EXHIBIT 4.7
SOLECTRON CORPORATION
U.S. BANK, N.A.
AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
AS PURCHASE CONTRACT AGENT
PLEDGE AGREEMENT
DATED AS OF DECEMBER 27, 2001
TABLE OF CONTENTS
ARTICLE I DEFINITIONS................................................................. 2
SECTION 1.1 Definitions........................................................... 2
ARTICLE II PLEDGE; CONTROL AND PERFECTION............................................. 4
SECTION 2.1 The Pledge............................................................ 4
SECTION 2.2 Control and Perfection................................................ 5
ARTICLE III PAYMENTS ON PLEDGED COLLATERAL............................................ 7
SECTION 3.1 Payments.............................................................. 7
SECTION 3.2 Application of Payments............................................... 8
ARTICLE IV SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF DEBENTURES............... 9
SECTION 4.1 Collateral Substitution and the Creation of Stripped
Units........................................................... 9
SECTION 4.2 Collateral Substitution and the Re-Creation of Normal
Units........................................................... 10
SECTION 4.3 Termination Event..................................................... 10
SECTION 4.4 Early Settlement; Merger Early Settlement............................. 11
SECTION 4.5 Remarketing; Application of Proceeds; Settlement...................... 12
ARTICLE V VOTING RIGHTS -- DEBENTURES................................................. 14
SECTION 5.1 Exercise by Purchase Contract Agent................................... 14
ARTICLE VI RIGHTS AND REMEDIES; TAX EVENT REDEMPTION.................................. 15
SECTION 6.1 Rights and Remedies of the Collateral Agent........................... 15
SECTION 6.2 Substitutions......................................................... 16
SECTION 6.3 Tax Event Redemption.................................................. 16
ARTICLE VII REPRESENTATIONS AND WARRANTIES; COVENANTS................................. 17
SECTION 7.1 Representations and Warranties of the Holders......................... 17
SECTION 7.2 Representations and Warranties of the Collateral Agent,
Custodial Agent and Securities Intermediary..................... 17
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SECTION 7.3 Covenants............................................................. 18
ARTICLE VIII THE COLLATERAL AGENT..................................................... 18
SECTION 8.1 Appointment, Powers and Immunities.................................... 18
SECTION 8.2 Instructions of the Company........................................... 20
SECTION 8.3 Reliance.............................................................. 20
SECTION 8.4 Rights in Other Capacities............................................ 21
SECTION 8.5 Non-Reliance on Collateral Agent...................................... 21
SECTION 8.6 Compensation and Indemnity............................................ 22
SECTION 8.7 Failure to Act........................................................ 22
SECTION 8.8 Resignation........................................................... 23
SECTION 8.9 Right to Appoint Agent or Advisor..................................... 24
SECTION 8.10 Survival............................................................. 25
SECTION 8.11 Exculpation.......................................................... 25
ARTICLE IX AMENDMENT.................................................................. 25
SECTION 9.1 Amendment Without Consent of Holders.................................. 25
SECTION 9.2 Amendment with Consent of Holders..................................... 26
SECTION 9.3 Execution of Amendments............................................... 26
SECTION 9.4 Effect of Amendments.................................................. 27
SECTION 9.5 Reference to Amendments............................................... 27
ARTICLE X MISCELLANEOUS............................................................... 27
SECTION 10.1 No Waiver............................................................ 27
SECTION 10.2 GOVERNING LAW........................................................ 27
SECTION 10.3 Notices.............................................................. 28
SECTION 10.4 Successors and Assigns............................................... 28
SECTION 10.5 Counterparts......................................................... 28
SECTION 10.6 Severability......................................................... 29
SECTION 10.7 Expenses, Etc........................................................ 29
SECTION 10.8 Security Interest Absolute........................................... 29
SECTION 10.9 Waiver of Jury Trial................................................. 30
EXHIBIT A Instruction from Purchase Contract Agent to Collateral Agent
EXHIBIT B Instruction to Purchase Contract Agent
EXHIBIT C Instruction to Custodial Agent Regarding Remarketing
EXHIBIT D Instruction to Custodial Agent Regarding Withdrawal from Remarketing
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of December 27, 2001 (this "Agreement"), among
Solectron Corporation, a Delaware corporation (the "Company"), U.S. Bank, N.A.,
a national banking association duly organized and validly existing under the
laws of the United States, not individually but solely as collateral agent (in
such capacity, together with its successors in such capacity, the "Collateral
Agent"), as custodial agent (in such capacity, together with its successors in
such capacity, the "Custodial Agent") and as "securities intermediary" as
defined in Section 8-102(a)(14) of the Code (as defined herein) (in such
capacity, together with its successors in such capacity, the "Securities
Intermediary"), and State Street Bank and Trust Company of California, N.A., a
national banking association, not individually but solely as purchase contract
agent and as attorney-in-fact of the Holders from time to time of the Units (in
such capacity, together with its successors in such capacity, the "Purchase
Contract Agent") under the Purchase Contract Agreement (as defined herein).
RECITALS
WHEREAS, the Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued Units having a Stated Amount
of $25 per Unit, all of which will initially be Normal Units.
WHEREAS, each Normal Unit will be comprised of (a) a Purchase Contract
and (b) either beneficial ownership of (i) a Debenture or (ii) following a Tax
Event Redemption or a successful remarketing of the Debentures in accordance
with the Purchase Contract Agreement and the Remarketing Agreement, the
appropriate Treasury Consideration.
WHEREAS, in accordance with the terms of the Purchase Contract Agreement,
a holder of Normal Units may separate the Debentures or the appropriate Treasury
Consideration, as applicable, from the related Purchase Contracts by
substituting for such Debentures or the appropriate Treasury Consideration, as
the case may be, Treasury Securities that will pay in the aggregate an amount
equal to the aggregate Stated Amount of such Normal Units. Upon such separation,
the Normal Units will become Stripped Units. Each Stripped Unit will be
comprised of (a) a Purchase Contract and (b) a 1/40 undivided beneficial
interest in a Treasury Security.
WHEREAS, pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Units have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Debentures, any
Treasury Consideration and any Treasury Securities delivered in exchange
therefor to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof.
NOW, THEREFORE, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company, the
Collateral Agent, the Securities Intermediary, the Custodial Agent and the
Purchase Contract Agent, on its own behalf and as attorney-in-fact of the
Holders from time to time of the Units, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
For all purposes of this agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) capitalized terms used but not defined herein are used as defined in
the Purchase Contract Agreement;
(b) the defined terms in this Agreement have the meanings assigned to
them in this Article and include the plural as well as the singular; and
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the securities account (number 00000000)
maintained at the Security Intermediary in the name "U.S. Bank, N.A., as
Collateral Agent, for the benefit of Solectron Corporation, as pledgee," and any
successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this Agreement.
"Company" means the Person named as the "Company" in the first paragraph
of this Agreement until a successor shall have become such, and thereafter
"Company" shall mean such successor.
"Custodial Agent" has the meaning specified in the first paragraph of
this Agreement.
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"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Debentures" has the meaning specified in Section 2.1 hereof.
"Pledged Treasury Consideration" has the meaning specified in Section 2.1
hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Proceeds" means all interest, dividends, cash, instruments, securities,
financial assets (as defined in Section 8-102(a)(9) of the Code) and other
property from time to time received, receivable or otherwise distributed upon
the sale, exchange, collection or disposition of the Collateral or any proceeds
thereof.
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section 8-102(a) (17)
of the Code.
"Separate Debentures" means any Debentures that are not Pledged
Debentures.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance with
the instructions of the Collateral Agent, the Purchase Contract Agent or the
Holder, as applicable:
(i) in the case of Collateral consisting of securities which cannot be
delivered by book-entry or which the parties agree are to be delivered in
physical form, delivery in appropriate physical form to the recipient
accompanied by any duly executed instruments of transfer, assignments in
blank, transfer tax stamps and any other documents necessary to constitute a
legally valid transfer to the recipient;
(ii) in the case of Collateral consisting of securities maintained in
book-entry form by causing a "securities intermediary" (as defined in Section
8-102(a)(14) of the
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Code) to (a) credit a "security entitlement" (as defined in Section
8-102(a)(17) of the Code) with respect to such securities to a "securities
account" (as defined in Section 8-501(a) of the Code) maintained by or on
behalf of the recipient and (b) to issue a confirmation to the recipient with
respect to such credit. In the case of Collateral to be delivered to the
Collateral Agent, the securities intermediary shall be the Securities
Intermediary and the securities account shall be the Collateral Account. In
addition, any Transfer of Treasury Securities and Treasury Consideration
hereunder shall be made in accordance with the TRADES Regulations and other
applicable law.
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
SECTION 2.1 The Pledge.
(a) The Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, and the Purchase Contract Agent, as such
attorney-in-fact, hereby pledge and grant to the Collateral Agent, for the
benefit of the Company, as collateral security for the performance when due
by such Holders of their respective obligations under the related Purchase
Contracts, a security interest in all of the right, title and interest of the
Purchase Contract Agent and such Holders in:
(i) (A) the Debentures, Treasury Consideration and Treasury
Securities, as the case may be, constituting a part of the Units,
(B) any Treasury Securities delivered in exchange for any
Debentures or Treasury Consideration, as applicable, in accordance
with Section 4.1 hereof, and (C) any Debentures or Treasury
Consideration, as applicable, delivered in exchange for any
Treasury Securities in accordance with Section 4.2 hereof, in each
case that have been Transferred to or otherwise received by the
Collateral Agent and not released by the Collateral Agent to such
Holders under the provisions of this Agreement;
(ii) the Collateral Account and all securities, financial assets,
security entitlements, cash and other property credited thereto
and all Security Entitlements related thereto;
(iii) the Redemption Treasury Portfolio purchased on behalf of the
Holders of Normal Units by the Collateral Agent upon the
occurrence of a Tax Event Redemption as provided in Section 6.3;
and
(iv) all Proceeds of the foregoing (all of the foregoing, collectively,
the "Collateral").
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(b) Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Units, shall cause the Debentures comprising a part of the Normal Units to be
Transferred to the Collateral Agent for the benefit of the Company.
(c) The pledge provided in this Section 2.1 is herein referred to as the
"Pledge" and the Debentures (or the Debentures that are delivered pursuant to
Section 6.2 hereof), Treasury Consideration or Treasury Securities subject to
the Pledge, excluding any Debentures, Treasury Consideration or Treasury
Securities released from the Pledge as provided in Sections 4.1, 4.2 and 6.3
hereof are hereinafter referred to as "Pledged Debentures," "Pledged Treasury
Consideration" or the "Pledged Treasury Securities," respectively. Subject to
the Pledge and the provisions of Section 2.2 hereof, the Holders from time to
time shall have full beneficial ownership of the Collateral. For purposes of
perfecting the Pledge under applicable law, including, to the extent applicable,
the TRADES Regulations or the Uniform Commercial Code as adopted and in effect
in any applicable jurisdiction, the Collateral Agent shall be the agent of the
Company as provided herein. Whenever directed by the Collateral Agent acting on
behalf of the Company, the Securities Intermediary shall have the right to
reregister the Debentures or any other securities held in physical form in its
name.
(d) Except as may be required in order to release Debentures or Treasury
Consideration, as applicable, in connection with a Holder's election to convert
its investment from a Normal Unit to a Stripped Unit, or except as otherwise
required to release Debentures as specified herein, neither the Collateral
Agent, the Custodial Agent nor the Securities Intermediary shall relinquish
physical possession of any certificate evidencing a Debenture prior to the
termination of this Agreement. If it becomes necessary for the Securities
Intermediary to relinquish physical possession of a certificate in order to
release a portion of the Debentures evidenced thereby from the Pledge, the
Securities Intermediary shall use its best efforts to obtain physical possession
of a replacement certificate evidencing any Debentures remaining subject to the
Pledge hereunder registered to it or endorsed in blank within fifteen days of
the date it relinquished possession. The Securities Intermediary shall promptly
notify the Company and the Collateral Agent of the Securities Intermediary's
inability to obtain possession of any such replacement certificate as required
hereby.
SECTION 2.2 Control and Perfection.
(a) In connection with the Pledge granted in Section 2.1, and subject to
the other provisions of this Agreement, the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, hereby authorize
and direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent may deliver upon the written direction of the Company with
respect to the Collateral Account, the Collateral credited thereto and
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any Security Entitlements with respect to any thereof. In the event the
Securities Intermediary receives from the Holders or the Purchase Contract Agent
entitlement orders which conflict with entitlement orders received from the
Collateral Agent, the Securities Intermediary shall follow the entitlement
orders received from the Collateral Agent. Such instructions and entitlement
orders may, without limitation, direct the Securities Intermediary to transfer,
redeem, assign, or otherwise deliver the Debentures, the Treasury Consideration,
the Treasury Securities, and any Security Entitlements with respect thereto or
sell, liquidate or dispose of such assets through a broker designated by the
Company, and to pay and deliver any income, proceeds or other funds derived
therefrom to the Company. The Holders from time to time acting through the
Purchase Contract Agent hereby further authorize and direct the Collateral
Agent, as agent of the Company, to, upon written direction of the Company,
itself issue instructions and entitlement orders, and otherwise to take action,
with respect to the Collateral Account, the Collateral credited thereto and any
Security Entitlements with respect thereto, pursuant to the terms and provisions
hereof, all without the necessity of obtaining the further consent of the
Purchase Contract Agent or any of the Holders. The Collateral Agent shall be the
agent of the Company and shall act as directed in writing by the Company.
Without limiting the generality of the foregoing, the Collateral Agent shall
issue entitlement orders to the Securities Intermediary when and as directed in
writing by the Company.
(b) The Securities Intermediary hereby confirms and agrees that:
(i) all securities or other property underlying any financial assets
credited to the Collateral Account shall be registered in the name
of the Securities Intermediary, or its nominee, indorsed to the
Securities Intermediary, or its nominee, or in blank or credited
to another Collateral Account maintained in the name of the
Securities Intermediary and in no case will any financial asset
credited to the Collateral Account be registered in the name of
the Purchase Contract Agent, the Collateral Agent, the Company or
any Holder, payable to the order of, or specially indorsed to, the
Purchase Contract Agent, the Collateral Agent, the Company or any
Holder except to the extent the foregoing have been specially
indorsed to the Securities Intermediary or in blank;
(ii) all property delivered to the Securities Intermediary pursuant to
this Pledge Agreement (including, without limitation, any
Debentures, the Treasury Consideration or Treasury Securities)
will be promptly credited to the Collateral Account;
(iii) the Collateral Account is an account to which financial assets are
or may be credited, and the Securities Intermediary shall, subject
to the terms of this Agreement, treat the Purchase Contract Agent
as entitled to exercise the rights of any financial asset credited
to the Collateral Account;
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(iv) the Securities Intermediary has not entered into, and until the
termination of this Agreement will not enter into, any agreement
with any other person relating to the Collateral Account and/or
any financial assets credited thereto pursuant to which it has
agreed to comply with entitlement orders (as defined in Section
8-102(a)(8) of the Code) of such other person; and
(v) the Securities Intermediary has not entered into, and until the
termination of this Agreement will not enter into, any agreement
with the Company, the Collateral Agent or the Purchase Contract
Agent purporting to limit or condition the obligation of the
Securities Intermediary to comply with entitlement orders as set
forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item of property
(whether investment property, financial asset, security, instrument or cash)
credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorney-in-fact to take on behalf of, and in
the name, place and stead of the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such
power-of-attorney shall not be deemed to require of the Collateral Agent any
specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder. Notwithstanding the foregoing, in no event shall the Collateral Agent
or Securities Intermediary be responsible for the preparation or filing of any
financing or continuation statements in the appropriate jurisdictions or
responsible for maintenance or perfection of any Security Interest hereunder.
ARTICLE III
PAYMENTS ON PLEDGED COLLATERAL
SECTION 3.1 Payments.
So long as the Purchase Contract Agent is the registered owner of the
Pledged Debentures or Pledged Treasury Consideration, it shall receive all
payments thereon. If the Pledged Debentures or Pledged Treasury Consideration
are reregistered, such that the Collateral Agent becomes the registered holder,
all payments of the principal of, or interest on, the Pledged Debentures and all
payments of the principal of, or cash distributions on, any Pledged Treasury
Consideration, and in any event all payments of
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principal of Pledged Treasury Securities, that are received by the Collateral
Agent and that are properly payable hereunder shall be paid by the Collateral
Agent by wire transfer in same day funds:
(i) in the case of (A) quarterly cash distributions on Normal Units
which include Pledged Debentures or Pledged Treasury Consideration
and (B) any payments with respect to any Debentures or Treasury
Consideration, as the case may be, that have been released from
the Pledge pursuant to Section 4.3 hereof, to the Purchase
Contract Agent, for the benefit of the relevant Holders of the
Normal Units, to the account designated by the Purchase Contract
Agent for such purpose (State Street Bank and Trust Company; ABA
011-00-0028; Account Name: Solectron Corporation; Account No.
0000-000-0, unless and until advised otherwise by the Purchase
Contract Agent), no later than 12:00 p.m., New York City time, on
the Business Day such payment is received by the Collateral Agent
(provided that in the event such payment or payment instructions
are received by the Collateral Agent on a day that is not a
Business Day or after 9:00 a.m., New York City time, on a Business
Day, then such payment shall be made no later than 9:30 a.m., New
York City time, on the next succeeding Business Day);
(ii) in the case of any payments with respect to any Treasury
Securities that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Holders of the Stripped Units to the
accounts designated by the Purchase Contract Agent in writing for
such purpose no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral Agent
(provided that in the event such payment or payment instructions
are received by the Collateral Agent on a day that is not a
Business Day or after 10:00 a.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30
a.m., New York City time, on the next succeeding Business Day);
and
(iii) in the case of payments in respect of any Pledged Debentures,
Pledged Treasury Consideration or Pledged Treasury Securities, to
be paid upon settlement of such Holder's obligations to purchase
Common Stock under the Purchase Contract, to the Company on the
Stock Purchase Date in accordance with the procedure set forth in
Section 4.5(a) or 4.5(b) hereof, in full satisfaction of the
respective obligations of the Holders under the related Purchase
Contracts.
SECTION 3.2 Application of Payments.
All payments received by the Purchase Contract Agent as provided herein
shall be applied by the Purchase Contract Agent pursuant to the provisions of
the Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent
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shall receive any payments of principal on account of any Debenture or Treasury
Consideration, as applicable, that, at the time of such payment, is a Pledged
Debenture or Pledged Treasury Consideration, as the case may be, or a Holder of
a Stripped Unit shall receive any payments of principal on account of any
Treasury Securities that, at the time of such payment, are Pledged Treasury
Securities, the Purchase Contract Agent or such Holder shall hold the same as
trustee of an express trust for the benefit of the Company (and promptly deliver
the same over to the Company) for application to the obligations of the Holders
under the related Purchase Contracts, and the Holders shall acquire no right,
title or interest in any such payments of principal so received.
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF DEBENTURES
SECTION 4.1 Collateral Substitution and the Creation of Stripped Units.
At any time on or prior to the fourth Business Day immediately preceding
the Stock Purchase Date, a Holder of Normal Units shall have the right to
substitute Treasury Securities for the Pledged Debentures or Pledged Treasury
Consideration, as the case may be, securing such Holder's obligations under the
Purchase Contracts comprising a part of such Normal Units, in integral multiples
of 40 Normal Units, or after a Tax Event Redemption or a successful remarketing
of the Debentures pursuant to the Purchase Contract Agreement, in integral
multiples of Normal Units such that Treasury Securities to be deposited and the
applicable Treasury Consideration to be released are in integral multiples of
$1,000, by (a) Transferring to the Collateral Agent Treasury Securities having
an aggregate principal amount equal to the aggregate Stated Amount of such
Normal Units and (b) delivering such Normal Units to the Purchase Contract
Agent, accompanied by a notice, substantially in the form of Exhibit B hereto,
to the Purchase Contract Agent stating that such Holder has Transferred Treasury
Securities to the Collateral Agent pursuant to clause (a) above (stating the
principal amount, the maturities and the CUSIP numbers of the Treasury
Securities Transferred by such Holder) and requesting that the Purchase Contract
Agent instruct the Collateral Agent to release from the Pledge the Pledged
Debentures or Pledged Treasury Consideration, as the case may be, related to
such Normal Units, whereupon the Purchase Contract Agent shall promptly give
such instruction to the Collateral Agent in the form provided in Exhibit A.
Notwithstanding the foregoing a Holder may not separate the Pledged Debentures
or Pledged Treasury Consideration as the case may be, from the related Purchase
Contract in respect of Normal Units held by such Holder during the periods
beginning on the fourth Business Day prior to the Remarketing Date or any
Subsequent Remarketing Date, as the case may be, and ending on the third
Business Day following such dates. Upon receipt of Treasury Securities from a
Holder of Normal Units and the related instruction from the Purchase Contract
Agent, the Collateral Agent shall release the Pledged Debentures or Pledged
Treasury Consideration, as the case may be, and shall promptly Transfer such
Pledged Debentures or Pledged Treasury Consideration, as the case may
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be, free and clear of any lien, pledge or security interest created hereby, to
the Purchase Contract Agent. All items Transferred and/or substituted by any
Holder pursuant to this Section 4.1, Section 4.2 or any other Section of this
Agreement shall be Transferred and/or substituted free and clear of all liens,
claims and encumbrances.
SECTION 4.2 Collateral Substitution and the Re-Creation of Normal Units.
At any time on or prior to the fourth Business Day immediately preceding
the Stock Purchase Date, a Holder of Stripped Units shall have the right to
reestablish Normal Units (a) consisting of the Purchase Contracts and Debentures
in integral multiples of 40 Normal Units, or (b) or after a Tax Event Redemption
or a successful remarketing of the Debentures pursuant to the Purchase Contract
Agreement, consisting of the Purchase Contracts and the appropriate Treasury
Consideration (identified and calculated by reference to the Treasury
Consideration then comprising Normal Units) in integral multiples of Stripped
Units such that the Treasury Consideration to be deposited and the Treasury
Securities to be released are in integral multiples of $1,000, by (x)
Transferring to the Collateral Agent Debentures or the appropriate Treasury
Consideration, as the case may be, then comprising such number of Normal Units
as is equal to such Stripped Units and (y) delivering such Stripped Units to the
Purchase Contract Agent, accompanied by a notice, substantially in the form of
Exhibit B hereto, to the Purchase Contract Agent stating that such Holder has
transferred Debentures or Treasury Consideration to the Collateral Agent
pursuant to clause (a) above and requesting that the Purchase Contract Agent
instruct the Collateral Agent to release from the Pledge the Pledged Treasury
Securities related to such Stripped Units, whereupon the Purchase Contract Agent
shall give such instruction to the Collateral Agent in the form provided in
Exhibit A. Notwithstanding the foregoing, a Holder may not reestablish Normal
Units during the periods beginning on the fourth Business Day prior to the
Remarketing Date or any Subsequent Remarketing Date, as the case may be, and
ending on the third Business Day following such dates. Upon receipt of the
Debentures or the appropriate Treasury Consideration, as the case may be, from
such Holder and the instruction from the Purchase Contract Agent, the Collateral
Agent shall release the Pledged Treasury Securities and shall promptly Transfer
such Treasury Securities, free and clear of any lien, pledge or security
interest created hereby, to the Purchase Contract Agent.
SECTION 4.3 Termination Event.
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from the Pledge and
shall promptly Transfer any Pledged Debentures or Pledged Treasury
Consideration, as the case may be, and Pledged Treasury Securities to the
Purchase Contract Agent for the benefit of the Holders of the Normal Units and
the Stripped Units, respectively, free and clear of any lien, pledge or security
interest or other interest created in favor of the Collateral Agent hereby.
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(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 be unable to promptly effectuate the release and Transfer of all Pledged
Debentures, Pledged Treasury Consideration or of the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3, the Purchase
Contract Agent shall
(i) use its best efforts to obtain an opinion of a nationally
recognized law firm reasonably acceptable to the Collateral Agent
to the effect that, as a result of the Company's being the debtor
in such a bankruptcy case, the Collateral Agent will not be
prohibited from releasing or Transferring the Collateral as
provided in this Section 4.3, and shall deliver such opinion to
the Collateral Agent within ten days after the occurrence of such
Termination Event, and if (y) the Purchase Contract Agent shall be
unable to obtain such opinion within ten days after the occurrence
of such Termination Event or (z) the Collateral Agent shall
continue, after delivery of such opinion, to refuse to effectuate
the release and Transfer of all Pledged Debentures, Pledged
Treasury Consideration or Pledged Treasury Securities, as the case
may be, as provided in this Section 4.3, then the Purchase
Contract Agent shall within fifteen days after the occurrence of
such Termination Event commence an action or proceeding in the
court with jurisdiction of the Company's case under the Bankruptcy
Code seeking an order requiring the Collateral Agent to effectuate
the release and transfer of all Pledged Debentures, Pledged
Treasury Consideration or Pledged Treasury Securities, as the case
may be, as provided by this Section 4.3 or
(ii) commence an action or proceeding like that described in subsection
(i)(z) hereof within ten days after the occurrence of such
Termination Event.
SECTION 4.4 Early Settlement; Merger Early Settlement.
Upon written notice to the Collateral Agent by the Purchase Contract
Agent that one or more Holders of Units have elected to effect Early Settlement
or Merger Early Settlement of their respective obligations under the Purchase
Contracts forming a part of such Units in accordance with the terms of the
Purchase Contracts and the Purchase Contract Agreement (setting forth the number
of such Purchase Contracts as to which such Holders have elected to effect Early
Settlement or Merger Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts or Merger Early Settlement
Amounts, as the case may be, pursuant to the terms of the Purchase Contracts and
the Purchase Contract Agreement and that all conditions to such Early Settlement
or Merger Early Settlement, as the case may be, have been satisfied, then the
Collateral Agent shall release from the Pledge (a) Pledged Debentures or Pledged
Treasury Consideration, as the case may be, in the case of a Holder of Normal
Units or (b) Pledged Treasury Securities, in the case of a Holder of Stripped
Units,
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relating to such Purchase Contracts as to which such Holders have elected to
effect Early Settlement or Merger Early Settlement, and shall Transfer all such
Pledged Debentures, Pledged Treasury Consideration or Pledged Treasury
Securities, as the case may be, free and clear of the Pledge to the Collateral
Agent created hereby, to the Purchase Contract Agent for the benefit of the
Holders.
SECTION 4.5 Remarketing; Application of Proceeds; Settlement.
(a) Pursuant to the Purchase Contract Agreement, the Purchase Contract
Agent shall notify, by 10:00 a.m., New York City time, on the third Business Day
preceding the Remarketing Date or any Subsequent Remarketing Date, as the case
may be, the Remarketing Agent and the Collateral Agent of the aggregate
principal amount of Debentures comprising part of Normal Units to be remarketed.
The Collateral Agent shall, by 10:00 a.m., New York City time, on the Business
Day immediately preceding the Remarketing Date or any Subsequent Remarketing
Date, as the case may be, without any instruction from Holders of Normal Units,
deliver (i) the Pledged Debentures to be remarketed to the Remarketing Agent for
remarketing and (ii) the remaining Pledged Debentures to the Purchase Contract
Agent for distribution to the Holders that have elected not to participate in
the remarketing in accordance with the Purchase Contract Agreement. The
Remarketing Agent will deliver the Agent-purchased Treasury Consideration
purchased from the proceeds of the remarketing to the Purchase Contract Agent,
which shall thereupon deliver such Agent-purchased Treasury Consideration to the
Collateral Agent. Upon receipt of the Agent-purchased Treasury Consideration
from the Purchase Contract Agent following a successful remarketing, the
Collateral Agent, for the benefit of the Company, shall thereupon apply such
Treasury Consideration to secure such Holders' obligations under the Purchase
Contracts. On the Stock Purchase Date, the Collateral Agent shall apply that
portion of the payments received in respect of the Pledged Treasury
Consideration equal to the aggregate Stated Amount of the related Normal Units
to satisfy in full the obligations of such Holders of Normal Units to pay the
Purchase Price under the related Purchase Contracts. The remaining portion of
such Proceeds, if any, shall be distributed by the Collateral Agent to the
Purchase Contract Agent for payment to such Holders.
(b) Within three Business Days following a Failed Remarketing, the
Debentures delivered to the Remarketing Agent and the Purchase Contract Agent
pursuant to Section 4.5(a) shall be returned to the Collateral Agent, together
with written notice from the Remarketing Agent of the Failed Remarketing. The
Collateral Agent, for the benefit of the Company, shall thereupon apply such
Debentures to secure the Normal Units Holders' obligations under the Purchase
Contracts. The Remarketing Agent may make one or more attempts to remarket the
Debentures in accordance with the procedures set forth in the Purchase Contract
Agreement and the Remarketing Agreement between the Remarketing Date and the
Stock Purchase Date, provided that the requirements of Section 5.2(b)(ii) of the
Purchase Contract Agreement have been met. If by 4:00 p.m., New York City time,
on the third Business Day immediately preceding the Stock Purchase Date the
Remarketing Agent has failed to remarket the Debentures at 100.5% of
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the Remarketing Value, the Last Failed Remarketing shall be deemed to have
occurred. In this case, the Remarketing Agent shall advise the Collateral Agent
in writing that it cannot remarket the related Pledged Debentures of such
Holders of Normal Units. The Collateral Agent, for the benefit of the Company
will, at the written direction of the Company, deliver or dispose of the Pledged
Debentures in accordance with the Company's written instructions to satisfy in
full, from any such disposition or retention, such Holders' obligations to pay
the Purchase Price for the Common Stock; provided, that if upon the Last Failed
Remarketing, the Collateral Agent delivers or disposes of the Pledged Debentures
in accordance with the written instructions of the Company, any accrued and
unpaid interest on such Debentures through the Stock Purchase Date will become
payable by the Company to the Purchase Contract Agent for payment to the Holder
of the Normal Units to which such Debentures relate in accordance with the
Purchase Contract Agreement.
(c) In the event a Holder of Stripped Units has not made an Early
Settlement or Merger Early Settlement of the Purchase Contracts underlying its
Stripped Units, such Holder shall be deemed to have elected to pay for the
shares of Common Stock to be issued under such Purchase Contracts on the Stock
Purchase Date from the payments received in respect of the related Pledged
Treasury Securities. Without receiving any instruction from any such Holder of
Stripped Units, the Collateral Agent shall apply such payments to the settlement
of such Purchase Contracts on the Stock Purchase Date pursuant to written
instructions from the Purchase Contract Agent. In the event the payments
received in respect of the related Pledged Treasury Securities are in excess of
the aggregate Purchase Price of the Purchase Contracts being settled thereby,
the Collateral Agent shall distribute such excess, when received, to the
Purchase Contract Agent for the benefit of the Holders.
(d) Pursuant to the Remarketing Agreement, on or prior to the fourth
Business Day preceding the Remarketing Date or any Subsequent Remarketing Date,
but no earlier than the Payment Date immediately preceding the Remarketing Date
or the Subsequent Remarketing Date, holders of Separate Debentures may elect to
have their Separate Debentures remarketed by delivering their Separate
Debentures, together with a notice of such election, substantially in the form
of Exhibit C hereto, to the Custodial Agent. On the third Business Day prior to
the Remarketing Date and any Subsequent Remarketing Date, by 10:00 a.m. New York
City time, the Custodial Agent shall notify the Remarketing Agent of the
principal amount of such Separate Debentures to be remarketed. The Custodial
Agent will hold such Separate Debentures in an account separate from the
Collateral Account. A holder of Separate Debentures electing to have its
Separate Debentures remarketed will also have the right to withdraw such
election by written notice to the Custodial Agent, substantially in the form of
Exhibit D hereto, prior to the fifth Business Day immediately preceding the
Remarketing Date and any Subsequent Remarketing Date, upon which notice the
Custodial Agent will return such Separate Debentures to such holder. On the
Business Day immediately preceding the Remarketing Date and any Subsequent
Remarketing Date, the Custodial Agent will deliver to the Remarketing Agent for
remarketing all Separate Debentures delivered to
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the Custodial Agent pursuant to this Section 4.5(d) and not withdrawn pursuant
to the terms hereof prior to such date. The portion of the proceeds from such
remarketing equal to the amount calculated in respect of such Separate
Debentures as set forth in Section 5.2(b) of the Purchase Contract Agreement
will automatically be remitted by the Remarketing Agent to the Custodial Agent
for the benefit of the holders of such Separate Debentures. In addition, after
deducting as the remarketing fee an amount not exceeding 50 basis points (.50%)
of the total proceeds of such remarketing, the Remarketing Agent will remit to
the Custodial Agent the remaining portion of the proceeds, if any, for the
benefit of such holders. If, despite using its commercially reasonable best
efforts, the Remarketing Agent advises the Custodial Agent in writing that there
has been a Failed Remarketing, the Remarketing Agent will promptly return such
Debentures to the Custodial Agent for redelivery to such holders. The Custodial
Agent shall be entitled to rely without further inquiry on any written
instruction received from a holder of Separate Debentures and shall have no
liability with respect thereto. For purposes of this Section 4.5(d), a "holder"
of a Separate Debenture shall mean the Person in whose name such Separate
Debenture is registered on the books of the registrar for the Debentures.
ARTICLE V
VOTING RIGHTS -- DEBENTURES
SECTION 5.1 Exercise by Purchase Contract Agent.
The Purchase Contract Agent may exercise, or refrain from exercising, any
and all voting and other consensual rights pertaining to the Pledged Debentures
or any part thereof for any purpose not inconsistent with the terms of this
Agreement and in accordance with the terms of the Purchase Contract Agreement;
provided, that the Purchase Contract Agent shall not exercise or, as the case
may be, shall not refrain from exercising such right if, in the judgment of the
Company, such action would impair or otherwise have a material adverse effect on
the value of all or any of the Pledged Debentures; and provided, further, that
the Purchase Contract Agent 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
Debentures, including notice of any meeting at which holders of Debentures are
entitled to vote or solicitation of consents, waivers or proxies of holders of
Debentures, the Collateral Agent shall use reasonable efforts to send promptly
to the Purchase Contract Agent such notice or communication, and as soon as
reasonably practicable after receipt of a written request therefor from the
Purchase Contract Agent, execute and deliver to the Purchase Contract Agent such
proxies and other instruments in respect of such Pledged Debentures (in form and
substance satisfactory to the Collateral Agent) as are prepared by the Purchase
Contract Agent with respect to the Pledged Debentures.
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ARTICLE VI
RIGHTS AND REMEDIES; TAX EVENT REDEMPTION
SECTION 6.1 Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies available at law or in equity,
after an event of default hereunder, the Collateral Agent shall have all of the
rights and remedies with respect to the Collateral of a secured party under the
Uniform Commercial Code (or any successor thereto) as in effect in the State of
New York from time to time (the "Code") (whether or not the Code is in effect in
the jurisdiction where the rights and remedies are asserted) and the TRADES
Regulations and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted. Wherever reference is made in this Agreement
to any section of the Code, such reference shall be deemed to include a
reference to any provision of the Code which is a successor to, or amendment of,
such section. Without limiting the generality of the foregoing, such remedies
may include, to the extent permitted by applicable law, (i) retention of the
Pledged Debentures or other Collateral in full satisfaction of the Holders'
obligations under the Purchase Contracts or (ii) sale of the Pledged Debentures
or other Collateral in one or more public or private sales at the written
direction of the Company.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of any Pledged Treasury Consideration
or Pledged Treasury Securities as provided in Article III hereof in satisfaction
of the obligations of the Holder of the Units of which such Pledged Treasury
Consideration or Pledged Treasury Securities, as applicable, is a part under the
related Purchase Contracts, the inability to make such payments shall constitute
an event of default hereunder and the Collateral Agent shall have and may
exercise, with reference to such Pledged Treasury Securities or such Pledged
Treasury Consideration, as applicable, and such obligations of such Holder, any
and all of the rights and remedies available to a secured party under the Code
and the TRADES Regulations after default by a debtor, and as otherwise granted
herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of,
or interest on, the Pledged Debentures, or (ii) the principal amount of the
Pledged Treasury Consideration or Pledged Treasury Securities, subject, in each
case, to the provisions of Article III, and as otherwise granted herein.
(d) The Purchase Contract Agent, individually and as attorney-in-fact for
each Holder of Units, agrees that, from time to time, upon the written request
of the Company or the Collateral Agent (acting upon the written request of the
Company), the Purchase
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Contract Agent or such Holder shall execute and deliver such further documents
and do such other acts and things as may be necessary, including as the Company
or the Collateral Agent (acting upon the written request of the Company) may
reasonably request in order to maintain the Pledge, and the perfection and
priority thereof, and to confirm the rights of the Collateral Agent hereunder.
The Purchase Contract Agent shall have no liability to any Holder for executing
any documents or taking any such acts requested by the Company or the Collateral
Agent (acting upon the written request of the Company) hereunder, except for
liability for its own negligent act, its own negligent failure to act, its bad
faith or its own willful misconduct.
SECTION 6.2 Substitutions.
Whenever a Holder has the right to substitute Treasury Securities,
Debentures or Treasury Consideration, as the case may be, for Collateral held by
the Collateral Agent, such substitution shall not constitute a novation of the
security interest created hereby.
SECTION 6.3 Tax Event Redemption.
Upon the occurrence of a Tax Event Redemption prior to a successful
remarketing of the Debentures pursuant to the Remarketing Agreement, the
aggregate Redemption Price payable on the Tax Event Redemption Date with respect
to the Pledged Debentures shall be delivered to the Collateral Agent by the
Trustee, solely to the extent funds therefor have been received by it from the
Company, on or prior to 12:00 p.m., New York City time, by check or wire
transfer in immediately available funds at such place and at such account as may
be designated by the Collateral Agent in exchange for Pledged Debentures. In the
event the Collateral Agent receives such Redemption Price, the Collateral Agent
will, at the written direction of the Company, apply an amount, out of such
Redemption Price, equal to the aggregate Redemption Amount with respect to the
Pledged Debentures to purchase from the Quotation Agent the Redemption Treasury
Portfolio and promptly remit the remaining portion of such Redemption Price to
the Purchase Contract Agent for payment to the Holders of Normal Units. The
Collateral Agent shall transfer the Redemption Treasury Portfolio to the
Collateral Account in the manner specified herein for Pledged Debentures to
secure the obligation of all Holders of Normal Units to purchase Common Stock of
the Company under the Purchase Contracts constituting a part of such Normal
Units, in substitution for the Pledged Debentures. Thereafter, the Collateral
Agent shall have such security interests, rights and obligations with respect to
the Redemption Treasury Portfolio as it had in respect of the Pledged Debentures
as provided in Articles II, III, IV, V and VI and any reference herein to the
Pledged Debentures shall be deemed to be a reference to such Redemption Treasury
Portfolio, and any reference herein to interest on the Pledged Debentures shall
be deemed to be a reference to distributions on such Redemption Treasury
Portfolio.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.1 Representations and Warranties of the Holders.
The Holders from time to time, acting through the Purchase Contract Agent
as their attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any representation or warranty made by or on behalf of a
Holder), hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each day a Holder
Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and lien on
the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and, in
the case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under Section 2.1;
(c) upon the Transfer of the Collateral to the Collateral Account, the
Collateral Agent, for the benefit of the Company, will have a valid and
perfected first priority security interest therein (assuming that any central
clearing operation or any Intermediary or other entity not within the control of
the Holder involved in the Transfer of the Collateral, including the Collateral
Agent, gives the notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the establishment
and exercise of control pursuant to Section 2.2); and
(d) the execution and performance by the Holder of its obligations under
this Agreement will not result in the creation of any security interest, lien or
other encumbrance on the Collateral other than the security interest and lien
granted under Section 2.1 or violate any provision of any existing law or
regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.
SECTION 7.2 Representations and Warranties of the Collateral Agent,
Custodial Agent and Securities Intermediary.
The Collateral Agent, Custodial Agent and Securities Intermediary (each
an "Agent") hereby represents and warrants:
(a) U S. Bank, N.A. is a national banking association duly organized and
validly existing under the laws of the United States;
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(b) The execution, delivery and performance by the Collateral Agent, the
Custodial Agent and the Securities Intermediary of this Agreement have each been
duly authorized by all necessary corporate action on the part of each such
Agent; this Agreement has been duly executed and delivered by the Collateral
Agent, the Custodial Agent and the Securities Intermediary and constitutes a
valid and legally binding obligation of each of the Agents, enforceable against
such Agents in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
(c) The execution, delivery and performance by the Collateral Agent, the
Custodial Agent and the Securities Intermediary of this Agreement do not violate
or constitute a breach of the Articles of Incorporation or By-Laws of any of
such Agents; and
(d) No consent of any federal or state banking authority is required for
the execution, delivery or performance by the Agents of their respective
obligations under this Agreement.
SECTION 7.3 Covenants.
The Holders from time to time, acting through the Purchase Contract Agent
as their attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any covenant made by or on behalf of a Holder), hereby
covenant to the Collateral Agent that for so long as the Collateral remains
subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other security interest whatsoever over the Collateral or any part of it other
than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the pledge hereunder,
transferred in connection with the Transfer of the Units.
ARTICLE VIII
THE COLLATERAL AGENT
SECTION 8.1 Appointment, Powers and Immunities.
(a) The Collateral Agent shall act as agent for the Company hereunder
with such powers as are specifically vested in the Collateral Agent by the terms
of this
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Agreement, together with such other powers as are reasonably incidental thereto.
Each of the Collateral Agent, the Custodial Agent and the Securities
Intermediary:
(i) shall have no duties or responsibilities except those expressly
set forth in this Agreement and no implied covenants or
obligations shall be inferred from this Agreement against any of
them, nor shall any of them be bound by the provisions of any
agreement by any party hereto beyond the specific terms hereof;
(ii) shall not be responsible for any recitals contained in this
Agreement, or in any certificate or other document referred to or
provided for in, or received by it under, this Agreement, the
Units or the Purchase Contract Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement (other than as against the
Collateral Agent), the Units or the Purchase Contract Agreement or
any other document referred to or provided for herein or therein
or for any failure by the Company or any other Person (except the
Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be) to perform any of its
obligations hereunder or thereunder or for the perfection,
priority or, except as expressly required hereby, existence,
validity, perfection or maintenance of any security interest
created hereunder;
(iii) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder (except in the case of the
Collateral Agent, pursuant to directions furnished under Section
8.2, subject to Section 8.6);
(iv) shall not be responsible for any action taken or omitted to be
taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith or
therewith, except for its own gross negligence, bad faith or
willful misconduct; and
(v) shall not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with
respect to, the Units or other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.
(b) No provision of this Agreement shall require the Collateral Agent,
the Custodial Agent or the Securities Intermediary to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder. In no event shall the Collateral Agent, the Custodial
Agent or the Securities Intermediary be liable for any amount in excess of the
value of the Collateral or for any special, indirect, individual, consequential
damages or lost profits or loss of business, arising in connection with this
Agreement. Notwithstanding the foregoing, the Collateral Agent,
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the Custodial Agent, the Purchase Contract Agent and Securities Intermediary,
each in its individual capacity, hereby waive any right of setoff, bankers lien,
liens or perfection rights as securities intermediary or any counterclaim with
respect to any of the Collateral.
(c) The Collateral Agent, Custodial Agent and Securities Intermediary
shall have no liability whatsoever for the action or inaction of any Clearing
Agency or any book-entry system thereof. In no event shall any Clearing Agency
or any book-entry system thereof be deemed an agent or subcustodian of the
Collateral Agent, Custodial Agent and Securities Intermediary. The Collateral
Agent, Custodial Agent and Securities Intermediary shall not be responsible or
liable for any failure or delay in the performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including, without limitation, acts of God;
earthquakes; fires; floods; 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; governmental actions; or inability to
obtain labor, material, equipment or transportation.
SECTION 8.2 Instructions of the Company.
The Collateral Agent shall not be under any duty or obligation to take
action to effect collection of any amount due on the Pledged Debentures, Pledged
Treasury Consideration or Pledged Treasury Securities in the Collateral Account
whether or not the Collateral upon which such amount is payable is in default,
or if payment is refused after due demand or presentation, unless and until (i)
it shall be directed to take such action by written instructions and (ii) it
shall be assured to its satisfaction of reimbursement of its reasonable costs
and expenses in connection with any such action.
The Company shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, to direct the time, method and
place of conducting any proceeding for the realization of any right or remedy
available to the Collateral Agent, or of exercising any power conferred on the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, or to direct the taking or refraining from taking of any action
authorized by this Agreement; provided, however, that (i) such direction shall
not conflict with the provisions of any law or of this Agreement and (ii) the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall each
receive indemnity reasonably satisfactory to it as provided herein. Nothing in
this Section 8.2 shall impair the right of the Collateral Agent in its
discretion to take any action or omit to take any action which it deems proper
and which is not inconsistent with such direction.
SECTION 8.3 Reliance.
Each of the Securities Intermediary, the Custodial Agent and the
Collateral Agent shall be entitled conclusively to rely upon any certification,
order, judgment, opinion, notice or other communication (including, without
limitation, any thereof by telephone or
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facsimile) reasonably believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons (without being
required to determine the correctness of any fact stated therein), and upon
advice and statements of legal counsel and other experts selected by the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be. It is understood that the Collateral Agent, the Custodial Agent or
the Securities Intermediary and the beneficiary's bank in any funds transfer may
rely solely upon any account numbers or similar identifying number provided by
the other party hereto to identify (i) the beneficiary, (ii) the beneficiary
bank, or (iii) an intermediary bank. The Collateral Agent, the Custodial Agent
or the Securities Intermediary may apply any of the funds for any payment order
it executes using any such identifying number, even where its use may result in
a person other than the beneficiary being paid, or the transfer of funds to a
bank other than the beneficiary's bank, or an intermediary bank designated. As
to any matters not expressly provided for by this Agreement, the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall in all cases be
fully protected in acting, or in refraining from acting, hereunder in accordance
with instructions given by the Company in accordance with this Agreement.
SECTION 8.4 Rights in Other Capacities.
The Collateral Agent, the Custodial Agent and the Securities Intermediary
and their affiliates may (without having to account therefor to the Company)
accept deposits from, lend money to, make their investments in and generally
engage in any kind of banking, trust or other business with the Purchase
Contract Agent, any Holder of Units and any holder of Separate Debentures (and
any of their respective subsidiaries or affiliates) as if it were not acting as
the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, and the Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent, any Holder of Units or any holder of Separate
Debentures without having to account for the same to the Company; provided that
each of the Securities Intermediary, the Custodial Agent and the Collateral
Agent covenants and agrees with the Company that it shall not accept, receive or
permit there to be created in favor of itself (and waives any right of set-off
or banker's lien with respect to) and shall take no affirmative action to permit
there to be created in favor of any other Person, any security interest, lien or
other encumbrance of any kind in or upon the Collateral and the Collateral shall
not be commingled with any other assets of any such Person.
SECTION 8.5 Non-Reliance on Collateral Agent.
None of the Securities Intermediary, the Custodial Agent or the
Collateral Agent shall be required to keep itself informed as to the performance
or observance by the Purchase Contract Agent or any Holder of Units of this
Agreement, the Purchase Contract Agreement, the Units or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Purchase Contract Agent or any
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Holder of Units. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall not have any duty or responsibility to provide the Company or
the Remarketing Agent with any credit or other information concerning the
affairs, financial condition or business of the Purchase Contract Agent, any
Holder of Units or any holder of Separate Debentures (or any of their respective
subsidiaries or affiliates) that may come into the possession of the Collateral
Agent, the Custodial Agent or the Securities Intermediary or any of their
respective affiliates.
SECTION 8.6 Compensation and Indemnity.
The Company agrees:
(a) to pay each of the Collateral Agent, the Custodial Agent and the
Securities Intermediary from time to time such compensation as shall be agreed
in writing between the Company and the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, for all services rendered by each
of them hereunder; and
(b) to indemnify the Collateral Agent, the Custodial Agent and the
Securities Intermediary (which for purposes of this paragraph, in each case,
shall include its directors, officers, employees and agents) for, and to hold
each of them harmless from and against, any loss, liability or reasonable
out-of-pocket expense incurred without gross negligence, willful misconduct or
bad faith on its part, arising out of or in connection with the acceptance or
administration of its powers and duties under this Agreement, including the
reasonable out-of-pocket costs and expenses (including reasonable fees and
expenses of counsel) of defending itself against any claim or liability in
connection with the exercise or performance of such powers and duties or
collecting such amounts. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall each promptly notify the Company of any third
party claim which may give rise to the indemnity hereunder and give the Company
the opportunity to participate in the defense of such claim with counsel
reasonably satisfactory to the indemnified party (provided, however, that if
there shall exist a conflict of interest between the Company on the one hand,
and the Collateral Agent, the Custodial Agent or the Securities Intermediary on
the other hand, in the conduct of any such defense which makes it impracticable
for a single counsel to represent the Company and the Collateral Agent, the
Custodial Agent or the Securities Intermediary, then the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may be, shall have
the right to select separate counsel to participate in the defense of such
claim), and no such claim shall be settled without the written consent of the
Company, which consent shall not be unreasonably withheld.
SECTION 8.7 Failure to Act.
In the event of any ambiguity in the provisions of this Agreement or any
dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent, Custodial Agent and the Securities Intermediary shall be
entitled, after prompt notice to the Company and the Purchase Contract Agent, at
its sole option, to refuse to comply with
-22-
any and all claims, demands or instructions with respect to such property or
funds so long as such dispute or conflict shall continue, and neither the
Collateral Agent, Custodial Agent nor the Securities Intermediary shall be or
become liable in any way to any of the parties hereto for its failure or refusal
to comply with such conflicting claims, demands or instructions. The Collateral
Agent, Custodial Agent and the Securities Intermediary shall be entitled to
refuse to act until either (i) such conflicting or adverse claims or demands
shall have been finally determined by a court of competent jurisdiction or
settled by agreement between the conflicting parties as evidenced in a writing,
reasonably satisfactory to the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, or (ii) the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may be, shall have
received security or an indemnity reasonably satisfactory to the Collateral
Agent, Custodial Agent or the Securities Intermediary, as the case may be,
sufficient to save the Collateral Agent, Custodial Agent or the Securities
Intermediary, as the case may be, harmless from and against any and all loss,
liability or reasonable out-of-pocket expense which the Collateral Agent,
Custodial Agent or the Securities Intermediary, as the case may be, may incur by
reason of its acting without bad faith, willful misconduct or gross negligence.
The Collateral Agent, Custodial Agent or the Securities Intermediary may in
addition elect to commence an interpleader action or seek other judicial relief
or orders as the Collateral Agent, Custodial Agent or the Securities
Intermediary, as the case may be, may deem necessary. Notwithstanding anything
contained herein to the contrary, neither the Collateral Agent, Custodial Agent
nor the Securities Intermediary shall be required to take any action that is in
its opinion contrary to law or to the terms of this Agreement, or which would in
its opinion subject it or any of its officers, employees or directors to
liability.
SECTION 8.8 Resignation.
Subject to the appointment and acceptance of a successor Collateral
Agent, Custodial Agent or Securities Intermediary, as provided below, (a) the
Collateral Agent, Custodial Agent and the Securities Intermediary may resign at
any time by giving notice thereof to the Company and the Purchase Contract Agent
as attorney-in-fact for the Holders of Units, (b) the Collateral Agent,
Custodial Agent and the Securities Intermediary may be removed at any time by
the Company and (c) if the Collateral Agent, Custodial Agent or the Securities
Intermediary fails to perform any of its material obligations hereunder in any
material respect for a period of not less than 40 days after receiving written
notice of such failure by the Purchase Contract Agent and such failure shall be
continuing, the Collateral Agent, Custodial Agent or the Securities Intermediary
may be removed by the Purchase Contract Agent. The Purchase Contract Agent shall
promptly notify the Company of any removal of the Collateral Agent, the
Custodial Agent or the Securities Intermediary pursuant to clause (c) of the
immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be. If no successor Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's, Custodial Agent's
-23-
or Securities Intermediary's giving of notice of resignation or such removal,
then the retiring Collateral Agent, Custodial Agent or Securities Intermediary,
as the case may be, may at the Company's expense petition any court of competent
jurisdiction for the appointment of a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be. Upon removal of the
Collateral Agent, Custodial Agent or Securities Intermediary, no fees paid to
the retiring Collateral Agent, Custodial Agent or Securities Intermediary
pursuant to Section 8.6(a) of this Agreement shall be refunded. Each of the
Collateral Agent, Custodial Agent and the Securities Intermediary shall be a
bank which has an office in New York, New York with a combined capital and
surplus of at least $50,000,000. Upon the acceptance of any appointment as
Collateral Agent, Custodial Agent or Securities Intermediary, as the case may
be, hereunder by a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, such successor shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent, Custodial Agent or Securities Intermediary, as the case may
be, and the retiring Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, shall take all appropriate action to transfer
any money and property held by it hereunder (including the Collateral) to such
successor. The retiring Collateral Agent, Custodial Agent or Securities
Intermediary shall, upon such succession, be discharged from its duties and
obligations as Collateral Agent, Custodial Agent or Securities Intermediary
hereunder. After any retiring Collateral Agent's, Custodial Agent's or
Securities Intermediary's resignation hereunder as Collateral Agent, Custodial
Agent or Securities Intermediary, the provisions of this Section 8.8 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Collateral Agent, Custodial Agent or
Securities Intermediary. Any resignation or removal of the Collateral Agent
hereunder shall be deemed for all purposes of this Agreement as the simultaneous
resignation or removal of the Custodial Agent and the Securities Intermediary
hereunder.
Any corporation into which the Collateral Agent, the Custodial Agent or
the Securities Intermediary, in its individual capacity, may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Collateral Agent in
its individual capacity shall be a party, or any corporation to which
substantially all the corporate trust business of the Collateral Agent in its
individual capacity may be transferred, shall be the Collateral Agent, the
Custodial Agent, or the Securities Intermediary, as the case may be,
respectively, under this Agreement without further act.
SECTION 8.9 Right to Appoint Agent or Advisor.
The Collateral Agent shall have the right to appoint agents or advisors
in connection with any of its duties hereunder, and the Collateral Agent shall
not be liable for any action taken or omitted by, or in reliance upon the advice
of, such agents or advisors selected in good faith. The appointment of agents
(other than legal counsel) pursuant to this Section 8.9 shall be subject to
prior consent of the Company, which consent shall not be unreasonably withheld.
-24-
SECTION 8.10 Survival.
The provisions of this Article VIII shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent, the Custodial
Agent or the Securities Intermediary.
SECTION 8.11 Exculpation.
Anything in this Agreement to the contrary notwithstanding, in no event
shall any of the Collateral Agent, the Custodial Agent or the Securities
Intermediary or their officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Collateral Agent, the
Custodial Agent or the Securities Intermediary, or any of them, incurred without
any act or deed that is found to be attributable to negligence, bad faith or
willful misconduct on the part of the Collateral Agent, the Custodial Agent or
the Securities Intermediary.
ARTICLE IX
AMENDMENT
SECTION 9.1 Amendment Without Consent of Holders.
Without the consent of any Holders or the holders of any Separate
Debentures, the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, at any time and from
time to time, may amend this Agreement, in form satisfactory to the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, for any of the following purposes:
(i) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the
Company; or
(ii) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon
the Company so long as such covenants or such surrender do not
adversely affect the validity, perfection or priority of the
security interests granted or created hereunder; or
(iii) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary
or Purchase Contract Agent; or
-25-
(iv) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other such provisions
herein, or to make any other provisions with respect to such
matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
SECTION 9.2 Amendment with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of said Holders delivered to
the Company, the Purchase Contract Agent or the Collateral Agent, as the case
may be, the Company, when duly authorized, the Purchase Contract Agent, the
Collateral Agent, the Custodial Agent and the Securities Intermediary may amend
this Agreement for the purpose of modifying in any manner the provisions of this
Agreement or the rights of the Holders in respect of the Units; provided,
however, that no such supplemental agreement shall, without the consent of the
Holder of each Outstanding Unit adversely affected thereby,
(i) change the amount or type of Collateral underlying a Unit (except
for the rights of holders of Normal Units to substitute the
Treasury Securities for the Pledged Debentures or the Pledged
Treasury Consideration, as the case may be, or the rights of
Holders of Stripped Units to substitute Debentures or the
appropriate Treasury Consideration, as applicable, for the Pledged
Treasury Securities), impair the right of the Holder of any Unit
to receive distributions on the underlying Collateral or otherwise
adversely affect the Holder's rights in or to such Collateral; or
(ii) otherwise effect any action that would require the consent of the
Holder of each Outstanding Unit affected thereby pursuant to the
Purchase Contract Agreement if such action were effected by an
agreement supplemental thereto; or
(iii) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
SECTION 9.3 Execution of Amendments.
In executing any amendment permitted by this Section, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent shall receive and (subject to Section 6.1 hereof, with respect to
the Collateral Agent, and Section 7.1 of the Purchase Contract Agreement, with
respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all
-26-
conditions precedent, if any, to the execution and delivery of such amendment
have been satisfied and, in the case of an amendment pursuant to Section 9.1,
that such amendment does not adversely affect the validity, perfection or
priority of the security interests granted or created hereunder.
SECTION 9.4 Effect of Amendments.
Upon the execution of any amendment under this Article IX, this Agreement
shall be modified in accordance therewith, and such amendment shall form a part
of this Agreement for all purposes; and every Holder of Certificates theretofore
or thereafter authenticated, executed on behalf of the Holders and delivered
under the Purchase Contract Agreement shall be bound thereby.
SECTION 9.5 Reference to Amendments.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any amendment pursuant to this Section may, and
shall if required by the Collateral Agent or the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent 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 Purchase Contract
Agent and the Company, to any such amendment may be prepared and executed by the
Company and authenticated, executed on behalf of the Holders and delivered by
the Purchase Contract Agent in accordance with the Purchase Contract Agreement
in exchange for outstanding Certificates.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 No Waiver.
No failure on the part of any party hereto or any of its agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by any party hereto or any of its agents of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
are cumulative and are not exclusive of any remedies provided by law.
SECTION 10.2 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. Without limiting the foregoing, the above choice
of law is expressly agreed to by the Securities Intermediary, the Collateral
Agent, the Custodial Agent and the Holders from time to time acting through the
Purchase Contract Agent, as their attorney-in-fact, in connection
-27-
with the establishment and maintenance of the Collateral Account, which law, for
purposes of the Code, shall be deemed to be the law governing all Security
Entitlements related thereto. In addition, such parties agree that, for purposes
of the Code, New York shall be the Securities Intermediary's jurisdiction. The
Company, the Collateral Agent and the Holders from time to time of the Units,
acting through the Purchase Contract Agent as their attorney-in-fact, hereby
submit to the nonexclusive jurisdiction of the United States District Court for
the Southern District of New York and of any New York state court sitting in the
Borough of Manhattan in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Company, the Collateral Agent and the Holders from time to time of
the Units, acting through the Purchase Contract Agent as their attorney-in-fact,
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
SECTION 10.3 Notices.
Unless otherwise stated herein, all notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when personally delivered or, in the case of a mailed notice or
notice transmitted by telecopier, upon receipt, in each case given or addressed
as aforesaid.
SECTION 10.4 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
and the Holders from time to time of the Units, by their acceptance of the same,
shall be deemed to have agreed to be bound by the provisions hereof and to have
ratified the agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.
SECTION 10.5 Counterparts.
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
-28-
SECTION 10.6 Severability.
If any provision hereof is invalid and unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7 Expenses, Etc.
The Company agrees to reimburse the Collateral Agent, the Securities
Intermediary and the Custodial Agent for:
(a) all reasonable out-of-pocket costs and all reasonable expenses of the
Collateral Agent, the Custodial Agent and the Securities Intermediary
(including, without limitation, the reasonable fees and expenses of counsel to
the Collateral Agent, the Custodial Agent and the Securities Intermediary), in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver of
any of the terms of this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent (which for
purposes of this paragraph shall include its directors, officers, employees and
agents) (including, without limitation, reasonable fees and expenses of counsel)
in connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Units to satisfy its obligations under the
Purchase Contracts forming a part of the Units and (ii) the enforcement of this
Section 10.7; and
(c) all transfer, stamp, documentary or other similar taxes, assessments
or charges levied by any governmental or revenue authority in respect of this
Agreement or any other document referred to herein and all costs, expenses,
taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated
hereby.
SECTION 10.8 Security Interest Absolute.
All rights of the Collateral Agent and security interests hereunder, and
all obligations of the Holders from time to time hereunder, shall be absolute
and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Units or any other agreement or instrument relating
thereto;
(b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of Units under the related Purchase Contracts, or any other amendment or
waiver of any term of,
-29-
or any consent to any departure from any requirement of, the Purchase Contract
Agreement or any Purchase Contract or any other agreement or instrument relating
thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
SECTION 10.9 Waiver of Jury Trial.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
-30-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SOLECTRON CORPORATION
By: /s/ Xxxxx Xxxxx
------------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President, Chief
Financial Officer (Principal
Financial and Accounting Officer)
Address for Notices:
SOLECTRON CORPORATION
000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention:____________
Telecopy: (408)
Telephone: (000) 000-0000
STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., as
Purchase Contract Agent and as
attorney-in-fact of the Holders
from time to time of the Units
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Address for Notices:
State Street Bank and Trust Company of
California, N.A.
000 Xxxx 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Corporate Trust Administration
(Solectron Corporation 2001 Pledge Agreement)
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
-31-
U S. BANK, N.A., as Collateral Agent,
Custodial Agent and Securities Intermediary
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title:
Address for Notices:
U.S. Bank, N.A.
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Corporate Trust Services/Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
-32-
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT
AGENT TO COLLATERAL AGENT
U.S. Bank, N.A.
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Corporate Trust Services/Xxxxx Xxxxxx
Telephone: 000.000.0000
Facsimile: 651.244.0711
Re: Equity Security Units of Solectron Corporation (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the Pledge
Agreement, dated as of December 27, 2001, (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Normal Units] [Stripped Units] from time to time, that the
holder of Units listed below (the "Holder") has elected to substitute [$_____
aggregate principal amount of Treasury Securities (CUSIP No. _____)] [$_______
aggregate principal amount of Debentures or $_____ aggregate principal amount of
Treasury Consideration (CUSIP No. _____)] in exchange for the related [Pledged
Debentures or Pledged Treasury Consideration] [Pledged Treasury Securities] held
by you in accordance with the Pledge Agreement and has delivered to us a notice
stating that the Holder has Transferred [Treasury Securities] [Debentures or the
Treasury Consideration] to you, as Collateral Agent. We hereby instruct you,
upon receipt of such [Pledged Treasury Securities] [Pledged Debentures or
Pledged Treasury Consideration], to release the [Debentures or the Treasury
Consideration] [Treasury Securities] related to such [Normal Units] [Stripped
Units] to us in accordance with the Holder's instructions. Capitalized terms
used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Date: _____________________
By: ______________________
Name:
Title:
A-1
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Debentures or Treasury Consideration] for the [Pledged
Debentures or the Pledged Treasury Consideration] [Pledged Treasury Securities]:
Name: Social Security or other Taxpayer
Identification Number, if any:
Address:
A-2
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
State Street Bank and
Trust Company of California, N.A.
000 Xxxx 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Corporate Trust Administration
(Solectron Corporation 2001 Pledge Agreement)
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Re: Equity Security Units of Solectron Corporation (the "Company")
The undersigned Holder hereby notifies you that it has delivered to U S.
Bank N.A., as Collateral Agent, [$_______ aggregate principal amount of Treasury
Securities (CUSIP No. _____)] [$_______ aggregate principal amount of Debentures
or $_____ principal amount of Treasury Consideration (CUSIP No. _____)] in
exchange for the related [Pledged Debentures or Pledged Treasury Consideration]
[Pledged Treasury Securities] held by the Collateral Agent, in accordance with
Section 4.1 of the Pledge Agreement, dated as of December 27, 2001 (the "Pledge
Agreement"), between you, the Company and the Collateral Agent. The undersigned
Holder hereby instructs you to instruct the Collateral Agent to release to you
on behalf of the undersigned Holder the [Pledged Debentures or the Pledged
Treasury Consideration] [Pledged Treasury Securities] related to such [Normal
Units] [Stripped Units]. Capitalized terms used herein but not defined shall
have the meaning set forth in the Pledge Agreement.
Date: ___________________ Signature:_________________________________
Signature Guarantee: _____________________
B-1
Please print name and address of Registered Holder:
Name: Social Security or other Taxpayer
Identification Number, if any:
Address:
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-2
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
U.S. Bank, N.A.
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Corporate Trust Services/Xxxxx Xxxxxx
Re: Debentures of Solectron Corporation (the "Company")
The undersigned hereby notifies you in accordance with Section 4.5(d) of
the Pledge Agreement, dated as of December 27, 2001 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and State Street Bank and Trust Company of California, N.A., as
Purchase Contract Agent and as attorney-in-fact for the Holders of Normal Units
and Stripped Units from time to time, that the undersigned elects to deliver on
the fourth Business Day immediately preceding the Remarketing Date or any
Subsequent Remarketing Date $__________ aggregate principal amount of Separate
Debentures for delivery to the Remarketing Agent for remarketing pursuant to
Section 4.5(d) of the Pledge Agreement. The undersigned will, upon request of
the Remarketing Agent, execute and deliver any additional documents deemed by
the Remarketing Agent or by the Company to be necessary or desirable to complete
the sale, assignment and transfer of the Debentures tendered hereby.
The undersigned hereby instructs you, upon receipt of the proceeds of
such remarketing from the Remarketing Agent, net of amounts payable to the
Remarketing Agent in accordance with the Pledge Agreement, to deliver such
proceeds to the undersigned in accordance with the instructions indicated herein
under "A. Payment Instructions." The undersigned hereby instructs you, in the
event of a Failed Remarketing, upon receipt of the Debentures tendered herewith
from the Remarketing Agent, to be delivered to the person(s) and the address(es)
indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and warrants that
the undersigned has full power and authority to tender, sell, assign and
transfer the Debentures tendered hereby and that the undersigned is the record
owner of any Debentures tendered herewith in physical form or a participant in
The Depositary Trust Company ("DTC") and the beneficial owner of any Debentures
tendered herewith by book-entry transfer to your account at DTC and (ii) agrees
to be bound by the terms
C-1
and conditions of Section 4.5(d) of the Pledge Agreement. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.
Date: _______________
Signature:__________________________
Signature Guarantee:
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Name: ________________________________
(Please Print)
Address: ________________________________
(Please Print)
Country:
Zip Code:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Tax Identification or Social Security Number):
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)
C-2
Zip Code:
Country:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Tax Identification or Social Security Number):
C-3
B. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Debentures 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:
Country:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Tax Identification or Social Security Number):
In the event of a Failed Remarketing, Debentures which are in book-entry form
should be credited to the account at The Depository Trust Company set forth
below.
Name of Account Party: DTC Account Number:
C-4
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
U.S. Bank, N.A.
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Corporate Trust Services/Xxxxx Xxxxxx
Attention: ____________________
Telecopy: ___________________
Telephone: __________________
Re: Debentures of Solectron Corporation (the "Company")
The undersigned hereby notifies you in accordance with Section 4.5(d) of
the Pledge Agreement, dated as of December 27, 2001 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and State Street Bank and Trust Company of California, N.A., as
Purchase Contract Agent and as attorney-in-fact for the Holders of Normal Units
and Stripped Units from time to time, that the undersigned elects to withdraw
the $_____ aggregate principal amount of Debentures delivered to the Custodial
Agent on ___________, 2004 for remarketing pursuant to Section 4.5(d) of the
Pledge Agreement. The undersigned hereby instructs you to return such Debentures
to the undersigned in accordance with the undersigned's instructions. With this
notice, the Undersigned hereby agrees to be bound by the terms and conditions of
Section 4.5(d) of the Pledge Agreement. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Date: _______________
Signature:__________________________
Signature Guarantee:
Name(s): ________________________________
(Please Print)
Address: ________________________________
(Please Print)
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Zip Code:
Country:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Tax Identification or Social Security Number):
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Debentures 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:
Country:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Tax Identification or Social Security Number):
In the event of a Failed Remarketing, Debentures which are in book-entry form
should be credited to the account at The Depository Trust Company set forth
below.
Name of Account Party: DTC Account Number:
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