing (whether such Proceeds arise before
or after the commencement of any proceeding under any applicable
bankruptcy, insolvency or other similar law, by or against the pledgor or
with respect to the pledgor); and
(4) all powers and rights now owned or hereafter acquired under or
with respect to the Collateral Account ((2), (3) and (4), being
collectively referred to as the "COLLATERAL").
"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.
"OBLIGATIONS" means, with respect to each Holder, the collective reference
to all obligations and liabilities of such Holder under such Holder's Warrant,
the Warrant Agreement, and this Agreement or any other document made, delivered
or given in connection herewith or therewith, in each case whether on account of
principal, interest (including, without limitation, interest accruing or
accreting before and after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
such Holder, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Company or the Collateral Agent or the Securities Intermediary or the Custodial
Agent that are required to be paid by the Holder pursuant to the terms of any of
the foregoing agreements).
"PERMITTED INVESTMENTS" means any one or more of the following:
3
(1) 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 of the timely payment thereof or such indebtedness
constitutes a general obligation of it);
(2) deposits, certificates of deposit or acceptances with an
original maturity of 365 days or less of any institution which is rated at
least A- by Standard & Poor's Ratings Services ("S&P") or at least A3 by
Xxxxx'x Investors Service, Inc. ("MOODY'S") and which is a member of the
Federal Reserve System having combined capital and surplus and undivided
profits of not less than $200.0 million at the time of deposit (and which
may include the Collateral Agent);
(3) 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 (2);
(4) 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 as
to timely payment by the full faith and credit of the United States
Government;
(5) 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 S&P
or at least equal to "P-1" by Moody's; and
(6) investments in money market funds (including, but not limited
to, money market funds managed by the Collateral Agent or an affiliate of
the Collateral Agent) registered under the Investment Company Act of 1940,
as amended, rated in the highest applicable rating category by S&P or
Moody's.
"PLEDGE" means the lien and security interest created by this Agreement.
"PLEDGED NOTES" means the principal amount of the Notes (and not interest
payments in respect thereof) and security entitlements with respect to such
principal amount from time to time credited to the Collateral Account and not
then released from the Pledge.
"PLEDGED TREASURY SECURITIES" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.
"PROCEEDS" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, cash, instruments, securities,
financial assets (as defined
4
in Section 8-102(a)(9) of the UCC) and other property received, receivable or
otherwise distributed upon the sale, exchange, collection or disposition of any
financial assets from time to time held in the Collateral Account.
"SEPARATE SECURITIES" means any Notes that are not Pledged Notes.
"TRADES" means the Treasury/Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.
"TRADES REGULATIONS" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations are
used herein as therein defined.
"TRANSFER" means in the case of certificated securities in registered
form, delivery as provided in Section 8-301(a) of the UCC, indorsed to the
transferee or in blank by an effective endorsement; in the case of Treasury
Securities, registration of the transferee as the owner of such Treasury
Securities on TRADES; and in the case of security entitlements, including,
without limitation, security entitlements with respect to Treasury Securities, a
securities intermediary indicating by book entry that such security entitlement
has been credited to the transferee's securities account.
"TREASURY SECURITIES" means zero-coupon U.S. Treasury securities (Cusip
No. 17453B 30 9) which mature on August 16, 2004.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York from time to time.
"VALUE" means, with respect to any item of Collateral on any date, as to
(1) Cash, the face amount thereof, (2) Treasury Securities or Pledged Treasury
Securities, the aggregate principal amount thereof due at maturity and (3) the
Notes or the Pledged Notes, the aggregate principal amount thereof due at
maturity.
"WARRANT AGENT" has the meaning specified in the paragraph preceding the
recitals of this Agreement.
ARTICLE 2
PLEDGE
Section 2.1 COLLATERAL ACCOUNT PLEDGE; DEFINITIVE NOTE PLEDGE.
(a) Each Holder, acting through the Warrant Agent as such Holder's
attorney-in-fact, hereby pledges and grants to the Collateral Agent, as agent of
and for the benefit of the Company, a continuing first priority security
interest in and to, and a lien upon and right of set-off against, all of such
Holder's right, title and interest in and to the Collateral
5
Account to secure the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Obligations.
The Collateral Agent shall have all of the rights, remedies and recourses with
respect to the Collateral afforded a secured party by the UCC, in addition to,
and not in limitation of, the other rights, remedies and recourses afforded to
the Collateral Agent by this Agreement; and
(b) The Pledged Notes which are not Global Securities (as defined in the
Indenture) and the promissory notes or instruments evidencing the Pledged Notes,
and all cash, instruments and other property and assets from time to time
received, receivable or otherwise distributed in respect of the Pledged Notes,
other than in each case any interest payments payable in respect of the Pledged
Notes.
Section 2.2 CONTROL; DELIVERY OF DEFINITIVE NOTES; FINANCING STATEMENT.
(a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of ARTICLE 4 of this Agreement.
(b) As soon as practicable after the date of initial issuance of the
Securities, the Company shall deliver to the Collateral Agent a financing
statement under the UCC which was prepared for filing by the Company in the
Office of the Secretary of State of the State of New York and any other
jurisdictions which the Company deems necessary, signed by the Warrant Agent, as
attorney-in-fact for the Holders, as Debtors, and describing the Collateral,
together with evidence of the filing thereof and of the filing information of
the filing officer of each office in which so filed.
(c) All certificates and all promissory notes and instruments evidencing
the Pledged Notes issued in definitive form shall be delivered to and held by or
on behalf of the Agent, for itself and the benefit of the Company. All Pledged
Notes shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Collateral
Agent and all promissory notes or other instruments evidencing the Pledged Notes
shall be endorsed by the Warrant Agent.
Section 2.3 TERMINATION.
As to each Holder, this Agreement and the Pledge created hereby shall
terminate upon the satisfaction of such Holder's Obligations. Upon such
termination, the Securities Intermediary shall Transfer such Holder's portion of
the Collateral to the Warrant Agent for distribution to such Holder in
accordance with his, her or its interest, free and clear of any lien, pledge or
security interest created hereby.
6
ARTICLE 3
DISTRIBUTIONS ON PLEDGED COLLATERAL
Section 3.1 INTEREST PAYMENTS.
All interest payments received by the Securities Intermediary on account
of the Notes, the Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio or Permitted Investments
from time to time held in the Collateral Account shall be distributed to the
Warrant Agent (The Chase Manhattan Bank, ABA No. 000000000, DDA No.
_____________, FFC A/C No. _____________, Re: Citizens Communications Company
Equity Units) for the benefit of the applicable Holders in whose names the
Equity Units or Treasury Equity Units are registered at the close of business on
the record date preceding the date of such interest payment as provided in the
Warrant Agreement.
Section 3.2 PRINCIPAL PAYMENTS FOLLOWING TERMINATION EVENT.
All payments received by the Securities Intermediary following a
Termination Event of (1) the principal amount of Pledged Notes or security
entitlements thereto, (2) the Applicable Ownership Interests (as specified in
Clause (A) of the definition thereof) of the Treasury Portfolio or (3) the
principal amount of the Pledged Treasury Securities or security entitlements
with respect thereto, shall be distributed to the Warrant Agent for the benefit
of the applicable Holders for distribution to such Holders in accordance with
their respective interests.
Section 3.3 PRINCIPAL PAYMENTS PRIOR TO OR ON WARRANT SETTLEMENT DATE.
(a) Subject to the provisions of SECTION 7.2, and except as provided in
CLAUSE 3.3(b) below, if no Termination Event shall have occurred, all payments
received by the Securities Intermediary of (1) the principal amount with respect
to the Pledged Notes or security entitlements with respect thereto, (2) the
Applicable Ownership Interests (as specified in Clause (A) of the definition
thereof) of the Treasury Portfolio or (3) the principal amount of Pledged
Treasury Securities or security entitlements with respect thereto, shall be held
and invested in Permitted Investments until the Warrant Settlement Date and on
the Warrant Settlement Date distributed to the Company as provided in SECTION
5.6 hereof. Any balance remaining in the Collateral Account shall be distributed
to the Warrant Agent for the benefit of the applicable Holders for distribution
by the Warrant Agent to such Holders in whose names the Equity Units or Treasury
Equity Units are registered at the close of business on the record date
preceding the date of such distribution in accordance with their respective
interests. Upon the request of the Securities Intermediary, the Company shall
instruct the Securities Intermediary as to the type of Permitted Investments in
which any payments made under this Section shall be invested, provided, however,
that if the Company fails to deliver such instructions by 10:30 a.m. (New York
City time), the Securities Intermediary shall invest such payments in the
Permitted Investments described in clause 6 of the definition of Permitted
Investments.
7
(b) All payments received by the Securities Intermediary of (1) the
principal amount with respect to the Pledged Notes or security entitlements with
respect thereto, (2) the Applicable Ownership interests (as specified in Clause
(A) of the definition thereof) of the Treasury Portfolio or (3) the principal
amount of Treasury Securities or security entitlements with respect thereto,
that, in each case, have been released from the Pledge shall be distributed to
the Warrant Agent for the benefit of the applicable Holders for distribution by
the Warrant Agent to such Holders in whose names the Equity Units or Treasury
Equity Units are registered at the close of business on the record date
preceding the date of such distribution in accordance with their respective
interests.
Section 3.4 PAYMENTS TO WARRANT AGENT.
The Securities Intermediary shall use all commercially reasonable efforts
to deliver payments to the Warrant Agent hereunder to the account designated by
the Warrant Agent for such purpose not later than the close of business on the
Business Day such payment is received by the Securities Intermediary; provided,
however, that if such payment is received on a day that is not a Business Day or
after 11:00 A.M. (New York City time) on a Business Day, then the Securities
Intermediary shall use all commercially reasonable efforts to deliver such
payment no later than 10:30 a.m. (New York City time) on the next succeeding
Business Day.
Section 3.5 ASSETS NOT PROPERLY RELEASED.
If the Warrant Agent or any Holder shall receive any principal payments on
account of financial assets credited to the Collateral Account and not released
therefrom in accordance with this Agreement, the Warrant Agent or such Holder
shall hold the same as trustee of an express trust for the benefit of the
Company and, upon receipt of an Officers' Certificate of the Company so
directing, promptly deliver the same to the Securities Intermediary for credit
to the Collateral Account or to the Company for application to the Obligations
of the Holders, and the Warrant Agent and Holders shall acquire no right, title
or interest in any such payments of principal amounts so received.
ARTICLE 4
CONTROL
Section 4.1 ESTABLISHMENT OF COLLATERAL ACCOUNT.
The Securities Intermediary hereby confirms that:
(1) the Securities Intermediary has established the Collateral
Account;
(2) the Collateral Account is a securities account;
(3) subject to the terms of this Agreement, the Securities
Intermediary shall treat the Warrant Agent as entitled to exercise the
rights that comprise any financial asset credited to the Collateral
Account;
8
(4) all property delivered to the Securities Intermediary pursuant
to this Agreement or the Warrant Agreement will be credited promptly to
the Collateral Account;
(5) all securities or other property underlying any financial assets
credited to the Collateral Account shall be registered in the name of the
Securities Intermediary, indorsed to the Securities Intermediary or in
blank, or credited to another securities 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
Warrant Agent or any Holder, payable to the order of the Warrant Agent or
any Holder or specially indorsed to the Warrant Agent or any Holder.
Section 4.2 TREATMENT AS FINANCIAL ASSETS.
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.
Section 4.3 SOLE CONTROL BY COLLATERAL AGENT.
Except as provided in ARTICLE 6, at all times prior to the termination of
the Pledge, the Collateral Agent shall have sole control of the Collateral
Account, and the Securities Intermediary shall take instructions and directions
with respect to the Collateral Account solely from the Collateral Agent. If at
any time the Securities Intermediary shall receive an entitlement order issued
by the Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Warrant Agent or any Holder or any other Person. Until termination of the
Pledge, the Securities Intermediary will not comply with any entitlement orders
issued by the Warrant Agent or any Holder.
Section 4.4 SECURITIES INTERMEDIARY'S LOCATION.
The Collateral Account, and the rights and obligations of the Securities
Intermediary, the Collateral Agent, the Warrant Agent and the Holders with
respect thereto, shall be governed by the laws of the State of New York.
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be the Securities Intermediary's location.
Section 4.5 NO OTHER CLAIMS.
Except for the claims and interest of the Collateral Agent and of the
Warrant Agent and the Holders in the Collateral Account, the Securities
Intermediary (without making any investigation) does not know of any claim to,
or interest in, the Collateral Account or in any financial asset credited
thereto. If any Person asserts any lien, encumbrance or adverse claim (including
any writ, garnishment, judgment, warrant of attachment, execution or similar
process) against the Collateral Account or in any
9
financial asset carried therein, the Securities Intermediary will promptly
notify the Collateral Agent and the Warrant Agent.
Section 4.6 INVESTMENT AND RELEASE.
All proceeds of financial assets from time to time deposited in the
Collateral Account shall be invested and reinvested as provided in this
Agreement. At all times prior to termination of the Pledge, no property shall be
released from the Collateral Account except in accordance with this Agreement or
upon written instructions of the Collateral Agent.
Section 4.7 STATEMENTS AND CONFIRMATIONS.
The Securities Intermediary will send copies of all statements,
confirmations and other correspondence concerning the Collateral Account and any
financial assets credited thereto to each of the Warrant Agent and the
Collateral Agent, simultaneously, at their addresses for notices under this
Agreement.
Section 4.8 TAX ALLOCATIONS.
The Warrant Agent shall report all items of income, gain, expense and loss
recognized in the Collateral Account, to the extent such reporting is required
by law (as notified in writing by the Company), to the Internal Revenue Service
and all state and local taxing authorities under the names and taxpayer
identification numbers of the Holders. None of the Securities Intermediary, the
Collateral Agent or the Custodial Agent shall have any tax reporting duties
hereunder.
Section 4.9 NO OTHER AGREEMENTS.
The Securities Intermediary has not entered into, and prior to the
termination of the Pledge will not enter into, any agreement with any other
Person relating to the Collateral Account or any financial assets credited
thereto, including, without limitation, any agreement to comply with entitlement
orders of any Person other than the Collateral Agent.
Section 4.10 POWERS COUPLED WITH AN INTEREST.
The rights and powers granted in this ARTICLE 4 to the Collateral Agent
have been granted in order to perfect its security interests in the Collateral
Account, are powers coupled with an interest and will be affected neither by the
bankruptcy of the Warrant Agent or any Holder nor by the lapse of time. The
obligations of the Securities Intermediary under this ARTICLE 4 shall continue
in effect until the termination of the Pledge.
10
Section 4.11 WIRE TRANSFER INSTRUCTIONS.
Any moneys transferred hereunder for deposit into the Collateral Account
shall be delivered by wire transfer in immediately available funds addressed as
follows: The Bank of New York, ABA No. 000000000; Corporate Trust Agency GLA
111565; Ref.: BNY as Collateral Agent for Citizens Communications Pledge;
Account No.: ____________.
ARTICLE 5
INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY EQUITY UNITS
AND RE-ESTABLISHMENT OF EQUITY UNITS
Section 5.1 INITIAL DEPOSIT OF NOTES.
Prior to or concurrently with the execution and delivery of this
Agreement, the Warrant Agent, on behalf of the initial Holders of the Equity
Units, shall transfer to the Securities Intermediary, for credit to the
Collateral Account, the Notes or security entitlements relating thereto, and the
Securities Intermediary shall indicate by book-entry that a securities
entitlement to such Notes has been credited to the Collateral Account.
Section 5.2 ESTABLISHMENT OF TREASURY EQUITY UNITS.
(a) If no Tax Event Redemption shall have occurred, at any time on or
prior to the fifth Business Day immediately preceding the Warrant Settlement
Date, a Holder of Equity Units shall have the right to substitute Treasury
Securities or security entitlements with respect thereto for the Pledged Notes
securing such Holder's obligations under the Warrant comprising a part of such
Holder's Equity Units in integral multiples of 40 Equity Units by:
(1) Transferring to the Securities Intermediary for credit to the
Collateral Account Treasury Securities or security entitlements with
respect thereto having a Value equal to the aggregate principal amount of
the Pledged Notes to be released accompanied by a notice, substantially in
the form of Exhibit C to the Warrant Agreement, and any applicable fees
and expenses of the Collateral Agent incurred in connection with such
substitution, whereupon the Warrant Agent shall deliver to the Collateral
Agent a notice, substantially in the form of EXHIBIT A hereto, (A) stating
that such Holder has Transferred Treasury Securities or security
entitlements with respect thereto to the Securities Intermediary for
credit to the Collateral Account, (B) stating the Value of the Treasury
Securities or security entitlements with respect thereto Transferred by or
on behalf of such Holder and (C) requesting that the Collateral Agent
release from the Pledge the Pledged Notes that are a component of such
Equity Units; and
(2) delivering the related Equity Units to the Warrant Agent.
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Upon receipt of such notice and confirmation that Treasury Securities or
security entitlements with respect thereto have been credited to the Collateral
Account as described in such notice, the Collateral Agent shall instruct the
Securities Intermediary by a notice, substantially in the form of EXHIBIT B
hereto, to release such Pledged Notes from the Pledge by Transfer to the Warrant
Agent for distribution to such Holder, free and clear of any lien, pledge or
security interest created hereby.
(b) Upon credit to the Collateral Account of Treasury Securities or
security entitlements with respect thereto delivered by a Holder of Equity Units
and receipt of the related instruction from the Collateral Agent, the Securities
Intermediary shall release the related Pledged Notes and shall promptly transfer
the same to the Warrant Agent for distribution by the Warrant Agent to such
Holder, free and clear of any lien, pledge or security interest created hereby.
(c) All Treasury Securities delivered under this Agreement for credit to
the Collateral Account shall be delivered addressed as follows: Treasuries, The
Bank of New York; ABA No.: 000000000; BK of NYC/Cust. Account No.: _______;
Contact: Xxxxxxxx Xxxxxx, (000) 000-0000.
Section 5.3 REESTABLISHMENT OF EQUITY UNITS.
(a) If no Tax Event Redemption shall have occurred, at any time on
or prior to the seventh Business Day immediately preceding the Warrant
Settlement Date, a Holder of Treasury Equity Units shall have the right to
reestablish Equity Units by substitution of Notes or security entitlements with
respect thereto for Pledged Treasury Securities in integral multiples of 40
Treasury Equity Units by:
(1) Transferring to the Securities Intermediary for credit to the
Collateral Account Notes or security entitlements with respect thereto
having a principal amount equal to the Value of the Pledged Treasury
Securities to be released, accompanied by a notice, substantially in the
form of Exhibit C to the Warrant Agreement, and all applicable fees
whereupon the Warrant Agent shall deliver to the Collateral Agent a
notice, substantially in the form of EXHIBIT C hereto, stating that such
Holder has Transferred the Notes or security entitlements with respect
thereto, to the Securities Intermediary for credit to the Collateral
Account and requesting that the Collateral Agent release from the Pledge
the Pledged Treasury Securities related to such Treasury Equity Units; and
(2) delivering the related Treasury Equity Units to the Warrant
Agent.
Upon receipt of such notice and confirmation that Notes or security
entitlements with respect thereto have been credited to the Collateral Account
as described in such notice, the Collateral Agent shall instruct the Securities
Intermediary by a notice in the form provided in EXHIBIT D hereto to release
such Pledged Treasury Securities from Pledge by Transfer to the Warrant Agent
for distribution to such Holder, free and clear of any lien, pledge or security
interest created hereby.
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(b) Upon credit to the Collateral Account of Notes or security
entitlements with respect thereto delivered by a Holder of Treasury Equity Units
and receipt of the related instruction from the Collateral Agent, the Securities
Intermediary shall release the Pledged Treasury Securities and shall promptly
transfer the same to the Warrant Agent for distribution by the Warrant Agent to
such Holder, free and clear of any lien, pledge or security interest created
hereby.
Section 5.4 TERMINATION EVENT.
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Warrant Agent that a Termination Event has occurred, the
Collateral Agent shall release all Collateral from the Pledge and shall promptly
Transfer:
(1) any Pledged Notes or security entitlements with respect thereto
or the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio (if a Tax Event
Redemption or a Successful Initial Remarketing has occurred and the
Treasury Portfolio has become a component of the Equity Units);
(2) any Pledged Treasury Securities or security entitlements with
respect thereto, and
(3) payments by Holders (or the Permitted Investments of such
payments) pursuant to SECTION 5.5 hereof,
to the Warrant Agent for the benefit of the Holders for distribution to such
Holders in accordance with their respective interests, free and clear of any
lien, pledge or security interest or other interest created hereby; provided,
however, if any Holder shall be entitled to receive less than $1,000 with
respect to his interest in the Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, the
Warrant Agent shall have the right to dispose of such interest for cash and
deliver to such Holder cash in lieu of delivering the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio.
(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, the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, the Pledged Treasury
Securities or payments by Holders (or the Permitted Investments of such
payments) pursuant to SECTION 5.5 hereof, as the case may be, as provided by
this SECTION 5.4, the Warrant Agent shall:
(1) use its commercially reasonable efforts to obtain an opinion of
a nationally recognized law firm reasonably acceptable to the Collateral
Agent to the effect that, as a result of the Company's being the debtor in
such a bankruptcy
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case, the Collateral Agent will not be prohibited from releasing or
Transferring the Collateral as provided in this SECTION 5.4, and shall
deliver such opinion to the Collateral Agent within 10 days after the
occurrence of such Termination Event, and if (A) the Warrant Agent shall
be unable to obtain such opinion within 10 days after the occurrence of
such Termination Event or (B) the Collateral Agent shall continue, after
delivery of such opinion, to refuse to effectuate the release and Transfer
of all Pledged Notes, the Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, all
the Pledged Notes, the Pledged Treasury Securities, the payments by
Holders (or the Permitted Investments of such payments) pursuant to
SECTION 5.5 hereof or the Proceeds of any of the foregoing, as the case
may be, as provided in this SECTION 5.4, then the Warrant Agent shall
within 15 days after the occurrence of such Termination Event commence an
action or proceeding in the court having jurisdiction of the Company's
case under the Bankruptcy Code seeking an order requiring the Collateral
Agent to effectuate the release and transfer of Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio, all the Pledged Notes, the Pledged Treasury
Securities, or the payments by Holders (or the Permitted Investments of
such payments) pursuant to SECTION 5.5 hereof, or as the case may be, as
provided by this SECTION 5.4.
Section 5.5 CASH SETTLEMENT.
(a) Unless the Treasury Portfolio has replaced the Notes as a component of
Equity Units as a result of a successful Initial Remarketing of the Pledged
Notes or a Tax Event Redemption, a Holder of Equity Units may settle the related
Warrant with Cash on the fourth business day immediately preceding the Warrant
Settlement Date. Upon receipt by the Collateral Agent of (1) (i) in the case of
Equity Units, a notice from the Warrant Agent promptly after the receipt by the
Warrant Agent of a notice from a Holder of Equity Units prior to or at 11:00
a.m. (New York City time) on the fourth Business Day immediately preceding the
Warrant Settlement Date that such Holder has elected, in accordance with the
procedures specified in Section 5.03(a)(i) of the Warrant Agreement to effect a
Cash Settlement, or (ii) in the case of Treasury Equity Units, receipt of such
notice on the second Business Day immediately preceding the Warrant Settlement
Date that such Holder has elected, in accordance with the procedures specified
in Section 5.03(f)(i) of the Warrant Agreement to effect a Cash Settlement, and
(2) payment by such Holder by deposit in the Collateral Account prior to or at
5:00 p.m. (New York City time) (i) in the case of Equity Units, which may only
be settled in integral multiples of 40 Warrants, on the fourth Business Day
immediately preceding the Warrant Settlement Date, or (ii) in the case of
Treasury Equity Units, on the Business Day immediately preceding the Warrant
Settlement Date, of the Purchase Price in lawful money of the United States by
wire transfer of immediately available funds payable to or upon the order of the
Securities Intermediary, then the Collateral Agent shall:
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(1) instruct the Securities Intermediary promptly to invest any such
Cash in Permitted Investments;
(2) release from the Pledge the Equity Unit holder's or the Treasury
Equity Unit holder's related Pledged Notes or Pledged Treasury Securities,
as applicable, as to which such Holder has elected to effect a Cash
Settlement pursuant to this SECTION 5.5(A); and
(3) instruct the Securities Intermediary to Transfer all such
Pledged Notes or the Pledged Treasury Securities, as the case may be, to
the Warrant Agent for the benefit of such Holder, in each case free and
clear of the Pledge created hereby, for distribution to such Holder.
The Company shall instruct the Securities Intermediary as to the type of
Permitted Investments in which any such Cash shall be invested; provided,
however, that if the Company fails to deliver such instructions by 10:30 a.m.
(New York City time), the Securities Intermediary shall invest such Cash in the
Permitted Investments described in clause 6 of the definition of Permitted
Investments.
Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Warrant Settlement Date, the Collateral Agent shall (A)
instruct the Securities Intermediary to pay the portion of such proceeds, in an
aggregate amount equal to the Purchase Price, to the Company on the Warrant
Settlement Date, and (B) instruct the Securities Intermediary to release any
amounts in excess of the Purchase Price earned from such Permitted Investments
to the Warrant Agent for distribution to such Holder.
(b) If a Holder of Equity Units (if neither a Tax Event Redemption nor a
Successful Initial Remarketing shall have occurred) notifies the Warrant Agent
as provided in paragraph 5.03(a)(i) of the Warrant Agreement of its intention to
pay the Purchase Price in cash, but fails to make such payment as required by
paragraph 5.03(a)(ii) of the Warrant Agreement, such Holder shall be deemed to
have consented to the disposition of such Holder's Pledged Notes in accordance
with the remarketing procedures as described in paragraph 5.03(a)(iii) of the
Warrant Agreement.
(c) If a Holder of a Treasury Equity Unit notifies the Warrant Agent as
provided in paragraph 5.03(f)(i) of the Warrant Agreement of its intention to
pay the Purchase Price in cash, but fails to make such payment as required by
paragraph 5.03(f)(ii) of the Warrant Agreement, such Holder shall be deemed to
have elected to pay the Purchase Price in accordance with paragraph 5.03(f)(iii)
of the Warrant Agreement. In addition, in the event of a Failed Final
Remarketing as described in Section 5.02 of the Warrant Agreement, the
Collateral Agent, for the benefit of the Company, will also exercise its rights
as a secured party with respect to such Pledged Notes at the direction of the
Company to retain or dispose of the Collateral in accordance with applicable
law.
(d) In the event of a Failed Final Remarketing as described in Section
5.02 of the Warrant Agreement, the Collateral Agent, for the benefit of the
Company, will also
15
exercise its rights as a secured party with respect to such Pledged Notes at the
direction of the Company to retain or dispose of the Collateral in accordance
with applicable law.
(e) As soon as practicable after 11:00 a.m. (New York City time) (i) in
the case of Equity Units, on the fourth Business Day immediately preceding the
Warrant Settlement Date, and (ii) in the case of Treasury Equity Units, on the
Business Day immediately preceding the Warrant Settlement Date, the Securities
Intermediary shall deliver to the Warrant Agent a notice, substantially in the
form of EXHIBIT E hereto, stating the amount of cash that it has received with
respect to the Cash Settlement of Equity Units or the amount of cash that it has
received with respect to the Cash Settlement of Treasury Equity Units, as the
case may be.
Section 5.6 EARLY SETTLEMENT.
Upon receipt by the Collateral Agent of a notice from the Warrant Agent
that a Holder of Securities has elected to effect Early Settlement of its
obligations under the Warrants forming a part of such Securities in accordance
with the terms of the Warrants and Section 5.08 of the Warrant Agreement (which
notice shall set forth the number of such Warrants as to which such Holder has
elected to effect Early Settlement), and that the Warrant Agent has received
from such Holder, and paid to the Company as confirmed in writing by the
Company, the related Early Settlement Amounts pursuant to the terms of the
Warrants and the Warrant Agreement and that all conditions to such Early
Settlement have been satisfied, then the Collateral Agent shall release from the
Pledge, (1) Pledged Notes or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definitions at such term) of the Treasury
Portfolio or Pledged Notes in the case of a Holder of Equity Units or (2)
Pledged Treasury Securities, in the case of a Holder of Treasury Equity Units,
with a Value equal to the product of (x) the Stated Amount times (y) the number
of Warrants as to which such Holder has elected to effect Early Settlement, and
shall instruct the Securities Intermediary to Transfer all such Pledged Notes or
the appropriate Applicable Ownership Interest (as specified in clause (A) of the
definitions at such term) of the Treasury Portfolio or Pledged Notes or Pledged
Treasury Securities, as the case may be, to the Warrant Agent for the benefit of
such Holder, in each case free and clear of the Pledge created hereby, for
distribution to such Holder. A Treasury Equity Unit holder may settle early only
in integral multiples of 40 Warrants.
Section 5.7 APPLICATION OF PROCEEDS IN SETTLEMENT OF WARRANTS.
(a) If a Holder of Equity Units (if neither a Tax Event Redemption nor a
Successful Initial Remarketing has occurred) has not elected to make an
effective Cash Settlement by notifying the Warrant Agent in the manner provided
for in Section 5.03(a)(i) in the Warrant Agreement, such Holder shall be deemed
to have elected to pay for the shares of Common Stock to be issued under such
Warrants from the proceeds of the remarketing of the related Pledged Notes. Upon
notice of such event from the Warrant Agent, the Collateral Agent shall, by
11:00 a.m., New York City time, on the
16
fourth Business Day immediately preceding the Warrant Settlement Date, without
any instruction from such Holder of Equity Units, instruct the Securities
Intermediary to Transfer the related Pledged Notes to the Remarketing Agent for
remarketing. Upon receiving such Pledged Notes, the Remarketing Agent, pursuant
to the terms of the Remarketing Agreement and the Supplemental Remarketing
Agreement, will use reasonable efforts to remarket the Pledged Notes on the
Final Remarketing Date at a price of approximately 100.25% (but not less than
100%) of the aggregate Value of such Pledged Notes. After deducting as the
Remarketing Fee an amount not exceeding 25 basis points (.25%) of the aggregate
Value of the remarketed Pledged Notes from any amount of such proceeds in excess
of the aggregate Value of the remarketed Pledged Notes, the Remarketing Agent
will remit the entire amount of the proceeds of such remarketing to the
Collateral Agent. On the Warrant Settlement Date, the Warrant Agent shall give
written direction to the Collateral Agent specifying the instruction the
Collateral Agent shall give to the Securities Intermediary in order to apply a
portion of the Proceeds from such remarketing equal to the aggregate principal
amount of such Pledged Notes to satisfy in full such Holder's obligations to pay
the Purchase Price to purchase the shares of Common Stock under the related
Warrants and the balance of the Proceeds from the remarketing, if any, that
shall be transferred to the Warrant Agent for the benefit of such Holder for
distribution to such Holder.
If the Remarketing Agent advises the Collateral Agent in writing that it
cannot remarket the related Pledged Notes of such Holders of Equity Units at a
price not less than 100% of the aggregate Value of such Pledged Notes or if the
remarketing shall not have occurred because a condition precedent to the
remarketing shall not have been fulfilled, thus resulting in a Failed Final
Remarketing, the Collateral Agent, for the benefit of the Company shall, at the
written direction of the Company, retain or dispose of the Pledged Notes in
accordance with applicable law and satisfy in full, from such retention or
disposition, such Holder's obligations to pay the Purchase Price for the shares
of Common Stock.
(b) If a Holder of a Treasury Equity Unit has not elected to make an
effective Cash Settlement by notifying the Warrant Agent in the manner provided
for in Section 5.03(f)(i) of the Warrant Agreement, or in all cases where the
Treasury Portfolio has become a component of Equity Units such Holder shall be
deemed to have elected to pay for the shares of Common Stock to be issued under
such Warrants from the Proceeds of the related Pledged Treasury Securities or
the Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, as the case may be. Promptly, after
11:00 a.m. (New York City time) on the Business Day immediately prior to the
Warrant Settlement Date, the Securities Intermediary shall invest the Cash
Proceeds of the maturing Pledged Treasury Securities or the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, in Permitted Investments in clause 6 of
the definition of Permitted Investments, unless prior to 10:30 a.m. (New York
City time), the Company shall otherwise instruct the Securities Intermediary as
to the type of Permitted Investments in which any such Cash Proceeds shall be
invested. Without receiving any
17
instruction from any such Holder, the Collateral Agent shall apply the Proceeds
of the related Pledged Treasury Securities or such Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, to the settlement of such Warrants on the Warrant
Settlement Date. In the event the sum of the Proceeds from the related Pledged
Treasury Securities or such Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio as the case
may be, and the investment earnings from the investment in Permitted Investments
exceeds the aggregate Purchase Price of the Warrants being settled thereby, the
Collateral Agent shall instruct the Securities Intermediary to distribute such
excess, when received, to the Warrant Agent for the benefit of such Holder for
distribution to such Holder.
(c) Pursuant to the Remarketing Agreement and subject to the terms of the
Supplemental Remarketing Agreement, on or prior to the fifth Business Day
immediately preceding May 17, 2004 or the Final Remarketing Date, as applicable,
or in the event of any Additional Remarketing, timely notice of which shall have
been provided to the Custodial Agent by the Remarketing Agent, pursuant to the
Remarketing Agreement or any Supplemental Remarketing Agreement, on or prior to
the second Business Day following the notification by the Remarketing Agent of
its intention to conduct an Additional Remarketing, but no earlier than the
Payment Date immediately preceding any such date, Holders of Separate Securities
may elect to have their Separate Securities remarketed by delivering their
Separate Securities, together with a notice of such election, substantially in
the form of EXHIBIT F hereto, to the Custodial Agent. The Custodial Agent shall
hold such Separate Securities in an account separate from the Collateral
Account. A Holder of Separate Securities electing to have its Separate
Securities remarketed will also have the right to withdraw such election by
written notice to the Custodial Agent, substantially in the form of EXHIBIT G
hereto, on or prior to the second Business Day immediately preceding the first
Initial Remarketing on the third Business Day prior to May 17, 2004 or the Final
Remarketing Date, as applicable, upon which notice the Custodial Agent shall
return such Separate Securities to such Holder. On the Business Day immediately
preceding any Initial Remarketing Date or the Final Remarketing Date, as
applicable, the Custodial Agent shall notify the Remarketing Agent and the
Company of the aggregate principal amount of the Separate Securities to be
remarketed and will deliver to the Remarketing Agent for remarketing all
Separate Securities delivered to the Custodial Agent pursuant to this Section
5.6(c) and not withdrawn pursuant to the terms hereof prior to such date. After
deducting the Remarketing Fee to the extent permitted under the terms of the
Remarketing Agreement, the Remarketing Agent will remit to the Custodial Agent
the remaining portion of the proceeds for the benefit of such Holders. In the
event of any Failed Initial Remarketing or a Failed Final Remarketing, as
applicable, the Remarketing Agent will promptly return such Separate Securities
to the Custodial Agent for redelivery to such Holders.
(d) The Warrant Agent, on behalf of itself and the Holders, acknowledges
and irrevocably agrees that any remarketing of the Notes on any Initial
Remarketing Date or the Final Remarketing Date shall not constitute a
foreclosure of the Pledge of or other
18
exercise of default remedies with respect to the Notes within the meaning of the
Code, but rather shall constitute a voluntary sale of the Notes by and on behalf
of the Holders and the Warrant Agent.
Section 5.8 TAX EVENT REDEMPTION.
If the Securities Intermediary receives notice that a Tax Event Redemption
has occurred prior to the Warrant Settlement Date, the Securities Intermediary
in accordance with Section 7.3 hereof shall apply the Tax Event Redemption
Amount to purchase the Treasury Portfolio from the Quotation Agent and the
Securities Intermediary shall credit the Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio to the Collateral Account and shall transfer the Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio to the Warrant Agent for distribution to the Holders of the
Equity Units. Upon credit to the Collateral Account of the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio having a Value equal to the aggregate principal amount of the
Pledged Notes, the Securities Intermediary shall release the Pledged Notes from
the Collateral Account and shall promptly transfer such Notes to the Company. If
a Tax Event Redemption has occurred following the Warrant Settlement Date, the
Securities Intermediary shall distribute the Tax Event Redemption Amount to the
Warrant Agent for distribution to the Holders of the Equity Units.
ARTICLE 6
VOTING RIGHTS - PLEDGED NOTES
The Warrant 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 Warrant Agreement; provided, that the Warrant
Agent shall not exercise or shall not refrain from exercising such right, as the
case may be, if and to the extent that the Warrant Agent shall have received an
Officers' Certificate stating to the effect that, in the judgment of the
Company, such action or inaction, as the case may be, would impair or otherwise
have a material adverse effect on the value of all or any of the Pledged Notes
and setting forth what action or inaction the Warrant Agent should engage in or
refrain from engaging in, as the case may be; and provided, further, that the
Warrant Agent, upon receipt of such Officer's Certificate, shall give the
Company and the Collateral Agent at least five Business 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 the Pledged Notes are entitled to vote, or
solicitation of consents, waivers or proxies of holders of the Pledged Notes,
the Collateral Agent shall use reasonable efforts to send promptly to the
Warrant Agent such notice or communication, and as soon as reasonably
practicable after receipt of a written request therefor from the Warrant Agent
execute and deliver to the Warrant Agent such
19
proxies and other instruments in respect of such Pledged Notes (in form and
substance satisfactory to the Collateral Agent) as are prepared by the Warrant
Agent in respect of such Pledged Notes.
ARTICLE 7
RIGHTS AND REMEDIES
Section 7.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT.
(a) In addition to the rights and remedies specified in SECTION 5.6 hereof
or otherwise available at law or in equity, after an event of default (as
specified in Section 7.1(b) below) hereunder, the Collateral Agent shall have
all of the rights and remedies with respect to the Collateral of a secured party
under the UCC (whether or not the UCC 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, (1) retention of the Pledged
Notes, Pledged Treasury Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) in full
satisfaction of the Holders' obligations under the Warrants and the Warrant
Agreement or (2) sale of the Pledged Notes, Pledged Treasury Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) 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 ARTICLE 3 hereof, in satisfaction of the
Obligations of the Holder of the Equity Units (if a Tax Event Redemption has
occurred) of which such appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio or the
Holder of the Treasury Equity Units of which such Pledged Treasury Securities,
as applicable, is a part under the related Warrants, 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 the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as applicable, any and
all of the rights and remedies available to a secured party under the UCC 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
the Pledged Notes, (ii)
20
the principal amount of the Pledged Treasury Securities and (iii) the principal
amount of the 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 ARTICLE 3 hereof, and as otherwise granted herein.
(d) The Warrant Agent and each Holder of Securities agrees that, from time
to time, upon the written request of the Company or the Warrant Agent, such
Holder shall execute and deliver such further documents and do such other acts
and things as the Company may reasonably request in order to maintain the
Pledge, and the perfection and priority thereof, and to confirm the rights of
the Company and the Collateral Agent hereunder. The Warrant Agent shall have no
liability to any Holder for executing any documents or taking any such acts
requested by the Company hereunder, except for liability for its own gross
negligent acts, its own gross negligent failure to act or its own willful
misconduct.
Section 7.2 TAX EVENT REDEMPTION.
Upon the occurrence of a Tax Event Redemption prior to the Warrant
Settlement Date, the Redemption Price payable on the Tax Event Redemption Date
with respect to the Tax Event Redemption Amount shall be credited to the
Collateral Account by the Indenture Trustee (or paying agent under the
Indenture) on or prior to 11:00 a.m., New York City time, on such Tax Event
Redemption Date, by wire transfer of immediately available funds. The Collateral
Agent is hereby authorized to present the Pledged Notes for payment as may be
required by their terms. Upon receipt of such funds, the Pledged Notes shall be
released from the Collateral Account. In the event such funds are credited to
the Collateral Account, the Collateral Agent, at the written direction of the
Company, shall instruct the Securities Intermediary to (a) apply an amount equal
to the Redemption Amount of such Redemption Price to purchase the Treasury
Portfolio from the Quotation Agent for credit to the Collateral Account and (b)
promptly remit the remaining portion of such Redemption Price, if any, to the
Warrant Agent for payment to the Holders of Equity Units.
Section 7.3 INITIAL AND ADDITIONAL REMARKETING; TREASURY PORTFOLIO CASH
PAYMENT TO REMARKETING AGENT OR ITS DESIGNATED ENTITY.
(a) Unless a Tax Event Redemption shall have have occurred, the Collateral
Agent shall, by 11:00 a.m., New York City time, on the fifth Business Day
immediately preceding May 17, 2004 or, in the case of any Additional Remarketing
subsequent to that date (written notice of which the Collateral Agent shall have
received from the Remarketing Agent), by 11:00 a.m., New York City time on the
second Business Day immediately preceding the date of such Additional
Remarketing, without any instruction from any Holder of Equity Units, present
the related Pledged Notes to the Remarketing Agent for remarketing other than
those Pledged Notes in respect of which a Holder shall have delivered a notice
in the form set forth as EXHIBIT H hereto together with the Treasury Portfolio
plus fees and expenses that the Remarketing Agent or its designated
21
entity shall charge from time to time to accept delivery of the Treasury
Portfolio by 11:00 a.m., New York City time, on the fifth Business Day
immediately preceding the Initial Remarketing Date, or by 11:00 a.m., New York
City time, on the second Business Day preceding the date of the Additional
Remarketing. Upon receiving such Pledged Notes, the Remarketing Agent, pursuant
to the terms of the Remarketing Agreement and the Supplemental Remarketing
Agreement, will use its reasonable efforts to remarket such Pledged Notes, on
the Initial Remarketing Date at a price of approximately 100.25% (but not less
than 100%) of the principal value of the Treasury Portfolio. After deducting as
the Remarketing Fee an amount not exceeding 25 basis points (.25%) of the
principal value of the Treasury Portfolio from any amount of such Proceeds in
excess of the Treasury Portfolio, the Remarketing Agent will remit the entire
amount of the Proceeds of such remarketing to the Collateral Agent on or prior
to 12:00 p.m., New York City time, on such remarketing date, by wire transfer in
immediately available funds, per the instructions and to the account specified
in SECTION 4.11 hereof, in exchange for the Pledged Notes. In the event a Holder
elects to deliver Treasury Securities having a principal value corresponding to
the value of Pledged Notes underlying the number of Equity Units held by such
Holder, such delivery shall be made to the Remarketing Agent on or prior to
11:00 a.m., New York City time, on the fifth Business Day immediately preceding
the Initial Remarketing Date, or by 11:00 a.m., New York City time, on the
second Business Day preceding the date of the Additional Remarketing, at such a
place and at such account as may be designated therefor by the Remarketing
Agent. The Remarketing Agent will deliver to the Collateral Agent any such
Treasury Securities delivered to it, no later than ____ p.m. on the ___ Business
Day preceding such remarketing date. In the event the Collateral Agent receives
from the Remarketing Agent such proceeds from an Initial Remarketing, the
Collateral Agent will, at the written direction of the Company, apply the
Treasury Portfolio and promptly remit any remaining portion of such proceeds to
the Warrant Agent for payment to the Holders of the Equity Units. The Collateral
Agent shall transfer the Treasury Portfolio to the Collateral Account to secure
the obligation of all Holders of Equity Units to purchase Common Stock of the
Company under the Warrants constituting a part of such Equity Units, in
substitution for the Pledged Notes. Thereafter the Collateral Agent shall have
such security interests, rights and obligations with respect to the Treasury
Portfolio as it had in respect of the Pledged Notes, as provided herein, and any
reference herein to the Pledged Notes, shall be deemed to be reference to such
Treasury Portfolio, and any reference herein to interest payments on the Pledged
Notes, shall be deemed to be a reference to interest payments on such Treasury
Portfolio.
(b) In connection with a Collateral substitution of the Pledged Notes
pursuant to Section 7.3(a) hereof, subject to receipt by the Collateral Agent of
the Applicable Ownership Interest of the Treasury Portfolio required by Section
5.02 of the Warrant Agreement, the Collateral Agent shall release, upon written
instruction from the Warrant Agent substantially in the form of EXHIBIT J
hereto, the Pledged Notes underlying the number of Equity Units indicated in
such instruction from the Pledge and transfer, without recourse, such released
Pledged Notes, free and clear of any lien, pledge or security interest created
hereby, to the Warrant Agent for delivery by the Warrant Agent
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pursuant to the provisions of the Warrant Agreement. The Applicable Ownership
Interest of the Treasury Portfolio received by the Collateral Agent in
connection with the Collateral substitution shall be subject to the Pledge.
Section 7.4 SUBSTITUTIONS.
Whenever a Holder has the right to substitute Treasury Securities, Notes
or security entitlements for any of them or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, for financial assets
held in the Collateral Account, such substitution shall not constitute a
novation of the security interest created hereby.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 8.1 REPRESENTATIONS AND WARRANTIES.
Each Holder from time to time, acting through the Warrant Agent as
attorney-in-fact (it being understood that the Warrant Agent shall not be liable
for any representation or warranty made by or on behalf of a Holder), hereby
represents and warrants to the Collateral Agent and the Company (with respect to
such Holder's interest in the Collateral), which representations and warranties
shall be deemed repeated on each day a Holder Transfers Collateral that:
(1) such Holder has the power to grant a security interest in and
lien on the Collateral;
(2) 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 Securities Intermediary
for credit to the Collateral Account, free and clear of any security
interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under
ARTICLE 2 hereof;
(3) upon the Transfer of the Collateral to the Securities
Intermediary for credit 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 securities intermediary or other entity not within the
control of the Holder involved in the Transfer of the Collateral,
including the Company, or Collateral Agent and the Securities Intermediary
on the Company's behalf, 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 ARTICLE
4 hereof); and
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(4) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security
interest, lien or other encumbrance on the Collateral other than the
security interest and lien granted under ARTICLE 2 hereof or violate any
provision of any existing law or regulation applicable to it or of any
mortgage, charge, pledge, indenture, contract or undertaking to which it
is a party or which is binding on it or any of its assets.
Section 8.2 COVENANTS.
The Holders from time to time, acting through the Warrant Agent as their
attorney-in-fact (it being understood that the Warrant 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:
(1) neither the Warrant 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
(2) neither the Warrant Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of
it except for the beneficial interest therein, subject to the Pledge
hereunder, transferred in connection with the Transfer of the Securities.
ARTICLE 9
THE COLLATERAL AGENT, THE SECURITIES INTERMEDIARY
AND THE CUSTODIAL AGENT
It is hereby agreed as follows:
Section 9.1 APPOINTMENT, POWERS AND IMMUNITIES.
The Collateral Agent, the Securities Intermediary and the Custodial Agent
shall act as agents for the Company hereunder with such powers as are
specifically vested in the Collateral Agent, the Securities Intermediary and the
Custodial Agent by the terms of this Agreement, together with such other powers
as are reasonably incidental thereto, and shall have no duties, fiduciary or
otherwise, to any other Person. Each of the Collateral Agent, the Securities
Intermediary and the Custodial Agent and the Securities Intermediary shall:
(1) 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;
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(2) 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 Warrant
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 Warrant 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
Securities Intermediary or the Custodial Agent, as the case may be) to
perform any of its obligations hereunder or thereunder, or for the
attachment, perfection, priority or, except as expressly required hereby,
maintenance of any lien or security interest created or intended to be
created hereunder;
(3) not be required to initiate or conduct any litigation or
collection proceedings hereunder (except in the case of the Collateral
Agent pursuant to directions furnished under SECTION 9.2 hereof, subject
to SECTION 9.6 hereof);
(4) not be responsible for any action taken, suffered 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 or willful misconduct; and
(5) 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 and the Securities Intermediary shall take all reasonable action in
connection with the safekeeping and preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent, the
Securities Intermediary or the Custodial 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, the Securities
Intermediary or the Custodial Agent be liable for any amount in excess of the
Value of the Collateral. Notwithstanding the foregoing, each of the Collateral
Agent, the Securities Intermediary, the Custodial Agent and the Warrant Agent in
its individual capacity hereby waives any right of setoff, bankers' lien, liens
or perfection rights as securities intermediary or any counterclaim with respect
to any of the Collateral.
Section 9.2 INSTRUCTIONS OF THE COMPANY.
The Company shall have the right, by one or more written instruments
executed and delivered to the Collateral Agent, the Securities Intermediary or
the Custodial Agent, 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
25
any power conferred on the Collateral Agent, the Securities Intermediary or the
Custodial Agent, 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 Securities Intermediary and the
Custodial Agent shall be adequately indemnified as provided herein and shall not
be subject to personal liability. Nothing contained in this SECTION 9.2 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 9.3 RELIANCE BY COLLATERAL AGENT, SECURITIES INTERMEDIARY AND
CUSTODIAL AGENT.
Each of the Collateral Agent, the Securities Intermediary and the
Custodial Agent shall be entitled to rely upon any certification, order,
judgment, opinion, notice or other written communication (including, without
limitation, any thereof by telecopy) believed by it to be genuine 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
consult with and rely upon advice, opinions and statements of legal counsel and
other experts selected by the Collateral Agent, the Securities Intermediary, or
the Custodial Agent, as the case may be. Each of the Collateral Agent and the
Securities Intermediary may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon. As to any matters not expressly provided
for by this Agreement, the Collateral Agent, the Securities Intermediary and the
Custodial Agent shall in all cases be entitled to receive and shall 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 9.4 RIGHTS IN OTHER CAPACITIES.
The Collateral Agent, the Securities Intermediary and the Custodial Agent
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 Warrant Agent,
any other Person interested herein and any Holder of Securities (and any of
their respective subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, the Securities Intermediary or the Custodial Agent, as the
case may be, and the Collateral Agent, the Securities Intermediary and the
Custodial Agent and their affiliates may accept fees and other consideration
from the Warrant Agent and any Holder of Securities without having to account
for the same to the Company; provided that each of the Securities Intermediary,
the Collateral Agent and the Custodial 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
26
security interest, lien or other encumbrance of any kind in or upon the
Collateral other than the lien created by the Pledge.
Section 9.5 NON-RELIANCE ON COLLATERAL AGENT, SECURITIES INTERMEDIARY AND
CUSTODIAL AGENT.
Neither the Securities Intermediary, the Collateral Agent nor the
Custodial Agent shall be required to keep itself informed as to the performance
or observance by the Warrant Agent or any Holder of Securities of this
Agreement, the Warrant Agreement, the Securities or any other document referred
to or provided for herein or therein or in connection herewith or therewith or
to inspect the properties or books of the Warrant Agent or any Holder of
Securities. None of the Collateral Agent, the Securities Intermediary or the
Custodial Agent shall have any duty or responsibility to provide the Company
with any credit or other information concerning the affairs, financial condition
or business of the Warrant Agent or any Holder of Securities (or any of their
respective affiliates) that may come into the possession of the Collateral
Agent, the Securities Intermediary or and the Custodial Agent or any of their
respective affiliates.
Section 9.6 COMPENSATION AND INDEMNITY.
The Company agrees to:
(1) pay the Collateral Agent, the Securities Intermediary and the
Custodial Agent from time to time such compensation as shall be agreed in
writing between the Company and the Collateral Agent, the Securities
Intermediary or the Custodial Agent, as the case may be, for all services
rendered by them hereunder;
(2) indemnify and hold harmless the Collateral Agent, the Securities
Intermediary and the Custodial Agent and each of their respective
directors, officers, agents and employees (collectively, the
"INDEMNITEES"), harmless from and against any and all claims, liabilities,
losses, damages, fines, penalties and expenses (including reasonable fees
and expenses of counsel) (collectively, "LOSSES" and individually, a
"LOSS") that may be imposed on, incurred by, or asserted against, the
Indemnitees or any of them for following any instructions or other
directions upon which either the Collateral Agent, the Securities
Intermediary or the Custodial Agent is entitled to rely pursuant to the
terms of this Agreement; and
(3) in addition to and not in limitation of paragraph (2)
immediately above, indemnify and hold the Indemnitees and each of them
harmless from and against any and all Losses that may be imposed on,
incurred by or asserted against, the Indemnitees or any of them in
connection with or arising out of the Collateral Agent's, the Securities
Intermediary's or the Custodial Agent's acceptance or exercise or
performance of its powers and duties under this Agreement, including the
costs and expenses of defending itself against any claim
27
or liability in connection with the exercise or performance of any of its
powers or duties hereunder provided the Collateral Agent, the Securities
Intermediary or the Custodial Agent have not acted with gross negligence
or engaged in willful misconduct with respect to the specific Loss against
which indemnification is sought.
Without prejudice to its rights hereunder, when any of the Collateral
Agent or Securities Intermediary incurs expenses or renders services after a
Termination Event occurs, the expenses and compensation for the services are
intended to constitute expenses of administration under the Bankruptcy Code or
any applicable state bankruptcy, insolvency or other similar law.
Section 9.7 FAILURE TO ACT.
In the event of any ambiguity in the provisions of this Agreement or any
dispute between or conflicting or adverse claims by or among the parties hereto
or any other Person with respect to any funds or property deposited hereunder,
then at its sole option, each of the Collateral Agent, the Securities
Intermediary and the Custodial Agent shall be entitled, after prompt notice to
the Company and the Warrant Agent, to refuse to comply with any and all such
provisions or claims, demands or instructions with respect to such property or
funds so long as such ambiguity, dispute or conflict shall continue, and the
Collateral Agent, the Securities Intermediary and the Custodial 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 ambiguous provision or conflicting or adverse
claims, demands or instructions. The Collateral Agent, the Securities
Intermediary and the Custodial Agent shall be entitled to refuse to act until
either:
(1) such ambiguous provisions or conflicting or adverse claims,
demands or instructions shall have been finally determined by a court of
competent jurisdiction or settled by agreement between the conflicting
parties as evidenced in a writing satisfactory to the Collateral Agent,
the Securities Intermediary or the Custodial Agent, as the case may be; or
(2) the Collateral Agent, the Securities Intermediary or the
Custodial Agent, as the case may be, shall have received security or an
indemnity satisfactory to it sufficient to save it harmless from and
against any and all loss, liability or reasonable out-of-pocket expense
which it may incur by reason of its acting.
The Collateral Agent, the Securities Intermediary and the Custodial Agent may in
addition elect to commence an interpleader action or seek other judicial relief
or orders as the Collateral Agent, the Securities Intermediary or the Custodial
Agent may deem necessary. Notwithstanding anything contained herein to the
contrary, neither the Collateral Agent, the Securities Intermediary nor the
Custodial Agent shall be required to take any action that is in its opinion
contrary to law or to the terms of this Agreement, or
28
which would in its opinion subject it or any of its officers, employees or
directors to liability.
Section 9.8 RESIGNATION OF COLLATERAL AGENT, SECURITIES INTERMEDIARY AND
CUSTODIAL AGENT.
(a) Subject to the appointment and acceptance of a successor Collateral
Agent, Securities Intermediary or Custodial Agent as provided below:
(1) the Collateral Agent, the Securities Intermediary and the
Custodial Agent may resign at any time by giving notice thereof to the
Company and the Warrant Agent as attorney-in-fact for the Holders of
Securities;
(2) the Collateral Agent, the Securities Intermediary and the
Custodial Agent may be removed at any time by the Company; and
(3) if the Collateral Agent, Securities Intermediary or the
Custodial Agent fails to perform any of its material obligations hereunder
in any material respect for a period of not less than 20 days after
receiving written notice of such failure by the Warrant Agent and such
failure shall be continuing, the Collateral Agent, the Securities
Intermediary or the Custodial Agent may be removed by the Warrant Agent.
The Warrant Agent shall promptly notify the Company of any removal of the
Collateral Agent, Securities Intermediary or Custodial Agent pursuant to clause
(3) of the immediately preceding sentence. Upon any such resignation or removal,
the Company shall have the right to appoint a successor Collateral Agent,
Securities Intermediary or the Custodial Agent, as the case may be. If no
successor Collateral Agent, Securities Intermediary or Custodial Agent, as the
case may be, shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Collateral Agent's, Securities
Intermediary's or Custodial Agent's giving of notice of resignation or the
Company or the Warrant Agent giving notice of such removal, then the retiring
Collateral Agent, Securities Intermediary or Custodial Agent, as the case may
be, may petition any court of competent jurisdiction for the appointment of a
successor Collateral Agent, Securities Intermediary or the Custodial Agent, as
the case may be. Each of the Collateral Agent, the Securities Intermediary and
Custodial Agent shall be a bank or a national banking association which has an
office (or an agency office) in New York City with a combined capital and
surplus of at least $50,000,000 and shall not be the Warrant Agent or any of its
affiliates. Upon the acceptance of any appointment as Collateral Agent,
Securities Intermediary or Custodial Agent, as the case may be, hereunder by a
successor Collateral Agent, Securities Intermediary or Custodial Agent, as the
case may be, such successor shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Collateral Agent,
Securities Intermediary, or Custodial Agent, as the case may be, and the
retiring Collateral Agent, Securities Intermediary or Custodial Agent, as the
case may be, shall take all appropriate action to transfer any money and
property held by it hereunder (including the Collateral) to such
29
successor. The retiring Collateral Agent, Securities Intermediary or Custodial
Agent shall, upon such succession, be discharged from its duties and obligations
as Collateral Agent, Securities Intermediary or Custodial Agent hereunder. After
any retiring Collateral Agent's, Securities Intermediary's or Custodial Agent's
resignation hereunder as Collateral Agent, Securities Intermediary or Custodial
Agent, the provisions of ARTICLE 9 and SECTION 11.7 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, the Securities Intermediary or
the Custodial Agent.
Section 9.9 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 9.9 shall be subject to prior consent of the Company,
which consent shall not be unreasonably withheld.
Section 9.10 SURVIVAL.
The provisions of ARTICLE 9 and SECTION 11.7 hereof shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent, the Securities Intermediary or the Custodial Agent.
Section 9.11 EXCULPATION.
Anything contained in this Agreement to the contrary notwithstanding, in
no event shall the Collateral Agent, the Securities Intermediary or the
Custodial Agent or their officers, directors, employees or agents be liable
under this Agreement for indirect, special, punitive, or consequential loss or
damage of any kind whatsoever, including, but not limited to, lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent, the Securities Intermediary or the Custodial Agent, or any of them.
None of the Collateral Agent, Securities Intermediary or Custodial Agent
shall be responsible or liable for any failure or delay in the performance of
their respective 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; wars;
civil or military disturbances; sabotage; epidemics; riots; interruptions, loss
or malfunctions of utilities, computer (hardware or software) or communications
service; accidents; labor disputes; acts of civil or military authority or
governmental actions; its being understood that the Collateral Agent, Securities
Intermediary or Custodial Agent, as the case may be, shall use reasonable
efforts which are consistent with accepted practices in the banking industry to
resume performance as soon as practicable under the circumstances.
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ARTICLE 10
AMENDMENT
Section 10.1 AMENDMENT WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, the Collateral Agent, the
Securities Intermediary, the Custodial Agent and the Warrant Agent, at any time
and from time to time, may amend this Agreement, in form satisfactory to the
Company, the Collateral Agent, the Securities Intermediary, the Custodial Agent
and the Warrant Agent, to:
(1) evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company;
(2) evidence and provide for the acceptance of appointment hereunder
by a successor Collateral Agent, Securities Intermediary, Custodial Agent
or Warrant Agent;
(3) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the
Company, provided such covenants or such surrender do not adversely affect
the validity, perfection or priority of the Pledge created hereunder; or
(4) cure any ambiguity (or formal defect), correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, or make any other provisions with respect to such matters or
questions arising under this Agreement, provided such action shall not
adversely affect the interests of the Holders.
Section 10.2 AMENDMENT WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority of the
Warrants at the time outstanding, by Act of such Holders delivered to the
Company, the Warrant Agent, the Securities Intermediary, the Collateral Agent
and the Custodial Agent, the Company, the Warrant Agent, the Collateral Agent,
the Securities Intermediary and the Custodial 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 amendment shall, without the unanimous consent of the Holders 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 Equity Units to substitute the
Treasury Securities for the Pledged Notes, or the rights of Holders of
Treasury Equity Units to substitute Notes 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
31
(2) otherwise effect any action that would require the consent of
the Holder of each Outstanding Security affected thereby pursuant to the
Warrant Agreement if such action were effected by an agreement
supplemental thereto; or
(3) reduce the percentage of Warrants the consent of whose Holders
is required for any such amendment;
provided that if any amendment referred to above would adversely affect only the
Equity Units or only the Treasury Equity Units, then only the affected class of
Holders as of the record date for the Holders entitled to vote thereon will be
entitled to vote on such amendment, and such amendment shall not be effective
except with the consent of Holders of not less than a majority of such class;
provided, further, that the unanimous consent of the Holders of each outstanding
Warrant of such class affected thereby shall be required to approve any
amendment specified in clauses (1) through (3) above.
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 10.3 EXECUTION OF AMENDMENTS.
In executing any amendment permitted by this Article, the Collateral
Agent, the Securities Intermediary, the Custodial Agent and the Warrant Agent
shall be entitled to receive and (subject to Section 7.01 of the Warrant
Agreement with respect to the Warrant 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 10.4 EFFECT OF AMENDMENTS.
Upon the execution of any amendment under this Article, 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 Warrant Agreement shall be bound thereby.
Section 10.5 REFERENCE TO AMENDMENTS.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any amendment pursuant to this Article may, and
shall if required by the Collateral Agent or the Warrant Agent, bear a notation
in form approved by the Warrant 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 Warrant Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of
32
the Holders and delivered by the Warrant Agent in accordance with the Warrant
Agreement in exchange for Outstanding Certificates.
ARTICLE 11
MISCELLANEOUS
Section 11.1 NO WAIVER.
No failure on the part of the Collateral Agent, the Securities
Intermediary, the Custodial Agent or any of their respective 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, the Securities Intermediary,
the Custodial Agent or any of their respective 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 11.2 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK. The Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent, the Warrant Agent and the Holders from time
to time of the Securities, acting through the Warrant Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Company, the Collateral Agent, the Securities Intermediary, the
Custodial Agent, the Warrant Agent and the Holders from time to time of the
Securities, acting through the Warrant 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. The Company,
the Collateral Agent, the Securities Intermediary, the Custodial Agent, the
Warrant Agent and the Holders from time to time of the Securities, acting
through the Warrant Agent as their attorney-in-fact, also waive all right to
trial by jury in any action, proceeding or counterclaim arising out of this
Agreement or the transactions contemplated hereby.
Section 11.3 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
33
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
Section 11.4 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
Securities Intermediary, the Custodial Agent and the Warrant 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
Warrant Agent.
Section 11.5 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 11.6 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 11.7 EXPENSES, ETC.
The Company agrees to reimburse the Collateral Agent, the Securities
Intermediary and the Custodial Agent for:
(1) all reasonable costs and expenses of the Collateral Agent, the
Securities Intermediary and the Custodial Agent (including, without
limitation, the reasonable fees and expenses of counsel to the Collateral
Agent, the Securities Intermediary and the Custodial Agent), in connection
with the negotiation, preparation, execution and delivery or performance
of any services under or in connection with this Agreement, including any
modification, supplement or waiver of any of the terms of this Agreement;
(2) in addition to and not in limitation of paragraph (1)
immediately above, all reasonable costs and expenses of the Collateral
Agent, the Securities Intermediary and the Custodial Agent (including,
without limitation, reasonable fees and expenses of counsel) in connection
with (i) any enforcement or
34
proceedings resulting or incurred in connection with causing any Holder of
Securities to satisfy its obligations under the Warrants forming a part of
the Securities and (ii) the enforcement of SECTION 9.6 and this SECTION
11.7;
(3) 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 (it being understood, however, that
none of the Collateral Agent, Securities Intermediary or Custodial Agent
shall have any duty or obligation in respect of any such filing,
registration, recording or perfection unless and until specifically
requested in writing by the Company to take any action in respect
thereto);
(4) all fees and expenses of any agent, expert or advisor appointed
by the Collateral Agent and, in the case of any agent, consented to by the
Company under SECTION 9.9 of this Agreement; and
(5) any other out-of-pocket costs and expenses reasonably incurred
by the Collateral Agent, the Securities Intermediary and the Custodial
Agent in connection with the performance of their duties hereunder.
Section 11.8 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:
(1) any lack of validity or enforceability of any provision of the
Warrants or the Securities or any other agreement or instrument relating
thereto;
(2) 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 the Securities under the related Warrants, or
any other amendment or waiver of any term of, or any consent to any
departure from any requirement of, the Warrant Agreement or any Warrant or
any other agreement or instrument relating thereto; or
(3) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
Section 11.9 NOTICE OF TAX EVENT, TAX EVENT REDEMPTION AND TERMINATION
EVENT.
Upon the occurrence of a Tax Event, a Tax Event Redemption or a
Termination Event, the Company shall deliver written notice to the Collateral
Agent and the Securities
35
Intermediary and unless and until any such notice is so delivered, the
Collateral Agent and the Securities Intermediary may conclusively presume that
no such events exist. Upon the written request of the Collateral Agent or the
Securities Intermediary, the Company shall inform such party whether or not a
Tax Event, a Tax Event Redemption or a Termination Event has occurred.
Section 11.10 BOOK-ENTRY INTERESTS.
Unless and until definitive, fully registered Certificates have been
issued to Beneficial Owners pursuant to Section 3.09 of the Warrant Agreement,
the Collateral Agent, Securities Intermediary and Custodial Agent shall be
entitled to deal with the Depositary for all purposes of this Agreement
(including the receipt or transfer of any funds hereunder) as the Holder of the
Securities, shall have no obligation to the Beneficial Owners and the rights of
the Beneficial Owners shall be exercised only through the Depositary and shall
be limited to those established by law and agreement between such Beneficial
Owners and the Depositary or the Depositary Participants. The provisions of
Sections 3.06 and 3.07 of the Warrant Agreement are hereby made applicable to
the Collateral Agent, Securities Intermediary and Custodial Agent, MUTATIS
MUTANDIS, as if they were the Warrant Agent as referred to therein.
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CITIZENS COMMUNICATIONS COMPANY THE CHASE
MANHATTAN BANK as Warrant Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By: By:
------------------------------------ -------------------------------------
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
Citizens Communications Company Xxx Xxxxx Xxxxxxxxx Xxxx
0 Xxxx Xxxxx Xxxx 000 Xxxx 00xx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, XX 00000 Xxx Xxxx, XX 00000
Attention: Secretary and Treasurer Attention: Institutional Trust
Services
Telecopy: (203) _________ Administration
Telecopy: (000) 000-0000
THE BANK OF NEW YORK, THE BANK OF NEW YORK,
As Collateral Agent as Securities Intermediary
By: By:
------------------------------------- -------------------------------------
Name: Xxxxxxxx Xxxxxx Name: Xxxxxxxx Xxxxxx
Title: Vice President Title: Vice President
Address for Notices: Address for Notices:
The Bank of New York The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 21 West 000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 10286 Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Attention: Corporate Trust
Administration- Administration-
Corporate Finance Unit Corporate Finance Unit
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
00
XXX XXXX XX XXX XXXX,
As Custodial Agent
By:
---------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
Address for Notices:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration-
Corporate Finance Unit
Telecopy: (000) 000-0000
38
EXHIBIT A
INSTRUCTION
FROM WARRANT AGENT
TO COLLATERAL AGENT
(Establishment of Treasury Equity Units)
The Bank of New York, as Collateral Agent
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration -Corporate Finance Unit
Telecopy: (000) 000-0000
Re: Equity Units of Citizens Communications Company (the "COMPANY")
The securities account of The Bank of New York, as Collateral Agent,
maintained by the Securities Intermediary and designated The Bank of
New York, as Collateral Agent of Citizens Communications Company, as
pledgee of The Chase Manhattan Bank, as the Warrant Agent on behalf
of and as attorney-in-fact for the Holders" (the "COLLATERAL
ACCOUNT")
Please refer to the Pledge Agreement, dated as of June ___, 2001 (the
"PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, as Securities
Intermediary, and as Custodial Agent and the undersigned bank, as Warrant Agent
and as attorney-in-fact for the holders of Equity Units from time to time.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
We hereby notify you in accordance with Section 5.2(a) of the Pledge
Agreement that the holder of securities named below (the "HOLDER") has elected
to substitute $__________ Value of Treasury Securities or security entitlements
thereto in exchange for an equal Value of Pledged Notes relating to _________
Equity Units and has delivered to the undersigned a notice stating that the
Holder has Transferred such Treasury Securities or security entitlements with
respect thereto to the Securities Intermediary for credit to the Collateral
Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or security entitlements with respect
thereto have been credited to the Collateral Account, to release to the
undersigned an equal Value of Pledged Notes in accordance with SECTION 5.2 of
the Pledge Agreement. We also hereby confirm that we have not received notice
from the Company that a Tax Event Redemption has occurred.
A-1
THE CHASE MANHATTAN BANK,
Date: as Warrant Agent and as attorney-in-fact
---------- of the Holders from time to time of the
Securities
By:
-------------------------------------
Name:
Title:
A-2
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements thereto for the Pledged Notes:
----------------------------- ------------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
-----------------------------
Address
-----------------------------
----------------------------
TRADES Account No. of or through
which Holder transferred
Treasury Securities
A-3
EXHIBIT B
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Establishment of Treasury Equity Units)
The Bank of New York, as Securities Intermediary
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration-Corporate Finance Unit
Telecopy: (000) 000-0000
Re: Equity Units of Citizens Communications Company (the "COMPANY")
The securities account of The Bank of New York, as Collateral Agent,
maintained by the Securities Intermediary and designated The Bank of
New York, as Collateral Agent of Citizens Communications Company, as
pledgee of The Chase Manhattan Bank, as the Warrant Agent on behalf
of and as attorney-in-fact for the Holders" (the "COLLATERAL
ACCOUNT")
Please refer to the Pledge Agreement, dated as of June ___, 2001 (the
"PLEDGE AGREEMENT"), among the Company, you, as Securities Intermediary, as
Custodial Agent and as Collateral Agent, The Chase Manhattan Bank, as Warrant
Agent and as attorney-in-fact for the holders of Equity Units from time to time,
and the undersigned bank, as Collateral Agent. Capitalized terms used herein but
not defined shall have the meanings set forth in the Pledge Agreement.
When you have confirmed that $__________ Value of Treasury Securities or
security entitlements with respect thereto has been credited to the Collateral
Account by or for the benefit of _________, as Holder of Equity Units (the
"HOLDER") pursuant to Section 5.2(a) of the Pledge Agreement, you are hereby
instructed to release from the Collateral Account an equal Value of Notes or
security entitlements with respect thereto relating to _____ Equity Units of the
Holder by Transfer to the Warrant Agent.
The Bank of New York,
Dated: as Collateral Agent
---------
By:
-----------------------------------
Name:
Title:
B-1
Please print name and address of Holder:
----------------------------- ------------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
-----------------------------
Address
-----------------------------
-----------------------------
----------------------------
TRADES Account No. of or through
which Holder transferred
Treasury Securities
B-2
EXHIBIT C
INSTRUCTION
FROM WARRANT AGENT
TO COLLATERAL AGENT
(Reestablishment of Equity Units )
The Bank of New York, as Collateral Agent
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration-Corporate Finance Unit
Telecopy: (000) 000-0000
Re: Equity Units of Citizens Communications Company (the "COMPANY")
Please refer to the Pledge Agreement dated as of June ___, 2001 (the
"PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, Securities
Intermediary, and as Custodial Agent, and the undersigned bank, as Warrant Agent
and as attorney-in-fact for the holders of Equity Units from time to time.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
We hereby notify you in accordance with Section 5.3(a) of the Pledge
Agreement that the holder of securities listed below (the "HOLDER") has elected
to substitute $_____________ Value of Notes or security entitlements with
respect thereto in exchange for $__________ Value of Pledged Treasury Securities
and has delivered to the undersigned a notice stating that the holder has
Transferred such Notes or security entitlements with respect thereto to the
Securities Intermediary for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Notes or security entitlements with respect thereto have
been credited to the Collateral Account, to release to the undersigned
$__________ Value of Treasury Securities or security entitlements with respect
thereto related to _____ Equity Units of such Holder in accordance with Section
5.3(a) of the Pledge Agreement. We also hereby confirm that we have not received
written notice from the Company that a Tax Event Redemption or a successful
Initial Remarketing has occurred.
THE CHASE MANHATTAN BANK,
Date: as Warrant Agent
----------
By:
---------------------------------
Name:
Title:
C-1
Please print name and address of Holder electing to substitute Pledged
Notes or security entitlements thereto for Pledged Treasury Securities:
----------------------------- ------------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
-----------------------------
Address
-----------------------------
-----------------------------
-----------------------------
DTC Account No. through which
Holder transferred Notes or
security entitlements thereto
C-2
EXHIBIT D
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Reestablishment of Equity Units)
The Bank of New York, as Securities Intermediary
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration-Corporate Finance Unit
Telecopy: (000) 000-0000
Re: _______ Equity Units of Citizens Communications Company
(the "COMPANY")
The securities account of The Bank of New York, as Collateral Agent,
maintained by the Securities Intermediary and designated The Bank of
New York, as Collateral Agent of Citizens Communications Company, as
pledgee of The Chase Manhattan Bank, as the Warrant Agent on behalf
of and as attorney-in-fact for the Holders" (the "COLLATERAL
ACCOUNT")
Please refer to the Pledge Agreement dated as of June ___, 2001 (the
"PLEDGE AGREEMENT"), among the Company, you, as Securities Intermediary and as
Custodial Agent, The Bank of New York, as Custodial Agent, The Chase Manhattan
Bank, as Warrant Agent and as attorney-in-fact for the holders of Equity Units
from time to time, and the undersigned bank, as Collateral Agent. Capitalized
terms used herein but no defined shall have the meaning set forth in the Pledge
Agreement.
When you have confirmed that $ __________ Value of Notes or security
entitlements with respect thereto has been credited to the Collateral Account by
or for the benefit of ________________, as Holder of Equity Units (the
"HOLDER"), you are hereby instructed to release from the Collateral Account $
________________ Value of Treasury Securities or security entitlements with
respect thereto by Transfer to the Warrant Agent.
The Bank of New York,
Dated: as Collateral Agent
---------
By:
---------------------------------
Name:
Title:
D-1
----------------------------- ------------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
-----------------------------
Address
-----------------------------
-----------------------------
----------------------------
DTC Account No. through which
Holder transferred Notes or
security entitlements thereto
D-2
EXHIBIT E
NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY
TO WARRANT AGENT
(Cash Settlement Amounts)
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trustee Administration
Telecopy:
--------------
Re: Equity Units of Citizens Communications Company
(the "COMPANY")
Please refer to the Pledge Agreement dated as of June ___, 2001 (the
"PLEDGE AGREEMENT"), by and among you, the Company, The Bank of New York, as
Collateral Agent and as Custodial Agent and the undersigned bank, as Securities
Intermediary. Unless otherwise defined herein, terms defined in the Pledge
Agreement are used herein as defined therein.
In accordance with Section 5.5(d) of the Pledge Agreement, we hereby
notify you that as of 11:00 a.m. (New York City time) [(i) on the fourth
Business Day immediately preceding August 17, 2004], [on the Business Day
immediately preceding August 17, 2004], we have received [(i) $ _______________
in immediately available funds paid in an aggregate amount equal to the Purchase
Price to the Company on the Warrant Settlement Date with respect to
________________ Equity Units] [(ii) $ ___________ in immediately available
funds paid in an aggregate amount equal to the Purchase Price to the Company on
the Warrant Settlement Date with respect to ______ Treasury Equity Units].
The Bank of New York,
Date: as Securities Intermediary
----------
By:
--------------------------------
Name:
Title:
E-1
EXHIBIT F
TO CUSTODIAL AGENT REGARDING REMARKETING
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration-Corporate Finance Unit
Telecopy: (000) 000-0000
Re: Notes of Citizens Communications Company
The undersigned hereby notifies you in accordance with Section 5.6(c) of
the Pledge Agreement, dated as of June ___, 2001 (the "PLEDGE AGREEMENT"), among
Citizens Communications Company, yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent, and The Chase Manhattan Bank, as Warrant Agent
and as attorney-in-fact for the Holders of Equity Units and of Treasury Equity
Units from time to time, that the undersigned elects to deliver $____ principal
amount of Notes for delivery to the Remarketing Agent on the Business Day
immediately preceding the [Initial Remarketing Date] [Final Remarketing Date]
for remarketing pursuant to Section 5.6(c) of the Pledge Agreement. The
undersigned will, upon request of the Remarketing Agent, execute and deliver any
additional documents deemed by the Remarketing Agent or by the Company to be
necessary or desirable to complete the sale, assignment and transfer of the
Notes tendered hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of such
remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions". The undersigned hereby instructs you, in the event of a
Failed [Initial] [Final] Remarketing, upon receipt of the Notes tendered
herewith from the Remarketing Agent, to deliver the Notes to the person(s) and
at 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 5.6(c) of the Pledge Agreement.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date:
---------------------
By:
-----------------------------
F-1
Name:
Title:
Signature Guarantee:
Please print name and address:
--------------------------------- --------------------------------------------
Name Social Security or other
Taxpayer Identification
Number, if any
Address
----------------------------------
----------------------------------
----------------------------------
--------------------------------------------------------------------------------
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 failed remarketing, Notes which are in physical form should be
delivered to the person(s) set forth below and mailed to the address set forth
below.
Name(s)
--------------------------------------------------------------------------------
(Please Print)
Address
--------------------------------------------------------------------------------
(Please Print)
--------------------------------------------------------------------------------
(Zip Code)
--------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
In the event of a failed remarketing, Notes which are in book-entry form should
be credited to the account at The Depository Trust Company set forth below.
--------------------------------------------------------------------------------
DTC Account Number
Name of Account Party:
--------------------------------------
--------------------------------------------------------------------------------
F-2
EXHIBIT G
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration-Corporate Finance Unit
Telecopy: (000) 000-0000
Re: Notes Citizens Communications Company
The undersigned hereby notifies you in accordance with Section 5.7(c) of
the Pledge Agreement, dated as of June ___, 2001 (the "PLEDGE AGREEMENT"), among
Citizens Communications Company, yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent, and The Chase Manhattan Bank, as Warrant Agent
and as attorney-in-fact for the Holders of Equity Units and Treasury Equity
Units from time to time, that the undersigned elects to withdraw the $___
principal amount of Notes delivered to the Custodial Agent on _________ ___,
____ for remarketing pursuant to Section 5.7(c) of the Pledge Agreement. The
undersigned hereby instructs you to return such Notes to the person(s) and at
the address(es) indicated herein under "Delivery Instructions." With this
notice, the undersigned hereby agrees to be bound by the terms and conditions of
Section 5.7(c) of the Pledge Agreement. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Date:
----------
By:
--------------------------------------------
Name:
Title:
Signature Guarantee:
Please print name and address:
-------------------------------- --------------------------------------------
Name Social Security or other
Taxpayer Identification
Number, if any
Address
--------------------------------
--------------------------------
--------------------------------
G-1
--------------------------------------------------------------------------------
DELIVERY INSTRUCTIONS
--------------------------------------------------------------------------------
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)
Notes which are in book-entry form should be credited to the account at The
Depository Trust Company set forth below.
--------------------------------------------------------------------------------
DTC Account Number
Name of Account Party:
--------------------------------------
--------------------------------------------------------------------------------
G-2
EXHIBIT H
NOTICE TO DELIVER TREASURY PORTFOLIO
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Corporate Trust Administration-Corporate Finance Unit
Re: ________ Equity Units of Citizens Communications Company, a
Delaware corporation (the "COMPANY")
The undersigned Holder hereby irrevocably notifies you in accordance with
Section 5.02 of the Warrant Agreement, dated as of June __, 2001 (the "WARRANT
AGREEMENT"); unless otherwise defined herein, terms defined in the Warrant
Agreement are used herein as defined herein), between the Company and you, as
Warrant Agent and as Attorney-in-Fact for the Holders of the Warrants, that such
Holder has elected to deliver its Applicable Ownership Interest in the Treasury
Portfolio to be purchased and substituted for the Holder's Notes on the
applicable Reset Effective Date. The undersigned Holder hereby instructs you to
notify promptly the Remarketing Agent of the undersigned Holders' election to
deliver such Treasury Portfolio with respect to the Notes related to such
Holder's Equity Units.
Date:_______________________ __________________________________
Signature
Signature Guarantee:_________________
Please print name and address of Registered Holder:
-------------------------------- --------------------------------------------
Name Social Security or other
Taxpayer Identification
Number, if any
Address
--------------------------------
--------------------------------
--------------------------------
DTC Account No. of Holder
H-1
EXHIBIT I
INSTRUCTION TO WARRANT AGENT AND SECURITIES INTERMEDIARY
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trustee Administration
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration-Corporate Finance Unit
Telecopy: (000) 000-0000
Re: Equity Units of Citizens Communications Company (the
"Company")
The undersigned Holder hereby notifies you that it has delivered to the
Remarketing Agent, for credit to the Collateral Account, Treasury Securities
representing its Applicable Ownership Interest in the Treasury Portfolio in
exchange for $__________ Notes, held in the Collateral Account in respect of the
number of Equity Units specified below, in accordance with the Pledge Agreement,
dated as of ______ ___, 2001 (the "Pledge Agreement"; unless otherwise defined
herein, terms defined in the Pledge Agreement are used herein as defined
therein). The undersigned Holder has paid 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 Notes related to
such Equity Units.
Date:_______________________ __________________________________
Signature
Signature Guarantee:_________________
Please print name and address of Registered Holder:
------------------------------- --------------------------------------------
Name Social Security or other
Taxpayer Identification
Number, if any
Address
------------------------------- Number of Equity Units______________________
------------------------------
------------------------------
I-1
EXHIBIT J
INSTRUCTION FROM WARRANT AGENT
TO COLLATERAL AGENT
The Bank of New York
000 Xxxxxxx Xxxxxx - 0000
Xxx Xxxx, XX 00000
Re: Equity Units of Citizens Communications Company (the
"Company")
Please refer to the Pledge Agreement dated as of _______ __, 2001 (the
"Pledge Agreement"), among the Company, you, as Collateral Agent, Securities
Intermediary and Custodial Agent, and the undersigned, as Warrant Agent and as
attorney-in-fact for the holders of Equity Units from time to time. Capitalized
terms used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
We hereby instruct you in accordance with SECTION 7.3 of the Pledge
Agreement that we have received notice from the Holder named below that the
Holder has elected to substitute $________ per Note as permitted under Section
5.02 of the Warrant Agreement through delivery to the Remarketing Agent of the
Treasury Portfolio. The Applicable Ownership Interest of the Treasury Portfolio
will, upon receipt thereof from the Remarketing Agent, be substituted for the
Pledged Note. We have received a notice stating that the Holder has delivered
its Applicable Ownership Interest in the Treasury Portfolio to the Remarketing
Agent.
We hereby request that you as the Collateral Agent cause the Securities
Intermediary, upon confirmation that such Applicable Ownership Interest of the
Treasury Portfolio has been credited to the Collateral Account, to release to us
for delivery to such Holder _________ principal amount of the Pledged Note in
accordance with SECTION 7.3 of the Pledge Agreement.
THE CHASE MANHATTAN BANK,
as Warrant Agent
Date: By:
-------------------------- -----------------------------------------
Name:
Title:
J-1
