EXHIBIT 0.X
XX XXXX XXXXXXXXXXX,
XXX XXXX XX XXX XXXX,
AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
JPMORGAN CHASE BANK
AS PURCHASE CONTRACT AGENT AND ATTORNEY-IN-FACT
OF THE HOLDERS FROM TIME TO TIME OF THE
EQUITY SECURITY UNITS AND STRIPPED UNITS
PLEDGE AGREEMENT
DATED AS OF JUNE 26, 2002
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions..........................................................2
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
SECTION 2.1 The Pledge...........................................................4
SECTION 2.2 Control and Perfection...............................................5
ARTICLE III
PAYMENTS ON PLEDGED COLLATERAL
SECTION 3.1 Payments.............................................................8
SECTION 3.2 Application of Payments..............................................9
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES
SECTION 4.1 Collateral Substitution and the Creation of Stripped Units...........9
SECTION 4.2 The Recreation of Equity Security Units.............................11
SECTION 4.3 Termination Event...................................................12
SECTION 4.4 Early Settlement; Merger Early Settlement; Cash Settlement..........12
SECTION 4.5 Remarketing; Application of Proceeds; Settlement....................13
ARTICLE V
VOTING RIGHTS -- NOTES
SECTION 5.1 Exercise by Purchase Contract Agent.................................15
ARTICLE VI
RIGHTS AND REMEDIES; TAX EVENT REDEMPTION
SECTION 6.1 Rights and Remedies of the Collateral Agent.........................16
SECTION 6.2 Substitutions.......................................................17
SECTION 6.3 Tax Event Redemption................................................17
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.1 Representations and Warranties......................................18
SECTION 7.2 Covenants...........................................................19
ARTICLE VIII
THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES INTERMEDIARY
SECTION 8.1 Appointment, Powers and Immunities..................................19
SECTION 8.2 Instructions of the Company.........................................21
SECTION 8.3 Reliance............................................................21
SECTION 8.4 Rights in Other Capacities..........................................21
SECTION 8.5 Non-Reliance on Collateral Agent....................................22
SECTION 8.6 Compensation and Indemnity..........................................22
SECTION 8.7 Failure to Act......................................................23
SECTION 8.8 Resignation.........................................................24
SECTION 8.9 Right to Appoint Agent or Advisor...................................25
SECTION 8.10 Survival............................................................25
SECTION 8.11 Exculpation.........................................................26
ARTICLE IX
AMENDMENT
SECTION 9.1 Amendment Without Consent of Holders................................26
SECTION 9.2 Amendment with Consent of Holders...................................26
SECTION 9.3 Execution of Amendments.............................................27
SECTION 9.4 Effect of Amendments................................................27
SECTION 9.5 Reference to Amendments.............................................28
ARTICLE X
MISCELLANEOUS
SECTION 10.1 No Waiver..........................................................28
SECTION 10.2 Governing Law; Submission to Jurisdiction..........................28
SECTION 10.3 Notices............................................................29
SECTION 10.4 Successors and Assigns.............................................29
SECTION 10.5 Counterparts.......................................................29
SECTION 10.6 Severability.......................................................29
SECTION 10.7 Expenses, Etc......................................................30
SECTION 10.8 Security Interest Absolute.........................................30
SECTION 10.9 Waiver of Jury Trial...............................................31
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EXHIBITS
Exhibit A Instruction from Purchase Contract Agent to Collateral Agent
Regarding Creation of Stripped Units or Recreation of Equity
Security Units
Exhibit B Instruction from Holder to Purchase Contract Agent Regarding
Creation of Stripped Units or Recreation of Equity Security
Units
Exhibit C Instruction from Holder of Separate Notes to Custodial Agent
Regarding Remarketing
Exhibit D Instruction from Holder of Separate Notes to Custodial Agent
Regarding Withdrawal from Remarketing
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of June 26, 2002 (this "Agreement"), among El
Paso Corporation, a Delaware corporation (the "Company"), The Bank of New York,
a New York banking corporation, not individually but solely as collateral agent
(in such capacity, together with its successors in such capacity, the
"Collateral Agent"), as custodial agent (in such capacity, together with its
successors in such capacity, the "Custodial Agent") and as "securities
intermediary" as defined in Section 8-102(a)(14) of the Code (as defined herein)
(in such capacity, together with its successors in such capacity, the
"Securities Intermediary"), and JPMorgan Chase Bank, a New York banking
corporation, not individually but solely as purchase contract agent (in such
capacity, together with its successors in such capacity, the "Purchase Contract
Agent") and as attorney-in-fact of the Holders from time to time of the Equity
Security Units and Stripped Units 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 10,000,000 Equity Security
Units of the Company (up to 11,500,000 Equity Security Units if the
over-allotment option of the Underwriters (as defined in the Underwriting
Agreement) is exercised pursuant to the Underwriting Agreement), each having a
Stated Amount of $50.
WHEREAS, each Equity Security Unit will be comprised of (a) a Purchase
Contract and (b) either beneficial ownership of (i) a Note, (ii) following the
successful remarketing of the Notes in accordance with the Purchase Contract
Agreement and the Remarketing Agreement, the Treasury Consideration or (iii)
following a Tax Event Redemption in accordance with the Purchase Contract
Agreement, an Applicable Ownership Interest in the Treasury Portfolio.
WHEREAS, in accordance with the terms of the Purchase Contract
Agreement, a Holder of Equity Security Units may withdraw the Notes from the
related Purchase Contracts by substituting for such Notes Treasury Securities
that will pay in the aggregate an amount equal to the amount due on the Stock
Purchase Date under such Purchase Contracts. Upon such substitution, the Equity
Security Units will become Stripped Units. Each Stripped Unit will be comprised
of (a) a Purchase Contract and (b) a 1/20 undivided beneficial interest in a
Treasury Security.
WHEREAS, pursuant to the terms of the Purchase Contract Agreement and
the Purchase Contracts, the Holders, from time to time, of the Equity Security
Units and Stripped Units have irrevocably authorized the Purchase Contract
Agent, as attorney-in-fact of such Holders, among other things, to execute and
deliver this Agreement on behalf of such Holders and to grant the pledge
provided hereby of the Notes, any Treasury Consideration, any Applicable
Ownership Interests in the Treasury Portfolio and any
Treasury Securities to secure each Holder's obligations under the related
Purchase Contracts, as provided herein and subject to the terms hereof.
NOW, THEREFORE, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own
behalf and as attorney-in-fact of the Holders from time to time of the Equity
Security Units and Stripped Units, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) capitalized terms used but not defined herein are used as defined in
the Purchase Contract Agreement;
(b) the defined terms in this Agreement have the meanings assigned to
them in this Article and include the plural as well as the singular; and
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Code" has the meaning specified in Section 6.1(a) hereof.
"Collateral" has the meaning specified in Section 2.1(a) hereof.
"Collateral Account" means the securities account (number 188353)
maintained at The Bank of New York in the name "JPMorgan Chase Bank, a New York
banking corporation, as Purchase Contract Agent on behalf of the holders of
certain securities of El Paso Corporation, Collateral Account subject to the
Pledge in favor of El Paso Corporation, as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this Agreement.
"Collateral Substitution" has the meaning specified in Section 4.1(a)
hereof.
"Company" means the Person named as the "Company" in the first paragraph
of this Agreement until a successor shall have become such pursuant to the
applicable
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provisions of the Purchase Contract Agreement, and thereafter "Company" shall
mean such successor.
"Custodial Agent" has the meaning specified in the first paragraph of
this Agreement.
"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(c) hereof.
"Pledged Applicable Ownership Interests in the Treasury Portfolio" has
the meaning specified in Section 2.1(c) hereof.
"Pledged Notes" has the meaning specified in Section 2.1(c) hereof.
"Pledged Treasury Consideration" has the meaning specified in Section
2.1(c) hereof.
"Pledged Treasury Securities" has the meaning specified in Section
2.1(c) hereof.
"Proceeds" has the meaning specified in Section 9-102(a)(64) of the
Code, including, without limitation, 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 specified in Section 8-102(a)(17)
of the Code.
"Separate Notes" means any Notes that are not Pledged Notes.
"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:
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(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, delivery by causing a "securities
intermediary" (as defined in Section 8-102(a)(14) of the Code) to (a)
credit a Security Entitlement 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 Consideration, Applicable Ownership Interests in the Treasury
Portfolio and Treasury Securities 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 continuing first priority perfected security interest in, and lien
upon and right of set off against, all of the right, title and interest of the
Purchase Contract Agent and such Holders in and to:
(i) (A) the Notes, Treasury Consideration, Applicable Ownership
Interests in the Treasury Portfolio and Treasury Securities constituting
a part of the Equity Security Units or Stripped Units, (B) any Treasury
Securities delivered in exchange for any Notes in accordance with
Section 4.1 hereof, and (C) any Notes delivered in exchange for any
Treasury Securities in accordance with Section 4.2 hereof, in each case
that have been Transferred to or otherwise received by the Collateral
Agent and not released by the Collateral Agent to such Holders under the
provisions of this Agreement;
(ii) the Collateral Account and all securities, financial
assets, security entitlements, cash and other property credited thereto
and all Security Entitlements related thereto; and
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(iii) all Proceeds of the foregoing (all of the foregoing,
collectively, the "Collateral").
(b) Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Equity Security Units, shall cause the Notes comprising a part of the Equity
Security Units to be Transferred to the Collateral Agent for the benefit of the
Company, for credit to the Collateral Account and the Securities Intermediary
shall indicate by book-entry that a Securities Entitlement to such Notes has
been credited to the Collateral Account.
(c) The pledge provided in this Section 2.1 is herein referred to as the
"Pledge" and the Notes (or the Notes that are delivered pursuant to Section 4.2
hereof), Treasury Consideration, Applicable Ownership Interests in the Treasury
Portfolio or Treasury Securities subject to the Pledge, excluding any Notes or
Treasury Securities released from the Pledge as provided in Sections 4.1, 4.2
and 4.3 hereof, respectively, are herein referred to as "Pledged Notes,"
"Pledged Treasury Consideration," "Pledged Applicable Ownership Interests in the
Treasury Portfolio" or "Pledged Treasury Securities" respectively. Subject to
the Pledge and 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
in its name the Notes or any other securities held in physical form.
(d) Except as may be required in order to release Notes in connection
with a Tax Event Redemption or with a Holder's election to create Stripped Units
from Equity Security Units, or except as otherwise required to release Notes as
specified herein, neither the Collateral Agent nor the Securities Intermediary
shall relinquish physical possession of any certificate evidencing a Note prior
to the termination of this Agreement. If it becomes necessary for the Securities
Intermediary to relinquish physical possession of a certificate in order to
release a portion of the Notes evidenced thereby from the Pledge, the Company or
the Purchase Contract Agent shall use its commercially reasonable best efforts
to arrange for the Securities Intermediary to obtain physical possession of a
replacement certificate evidencing any Notes remaining subject to the Pledge
hereunder registered to the Securities Intermediary or endorsed in blank within
fifteen days of the date the Securities Intermediary relinquished possession.
The Securities Intermediary shall promptly notify the Company and the Collateral
Agent of the Securities Intermediary's failure to obtain possession of any such
replacement certificate as required hereby.
SECTION 2.2 Control and Perfection.
(a) In connection with the Pledge granted in Section 2.1, and subject to
the other provisions of this Agreement, the Holders from time to time acting
through the Purchase
5
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 with respect to the Collateral Account, the Collateral credited
thereto and any Security Entitlements with respect thereto. 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. Instructions and entitlement orders
may, without limitation, direct the Securities Intermediary to transfer, redeem,
assign, or otherwise deliver the Notes, the Treasury Consideration, the
Applicable Ownership Interests in the Treasury Portfolio, 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 itself, as agent
of the Company, to issue instructions and entitlement orders, and to otherwise
take action, with respect to the Collateral Account, the Collateral credited
thereto and any Security Entitlements with respect thereto, pursuant to the
terms and provisions hereof, all without the necessity of obtaining the further
consent of the Purchase Contract Agent or any of the Holders. The Collateral
Agent shall be the agent of the Company and shall act only in accordance with
the terms hereof. Without limiting the generality of the foregoing, the
Collateral Agent shall issue entitlement orders to the Securities Intermediary
as directed in writing by the Company.
(b) The Securities Intermediary hereby confirms and agrees that:
(i) all securities or other property underlying any financial
assets credited to the Collateral Account shall be registered in the
name of the Securities Intermediary, or its nominee, endorsed to the
Securities Intermediary, or its nominee, or in blank 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 as such,
the Company or any Holder, payable to the order of, or specially
endorsed to, the Purchase Contract Agent, the Collateral Agent as such,
the Company or any Holder except to the extent the foregoing have been
specially endorsed to the Securities Intermediary or in blank;
(ii) all property delivered to the Securities Intermediary
pursuant to this Agreement (including, without limitation, any Notes,
Treasury Consideration, Applicable Ownership Interests in the Treasury
Portfolio or Treasury Securities) will be promptly credited to the
Collateral Account;
(iii) the Collateral Account is an account to which financial
assets are or may be credited, and the Securities Intermediary shall,
subject to the terms of this Agreement, comply with entitlement orders
originated by the Collateral
6
Agent on behalf of the Company without further consent by the Purchase
Contract Agent;
(iv) the Securities Intermediary has not entered into, and until
the termination of this Agreement will not enter into, any agreement
with any other Person relating to the Collateral Account and/or any
financial assets credited thereto pursuant to which it has agreed to
comply with entitlement orders (as defined in Section 8-102(a)(8) of the
Code) of such other Person;
(v) the Securities Intermediary has not entered into, and until
the termination of this Agreement will not enter into, any agreement
with the Company, the Collateral Agent or the Purchase Contract Agent
purporting to limit or condition the obligation of the Securities
Intermediary to comply with entitlement orders as set forth in this
Section 2.2;
(vi) each item of property (whether investment property,
financial asset, security, instrument or cash) credited to the
Collateral Account shall be treated as a "financial asset" within the
meaning of Section 8-102(a)(9) of the Code; and
(vii) in the event of any conflict between this Agreement (or
any portion thereof) and any other agreement now existing or hereafter
entered into, the terms of this Agreement shall prevail.
(c) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorney-in-fact to take on behalf of, and in
the name, place and stead of, the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such
power-of-attorney shall not be 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.
(d) The Purchase Contract Agent shall file with the Internal Revenue
Service and deliver to the Holders Forms 1099 (or successor or comparable
forms), to the extent required by law, with respect to payments to the Holders.
Neither the Securities Intermediary nor the Collateral Agent shall have any tax
reporting duties hereunder.
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ARTICLE III
PAYMENTS ON PLEDGED COLLATERAL
SECTION 3.1 Payments.
So long as the Purchase Contract Agent is the registered owner of the
Pledged Notes, Pledged Treasury Consideration, Pledged Applicable Ownership
Interests in the Treasury Portfolio or Pledged Treasury Securities, it shall
receive all payments thereon, but nevertheless subject to the Pledge thereof
pursuant to Section 2.1 hereof. If the Pledged Notes are reregistered, such that
the Collateral Agent becomes the registered holder, all payments of the
principal of, or interest or other amounts on, the Pledged Notes and all
payments of the principal of, or cash distributions on, any Pledged Treasury
Consideration, Pledged Applicable Ownership Interests in the Treasury Portfolio
or 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) any interest payments with respect to the
Pledged Notes, the Pledged Treasury Consideration (as specified in
clause (1) of the definition of Remarketing Value) or the Pledged
Applicable Ownership Interests (as specified in clause (B) of the
definition of Applicable Ownership Interest) in the Treasury Portfolio,
as the case may be, with respect to Equity Security Units which include
Pledged Notes, Pledged Treasury Consideration or Pledged Applicable
Ownership Interests in the Treasury Portfolio, as the case may be, and
(B) any payments of principal with respect to any Notes, Treasury
Consideration (as specified in clause (2) of the definition of
Remarketing Value) or Applicable Ownership Interests (as specified in
clause (A) of the definition of Applicable Ownership Interest) in the
Treasury Portfolio, as the case may be, that have been released from the
Pledge pursuant to Section 4.3 hereof, to the Purchase Contract Agent,
for the benefit of the Holders of the Equity Security Units, to the
account designated by the Purchase Contract Agent for such purpose,
which shall be ABA #000000000, Account #323332749, Registered Bond
Incoming Wire A/C, not later than 10:00 a.m., New York City time, on the
Business Day such payment is received by the Collateral Agent (provided
that in the event such payment is received by the Collateral Agent on a
day that is not a Business Day or after 9:00 a.m., New York City time,
on a Business Day, then such payment shall be made not 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
not later than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event
such payment is received by the Collateral Agent on a day that is
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not a Business Day or after 10:00 a.m., New York City time, on a
Business Day, then such payment shall be made not 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 Notes,
Pledged Treasury Consideration (as specified in clause (2) of the
definition of Remarketing Value), the Pledged Applicable Ownership
Interests (as specified in clause (A) of the definition of Applicable
Ownership Interest) in the Treasury Portfolio or Pledged Treasury
Securities, as the case may be, to be paid upon settlement of the
Holders' obligations to purchase Common Stock under the Purchase
Contract, to the Company on the Stock Purchase Date in accordance with
the procedure set forth in Section 4.5(a) or 4.5(b) hereof, in full
satisfaction of the respective obligations of the Holders under the
related Purchase Contracts.
SECTION 3.2 Application of Payments.
All payments received by the Purchase Contract Agent as provided herein
shall be applied by the Purchase Contract Agent pursuant to the provisions of
the Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of principal on account of any Note,
Treasury Consideration (as specified in clause (2) of the definition of
Remarketing Value) or Applicable Ownership Interest (as specified in clause (A)
of the definition of Applicable Ownership Interest) in the Treasury Portfolio,
as applicable, that, at the time of such payment, is a Pledged Note, Pledged
Treasury Consideration (as specified in clause (2) of the definition of
Remarketing Value) or Pledged Applicable Ownership Interest (as specified in
clause (A) of the definition of Applicable Ownership Interest) in the Treasury
Portfolio, as the case may be, or a Holder of Stripped Units 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 NOTES
SECTION 4.1 Collateral Substitution and the Creation of Stripped Units.
(a) Unless a successful remarketing or a Tax Event Redemption has
occurred, at any time (i) other than during the period that commences at 5:00
p.m., New York City time, on May 5, 2005 and ends at 9:00 a.m., New York City
time, on May 19, 2005 and during the period that commences at 5:00 p.m., New
York City time, on June 22, 2005 and ends at 9:00 a.m., New York City time, on
July 7, 2005 and (ii) prior to 5:00 p.m., New York City time, on the eleventh
Business Day immediately preceding the Stock
9
Purchase Date, a Holder of Equity Security Units shall have the right to
substitute Treasury Securities for the Pledged Notes securing such Holder's
obligations under the Purchase Contracts comprising a part of such Equity
Security Units (a "Collateral Substitution"), in integral multiples of 20 Equity
Security Units by (a) Transferring to the Collateral Agent Treasury Securities
having an aggregate principal amount equal to the aggregate Stated Amount of
such Equity Security Units and (b) delivering instructions to the Purchase
Contract Agent, in its capacity as custodian for the Depositary, to decrease the
number of Equity Security Units evidenced by the Global Equity Security Units
Certificate(s) (or, if the Equity Security Units are held in certificated form,
such Equity Security Units) to the Purchase Contract Agent, accompanied by a
notice, substantially in the form of Exhibit B hereto, to the Purchase Contract
Agent stating that such Holder has Transferred Treasury Securities to the
Collateral Agent pursuant to clause (a) above (stating the principal amount and
the CUSIP numbers of the Treasury Securities Transferred by such Holder) and
requesting that the Purchase Contract Agent instruct the Collateral Agent to
release from the Pledge the Pledged Notes related to such Equity Security Units,
whereupon the Purchase Contract Agent shall promptly give such instruction in
writing to the Collateral Agent in the form provided in Exhibit A. Upon receipt
of Treasury Securities from a Holder of Equity Security Units and the related
written instruction from the Purchase Contract Agent, the Collateral Agent shall
release the Pledged Notes and shall promptly Transfer such Pledged Notes free
and clear of any lien, pledge or security interest created hereby, to the
Purchase Contract Agent. All items Transferred and/or substituted by any Holder
pursuant to this Section 4.1, Section 4.2 or any other Section of this Agreement
shall be Transferred and/or substituted free and clear of all liens, claims and
encumbrances.
(b) Holders who elect to withdraw the Pledged Notes from the related
Purchase Contracts by substituting Treasury Securities for such Pledged Notes
shall be responsible for any fees or expenses payable to the Collateral Agent
for its services as Collateral Agent in respect of the substitution, and the
Company shall not be responsible for any such fees or expenses.
(c) In the event a Holder making a Collateral Substitution fails to
effect a book-entry transfer of the Equity Security Units or fails to deliver an
Equity Security Units Certificate to the Purchase Contract Agent after
depositing Treasury Securities with the Collateral Agent, the Pledged Notes
constituting a part of such Equity Security Units, and any distributions on such
Pledged Notes shall be held in the name of the Purchase Contract Agent or its
nominee in trust for the benefit of such Holder, until such Equity Security
Units are so transferred or the Equity Security Units Certificate is so
delivered, as the case may be, or, with respect to an Equity Security Units
Certificate, such Holder provides evidence satisfactory to the Company and the
Purchase Contract Agent that such Equity Security Units Certificate has been
destroyed, lost or stolen, together with any indemnity that may be required by
the Purchase Contract Agent and the Company.
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SECTION 4.2 The Recreation of Equity Security Units.
(a) Unless a successful remarketing or a Tax Event Redemption has
occurred, at any time (i) other than during the period that commences at 5:00
p.m., New York City time, on May 5, 2005 and ends at 9:00 a.m., New York City
time, on May 19, 2005 and during the period that commences at 5:00 p.m., New
York City time, on June 22, 2005 and ends at 9:00 a.m., New York City time, on
July 7, 2005 and (ii) prior to 5:00 p.m., New York City time, on the eleventh
Business Day immediately preceding the Stock Purchase Date, a Holder of Stripped
Units shall have the right to recreate Equity Security Units consisting of the
Purchase Contracts and Notes in integral multiples of 20 Equity Security Units
by (x) Transferring to the Collateral Agent Separate Notes having an aggregate
principal amount equal to the aggregate stated amount of such Stripped Units and
(y) delivering instructions to the Purchase Contract Agent, in its capacity as
custodian for the Depositary, to decrease the number of Stripped Units evidenced
by the Global Stripped Units Certificate(s) (or, if the Stripped Units are held
in certificated form, 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 Notes to the
Collateral Agent pursuant to clause (x) 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. Upon receipt of the Separate Notes from such
Holder and the instruction from the Purchase Contract Agent, the Collateral
Agent shall release the Pledged Treasury Securities and shall promptly Transfer
such Pledged Treasury Securities, free and clear of any lien, pledge or security
interest created hereby, to the Purchase Contract Agent.
(b) Holders of Stripped Units who recreate Equity Security Units by
substituting Notes for the Treasury Securities shall be responsible for any fees
or expenses payable to the Collateral Agent for its services as Collateral Agent
in respect of the substitution, and the Company shall not be responsible for any
such fees or expenses.
(c) In the event a Holder who recreates Equity Security Units fails to
effect a book-entry transfer of the Stripped Units or fails to deliver a
Stripped Units Certificate to the Purchase Contract Agent after depositing Notes
with the Collateral Agent, the Treasury Securities constituting a part of such
Stripped Units, and any distributions on such Treasury Securities shall be held
in the name of the Purchase Contract Agent or its nominee in trust for the
benefit of such Holder, until such Stripped Units are so transferred or the
Stripped Units Certificate is so delivered, as the case may be, or, with respect
to a Stripped Units Certificate, such Holder provides evidence satisfactory to
the Company and the Purchase Contract Agent that such Stripped Units Certificate
has been destroyed, lost or stolen, together with any indemnity that may be
required by the Purchase Contract Agent and the Company.
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SECTION 4.3 Termination Event.
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from the Pledge and
shall promptly Transfer any Pledged Notes, Pledged Treasury Consideration or
Pledged Applicable Ownership Interests in the Treasury Portfolio, as the case
may be, and Pledged Treasury Securities to the Purchase Contract Agent for the
benefit of the Holders of the Equity Security Units and the Stripped Units,
respectively, free and clear of any lien, pledge or security interest or other
interest created hereby.
(b) If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Notes, Pledged Treasury Consideration, Pledged Applicable Ownership Interests in
the Treasury Portfolio, or Pledged Treasury Securities, as the case may be, as
provided by this Section 4.3, the Purchase Contract Agent shall:
(i) use its best efforts to obtain, at the expense of the
Company, an opinion of 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 Notes, Pledged Treasury Consideration, Pledged
Applicable Ownership Interests in the Treasury Portfolio 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 Notes, Pledged
Treasury Consideration, Pledged Applicable Ownership Interests in the
Treasury Portfolio or Pledged Treasury Securities, as the case may be,
as provided by this Section 4.3; or
(ii) commence an action or proceeding like that described in
subsection (i)(z) hereof within ten days after the occurrence of such
Termination Event.
SECTION 4.4 Early Settlement; Merger Early Settlement; Cash Settlement.
Upon written notice to the Collateral Agent by the Purchase Contract
Agent that one or more Holders of Equity Security Units or Stripped Units have
elected to effect
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Early Settlement, Merger Early Settlement or Cash Settlement of their respective
obligations under the Purchase Contracts forming a part of such Equity Security
Units or Stripped Units in accordance with the terms of the Purchase Contract
Agreement (setting forth the number of such Purchase Contracts as to which such
Holders have elected to effect Early Settlement, Merger Early Settlement or Cash
Settlement), and that, with respect to Early Settlement and Merger Early
Settlement, the Purchase Contract Agent has received and, with respect to Cash
Settlement, the Collateral Agent has received from such Holders, and paid to the
Company, the related Early Settlement Amounts, Merger Early Settlement Amounts
or Cash Settlement Amounts, as the case may be, pursuant to the terms of the
Purchase Contract Agreement and that all conditions to such Early Settlement or
Merger Early Settlement or Cash Settlement, as the case may be, have been
satisfied, then the Collateral Agent shall release from the Pledge (a) Pledged
Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interests
in the Treasury Portfolio, as the case may be, in the case of a Holder of Equity
Security Units or (b) Pledged Treasury Securities, in the case of a Holder of
Stripped Units, relating to such Purchase Contracts as to which such Holders
have elected to effect Early Settlement, Merger Early Settlement or Cash
Settlement, and shall Transfer all such Pledged Notes, Pledged Treasury
Consideration, Pledged Applicable Ownership Interests in the Treasury Portfolio
or Pledged Treasury Securities, as the case may be, free and clear of the Pledge
created hereby, to the Purchase Contract Agent for the benefit of such Holders.
SECTION 4.5 Remarketing; Application of Proceeds; Settlement.
(a) The Collateral Agent shall notify, not later than 10:00 a.m., New
York City time, on the third Business Day preceding the Initial Remarketing Date
or the first day of any subsequent Remarketing Period, as applicable, the
Remarketing Agent of the aggregate number of Pledged Notes to be remarketed. The
Collateral Agent shall, not later than 10:00 a.m., New York City time, on the
third Business Day immediately preceding the Initial Remarketing Date or the
first day of any subsequent Remarketing Period, as applicable, without any
instruction from Holders of Equity Security Units, Transfer the Pledged Notes to
the Remarketing Agent for remarketing. Upon the occurrence of a successful
remarketing, the Remarketing Agent will deliver the Treasury Consideration
purchased from the proceeds of the successful remarketing attributable to the
Pledged Notes to the Purchase Contract Agent, which shall thereupon deliver such
Treasury Consideration to the Collateral Agent. Upon receipt of such Treasury
Consideration from the Purchase Contract Agent, the Collateral Agent, for the
benefit of the Company, shall thereupon hold in the Collateral Account such
Treasury Consideration to secure such Equity Security Units Holders' obligations
under the Purchase Contracts and to fund the quarterly payment due to Equity
Security Units Holders on the Stock Purchase Date in an amount equal to the
quarterly interest payment on the Notes, calculated at the initial annual
interest rate. On the Stock Purchase Date, the Collateral Agent shall, at the
direction of the Company, (i) apply that portion of the payments received in
respect of the Pledged Treasury Consideration equal to the aggregate Stated
Amount of the related Equity Security Units to satisfy in full the obligations
of such Equity Security Units Holders to pay the Purchase Price under the
13
related Purchase Contracts and (ii) apply the remaining portion to pay the
quarterly payment due to Equity Security Units Holders on such Stock Purchase
Date in an amount equal to the quarterly interest payment on the Notes,
calculated at the initial annual interest rate.
(b) The Remarketing Agent shall make one or more attempts to remarket
the Notes in accordance with the procedures set forth in the Purchase Contract
Agreement and the Remarketing Agreement. If by 4:00 p.m., New York City time, on
the fifth Business Day immediately preceding the Stock Purchase Date, the
Remarketing Agent has failed to remarket the Notes at approximately, but not
less than, 100.5% of the Remarketing Value, the Last Failed Remarketing shall be
deemed to have occurred. Within three Business Days following the Last Failed
Remarketing, the Pledged Notes delivered to the Remarketing Agent pursuant to
Section 4.5(a) hereof shall be returned to the Collateral Agent. In this case,
the Remarketing Agent shall advise the Collateral Agent in writing that it
cannot remarket the related Pledged Notes of such Holders of Equity Security
Units, and the Holders of Equity Security Units that have not made an Early
Settlement, Merger Early Settlement or Cash Settlement shall be deemed to have
directed the Company to sell or deliver the Pledged Notes in full satisfaction
of their obligations under the Purchase Contracts. Pursuant to the written
direction of the Company, the Collateral Agent, for the benefit of the Company,
will sell or deliver the Pledged Notes in accordance with the Company's written
direction to satisfy in full, from any such sale or delivery, such Holders'
obligations under the related Purchase Contracts to pay the Purchase Price for
the Common Stock; provided, that if upon the Last Failed Remarketing, the
Collateral Agent sells or delivers the Pledged Notes in accordance with the
written direction of the Company, any accrued and unpaid interest on such Notes
will become payable by the Company to the Purchase Contract Agent for payment to
the Holders of the Equity Security Units to which such Notes relate in
accordance with the Purchase Contract Agreement.
(c) In the event a Holder of Stripped Units has not effected a Cash
Settlement, 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 from the payments received in respect of the related Pledged Treasury
Securities. Without receiving any instruction from any such Holder, the
Collateral Agent shall apply such payments to the settlement of such Purchase
Contracts on the Stock Purchase Date pursuant to the written instruction of 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 under the Purchase Contracts being settled thereby, the Collateral Agent
shall distribute such excess, when received, to the Purchase Contract Agent for
the benefit of such Holders of the Stripped Units.
(d) At any time after the Payment Date immediately preceding the Initial
Remarketing Date and prior to 11:00 a.m., New York City time, on the fourth
Business Day immediately preceding the Initial Remarketing Date or the first day
of any subsequent Remarketing Period, as applicable, holders of Separate Notes
may elect to
14
have their Separate Notes remarketed by Transferring their Separate Notes and
delivering a notice of such election, substantially in the form of Exhibit C
hereto, to the Custodial Agent. On the third Business Day immediately preceding
the Initial Remarketing Date or the first day of any subsequent Remarketing
Period, as applicable, by 10:00 a.m., New York City time, the Custodial Agent
shall notify the Remarketing Agent of the number of such Separate Notes to be
remarketed. The Custodial Agent will hold such Separate Notes in an account
separate from the Collateral Account. A holder of Separate Notes electing to
have its Separate Notes remarketed will also have the right to withdraw such
election by written notice to the Custodial Agent, substantially in the form of
Exhibit D hereto, prior to 11:00 a.m., New York City time, on the fourth
Business Day immediately preceding the Initial Remarketing Date or first day of
a subsequent Remarketing Period, as applicable, upon which notice the Custodial
Agent will return such Separate Notes to such holder. On the third Business Day
immediately preceding the Initial Remarketing Date or the first day of any
subsequent Remarketing Period, as applicable, the Custodial Agent at the written
direction of the Remarketing Agent will deliver to the Remarketing Agent for
remarketing all Separate Notes delivered to the Custodial Agent pursuant to this
Section 4.5(d) and not withdrawn pursuant to the terms hereof. After deducting
as the remarketing fee an amount not exceeding 25 basis points (0.25%) of the
total proceeds of such remarketing of such Separate Notes, the Remarketing Agent
will remit to the Custodial Agent the portion of the proceeds from such
remarketing, if successful, equal to the amount calculated in respect of such
Separate Notes as set forth in Section 2.06 of the Supplemental Indenture. 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 Separate Notes to the Custodial
Agent for redelivery to such holders of such Separate Notes. The Custodial Agent
shall be entitled to rely without further inquiry on any written instructions
received from a holder of Separate Notes and shall have no liability with
respect thereto. For purposes of this Section 4.5(d), a "holder" of a Separate
Note shall mean the Person in whose name such Separate Note is registered on the
books of the registrar for the Notes.
ARTICLE V
VOTING RIGHTS -- NOTES
SECTION 5.1 Exercise by Purchase Contract Agent.
Subject to the terms of the Purchase Contract Agreement, the Purchase
Contract Agent may exercise, or refrain from exercising, any and all voting and
other consensual rights pertaining to the Pledged Notes or any part thereof for
any purpose not inconsistent with the terms of this Agreement and in accordance
with the terms of the Purchase Contract Agreement; provided, that the Purchase
Contract Agent shall give the Company and the Collateral Agent at least five
days' prior written notice of the manner in which it intends to exercise, or its
reasons for refraining from exercising, any such right. Upon receipt of any
notices and other communications in respect of any Pledged Notes, including
notice of any meeting at which holders of Notes are entitled to vote or
15
solicitation of consents, waivers or proxies of holders of Notes, the Collateral
Agent shall use reasonable efforts to send promptly to the Purchase Contract
Agent such notice or communication, and as soon as reasonably practicable after
receipt of a written request therefor from the Purchase Contract Agent, execute
and deliver to the Purchase Contract Agent such proxies and other instruments in
respect of such Pledged Notes (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect to
the Pledged Notes.
ARTICLE VI
RIGHTS AND REMEDIES; TAX EVENT REDEMPTION
SECTION 6.1 Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies available at law or in
equity, after an event of default (as specified in Section 6.1(b)) hereunder,
the Collateral Agent on behalf of the Company 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 Notes or other Collateral in full satisfaction of the Holders'
obligations under the Purchase Contracts or (ii) sale of the Pledged Notes or
other Collateral in one or more public or private sales, in each case at the
written direction of the Company.
(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, Pledged Applicable Ownership Interests in the Treasury Portfolio
or Pledged Treasury Securities as provided in Article III hereof in satisfaction
of the obligations of the Holder of the Equity Security Units or Stripped Units
of which such Pledged Treasury Consideration, Pledged Applicable Ownership
Interests in the Treasury Portfolio or Pledged Treasury Securities, as
applicable, are a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent on behalf of the Company shall have and may exercise, with
reference to such Pledged Treasury Consideration, Pledged Applicable Ownership
Interests in the Treasury Portfolio or Pledged Treasury Securities, 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.
16
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent on behalf of the Company
is hereby irrevocably authorized to receive and collect all payments of (i) the
principal amount of, or interest on, the Pledged Notes, or (ii) the principal
amount of, or interest (if any) on, the Pledged Treasury Consideration, Pledged
Applicable Ownership Interests in the Treasury Portfolio or Pledged Treasury
Securities, subject, in each case, to the provisions of Article III, and as
otherwise granted herein.
(d) The Purchase Contract Agent, individually and as attorney-in-fact
for each Holder of Equity Security Units and Stripped Units, agrees that, from
time to time, upon the written request of the Company or the Collateral Agent
(acting upon the written request of the Company), the Purchase Contract Agent or
such Holder shall execute and deliver such further documents and do such other
acts and things as the Company or the Collateral Agent (acting upon the written
request of the Company) may reasonably request in order to maintain the Pledge,
and the perfection and priority thereof, and to confirm the rights of the
Collateral Agent hereunder. Notwithstanding the foregoing, in no event shall the
Purchase Contract Agent be responsible for the preparation or filing of
financing or continuation statements in the appropriate jurisdictions or
responsible for maintenance or perfection of any security interest hereunder.
The Purchase Contract Agent shall have no liability to any Holder for executing
any documents or taking any such acts requested by the Company or the Collateral
Agent (acting upon the written request of the Company) hereunder, except for
liability for its own negligent act, its own negligent failure to act, its bad
faith or its own willful misconduct.
SECTION 6.2 Substitutions.
Whenever a Holder has the right to substitute Treasury Securities or
Notes 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 the earlier of
the date of a successful remarketing of the Pledged Notes or the Stock Purchase
Date, the aggregate Redemption Price payable on the Tax Event Redemption Date
with respect to such Pledged Notes shall be delivered to the Collateral Agent by
the Trustee at or prior to 12:00 p.m., New York City time, by wire transfer in
immediately available funds at such place and at such account as may be
designated by the Collateral Agent in exchange for the Pledged Notes. In the
event the Collateral Agent receives such Redemption Price, the Collateral Agent
will, at the written direction of the Company, apply an amount, out of such
Redemption Price, equal to the aggregate Redemption Amount with respect to the
Pledged Notes to purchase from the Quotation Agent the Treasury Portfolio and
promptly remit the remaining portion of such Redemption Price to the Purchase
Contract Agent for payment to the Holders of Equity Security Units. The
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account
to secure the obligation of all Holders of Equity Security Units to purchase
Common Stock of the Company under the Purchase
17
Contracts constituting a part of such Equity Security Units, in substitution for
the Pledged Notes. Thereafter the Collateral Agent shall have such security
interests, rights and obligations with respect to the Treasury Portfolio as it
had in respect of the Pledged Notes as provided in Articles II, III, IV, V and
VI, and any reference herein to the Notes shall be deemed to be a reference to
such Treasury Portfolio, and any reference herein to interest on the Notes shall
be deemed to be a reference to distributions on such Treasury Portfolio.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.1 Representations and Warranties.
The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any representation or warranty made by or on
behalf of a Holder), hereby represent and warrant to the Collateral Agent and
the Company, which representations and warranties shall be deemed repeated on
each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and lien
on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and, in
the case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under Section 2.1
hereof;
(c) upon the Transfer of the Collateral to the Collateral Account, the
Collateral Agent, for the benefit of the Company, will have a valid and
perfected first priority security interest therein (assuming that any central
clearing operation or any Intermediary or other entity not within the control of
the Holder involved in the Transfer of the Collateral, including the Collateral
Agent, gives the notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the establishment
and exercise of control pursuant to Section 2.2 hereof); and
(d) the execution and performance by the Holder of its obligations under
this Agreement will not result in the creation of any security interest, lien or
other encumbrance on the Collateral other than the security interest and lien
granted under Section 2.1 hereof or violate any provision of any existing law or
regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.
18
SECTION 7.2 Covenants.
The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any covenant made by or on behalf of a Holder),
hereby covenant to the Collateral Agent and the Company 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 sale or other disposition of the Equity
Security Units and Stripped Units.
ARTICLE VIII
THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES INTERMEDIARY
SECTION 8.1 Appointment, Powers and Immunities.
(a) The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall act as agent for the Company hereunder with such powers as
are specifically vested in the Collateral Agent, the Custodial Agent and the
Securities Intermediary by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto, and shall have no duties, fiduciary
or otherwise, to any other Person. Each of the Collateral Agent, the Custodial
Agent and the Securities Intermediary:
(i) shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants or
obligations shall be inferred from this Agreement against any of them,
nor shall any of them be bound by the provisions of any agreement by any
party hereto beyond the specific terms hereof;
(ii) shall not be responsible for any recitals contained in this
Agreement, or in any certificate or other document referred to or
provided for in, or received by it under, this Agreement, the Equity
Security Units or Stripped 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 Custodial Agent or the Securities Intermediary, as the case
may be), the Equity Security Units or Stripped 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,
19
as the case may be) to perform any of its obligations hereunder or
thereunder or for the attachment, perfection, priority or, except as
expressly required hereby, existence, validity, perfection or
maintenance of any lien or security interest created hereunder;
(iii) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder (except in the case of
the Collateral Agent, pursuant to written directions furnished under
Section 8.2 hereof, subject to Section 8.6 hereof);
(iv) shall not be responsible for any action taken or omitted to
be taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith or
therewith, except for its own gross negligence or willful misconduct;
and
(v) shall not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with respect
to, the Equity Security Units or Stripped 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 or
consequential damages or lost profits or loss of business, arising in connection
with this Agreement even if the Collateral Agent, the Custodial Agent or the
Securities Intermediary has been advised of the likelihood of such loss or
damage being incurred and regardless of the form of action. Notwithstanding the
foregoing, the Collateral Agent, the Custodial Agent, the Purchase Contract
Agent and the Securities Intermediary, each in its individual capacity, hereby
waive any right of setoff, banker's lien, liens or perfection rights as
securities intermediary or any counterclaim with respect to any of the
Collateral.
(c) The Collateral Agent, Custodial Agent and Securities Intermediary
shall have no liability whatsoever for the action or inaction of any Clearing
Agency or any book-entry system thereof. In no event shall any Clearing Agency
or any book-entry system thereof be deemed an agent or subcustodian of the
Collateral Agent, Custodial Agent and Securities Intermediary. The Collateral
Agent, Custodial Agent and Securities Intermediary shall not be responsible or
liable for any failure or delay in the performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including, without limitation, acts of God;
earthquakes; fires; floods; war (whether declared or undeclared); terrorism;
civil or
20
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.
(d) Notwithstanding anything to the contrary contained in this Article
VIII, the Securities Intermediary shall have the duties and responsibilities of
a securities intermediary under Article 8 of the Code, including without
limitation, Sections 8-504, 8-505, 8-506, 8-507, 8-508 and 8-509.
SECTION 8.2 Instructions of the Company.
The Company shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, to direct the time, method and
place of conducting any proceeding for the realization of any right or remedy
available to the Collateral Agent, or of exercising any power conferred on the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, or to direct the taking or refraining from taking of any action
authorized by this Agreement; provided, however, that (i) such direction shall
not conflict with the provisions of any law or of this Agreement and (ii) the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall each
receive indemnity reasonably satisfactory to it as provided herein. Nothing
contained 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 Collateral Agent, the Custodial Agent and the Securities
Intermediary shall be entitled conclusively to rely upon any certification,
order, judgment, opinion, notice or other communication (including, without
limitation, any thereof by telephone or facsimile) reasonably believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons (without being required to determine the correctness of
any fact stated therein), and upon advice and statements of legal counsel and
other experts selected by the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be. As to any matters not expressly
provided for by this Agreement, the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall in all cases be fully protected in acting, or
in refraining from acting, hereunder in accordance with instructions given by
the Company in accordance with this Agreement.
SECTION 8.4 Rights in Other Capacities.
The Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may (without having to account therefor to the
Company) accept deposits from, lend money to, make investments in and generally
engage in any kind of banking, trust or other business with the Purchase
Contract Agent, any Holder of Equity Security
21
Units or Stripped Units and any holder of Separate Notes (and any of their
respective subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, and the Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent, any Holder of Equity Security Units or Stripped
Units or any holder of Separate Notes without having to account for the same to
the Company; provided that each of the Collateral Agent, the Custodial Agent and
the Securities Intermediary covenants and agrees with the Company that, except
as provided in this Agreement, it shall not accept, receive or permit there to
be created in favor of itself (and waives any right of set-off or 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 Collateral Agent, the Custodial Agent or the Securities
Intermediary shall be required to keep itself informed as to the performance or
observance by the Purchase Contract Agent or any Holder of Equity Security Units
or Stripped Units of this Agreement, the Purchase Contract Agreement, the Equity
Security Units or Stripped Units or any other document referred to or provided
for herein or therein or to inspect the properties or books of the Purchase
Contract Agent or any Holder of Equity Security Units or Stripped Units. The
Collateral Agent, the Custodial Agent and the Securities Intermediary shall not
have any duty or responsibility to provide the Company or the Remarketing Agent
with any credit or other information concerning the affairs, financial condition
or business of the Purchase Contract Agent, any Holder of Equity Security Units
or Stripped Units or any holder of Separate Notes (or any of their respective
subsidiaries or affiliates) that may come into the possession of the Collateral
Agent, the Custodial Agent or the Securities Intermediary or any of their
respective affiliates.
SECTION 8.6 Compensation and Indemnity.
The Company agrees to:
(a) 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, the Custodial Agent or
the Securities Intermediary, as the case may be, for all services rendered by
each of them hereunder, and
(b) indemnify the Collateral Agent, the Custodial Agent, the Securities
Intermediary and their officers, directors 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 or willful misconduct on its part,
arising out of or in connection with the acceptance or administration of its
powers and duties under this Agreement, including the reasonable out-of-pocket
costs and expenses (including
22
reasonable fees and expenses of counsel) incurred enforcing the Company's
indemnification obligation hereunder or 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 or potential 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, each
of 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. The provisions of this Section 8.6 shall survive the resignation or
removal of the Collateral Agent, the Custodial Agent and the Securities
Intermediary or the termination of this Agreement.
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, the Custodial Agent and the Securities Intermediary shall be
entitled, after prompt notice to the Company and the Purchase Contract Agent, at
its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and none of the Collateral Agent, the Custodial Agent
or the Securities Intermediary shall be or become liable in any way to any of
the parties hereto for its failure or refusal to comply with such conflicting
claims, demands or instructions. The Collateral Agent, the 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, the 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, the Custodial
Agent or the Securities Intermediary, as the case may be, sufficient to
save the Collateral Agent, the 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, the Custodial Agent or the Securities
23
Intermediary, as the case may be, may incur by reason of its acting
without willful misconduct or gross negligence.
The Collateral Agent, the 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, the Custodial Agent or the Securities
Intermediary, as the case may be, may deem necessary. Notwithstanding anything
contained herein to the contrary, none of the Collateral Agent, the Custodial
Agent or the Securities Intermediary shall be required to take any action that
is in its opinion contrary to law or to the terms of this Agreement, or which
would in its opinion subject it or any of its officers, employees or directors
to liability.
SECTION 8.8 Resignation.
Subject to the appointment and acceptance of a successor Collateral
Agent, the Custodial Agent or Securities Intermediary, as provided below:
(a) the Collateral Agent, Custodial Agent and the Securities
Intermediary may resign at any time by giving notice thereof to the Company and
the Purchase Contract Agent as attorney-in-fact for the Holders of Equity
Security Units and Stripped Units;
(b) the Collateral Agent, the Custodial Agent and the Securities
Intermediary may be removed at any time by the Company; and
(c) if the Collateral Agent, the Custodial Agent or the Securities
Intermediary fails to perform any of its material obligations hereunder in any
material respect for a period of not less than 20 days after receiving written
notice of such failure by the Purchase Contract Agent and such failure shall be
continuing, the Collateral Agent, the 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. The
Company shall promptly notify the Purchase Contract Agent of any removal of the
Collateral Agent, the Custodial Agent or the Securities Intermediary pursuant to
clause (b) of the second preceding sentence. Upon notice of 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 and shall
give the Purchase Contract Agent prompt notice thereof. 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, the Custodial Agent's or
Securities Intermediary's giving of notice of resignation or such removal, then
the retiring Collateral Agent, the 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, the Custodial
Agent or Securities Intermediary, as the case may be. Each of the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall be a bank
24
which has an office in New York, New York with a combined capital and surplus of
at least $50,000,000 or any affiliate of a bank holding company having such
capital and surplus. Upon the acceptance of any appointment as Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, hereunder by a
successor Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, such successor shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, and the retiring
Collateral Agent, Custodial Agent or Securities Intermediary, as the case may
be, shall take all appropriate action to transfer any money and property held by
it hereunder (including the Collateral) to such successor after the payment of
any outstanding fees, expenses and indemnities due and owing to such retiring
party. The retiring Collateral Agent, Custodial Agent or Securities Intermediary
shall, upon such succession, be discharged from its duties and obligations as
Collateral Agent, Custodial Agent or Securities Intermediary hereunder. After
any retiring Collateral Agent's, Custodial Agent's or Securities Intermediary's
resignation hereunder as Collateral Agent, Custodial Agent or Securities
Intermediary, the provisions of this Section 8.8, and Section 8.6 hereof, shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Collateral Agent, Custodial Agent or
Securities Intermediary. Any resignation or removal of the Collateral Agent
hereunder shall be deemed for all purposes of this Agreement as the simultaneous
resignation or removal of the Custodial Agent and the Securities Intermediary
hereunder.
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 of the corporate trust business of the Collateral Agent in its
individual capacity may be transferred, shall be the Collateral Agent, the
Custodial Agent, 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 or consult with
agents or advisors in connection with any of its duties hereunder, and the
Collateral Agent shall not be liable for any action taken or omitted by, or in
reliance upon the advice of, such agents or advisors selected in good faith. The
appointment of agents (other than legal counsel) pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
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.
25
SECTION 8.11 Exculpation.
Anything contained 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, and
regardless of the form of action.
ARTICLE IX
AMENDMENT
SECTION 9.1 Amendment Without Consent of Holders.
Without the consent of any Holders or the holders of any Separate Notes,
the Company (when authorized by a Board Resolution), the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent, at
any time and from time to time, may amend this Agreement, in form satisfactory
to the Company, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent to:
(i) evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the
Company;
(ii) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the
Company so long as such covenants or such surrender does not adversely
affect the validity, perfection or priority of the security interests
granted or created hereunder;
(iii) evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Custodial Agent, Securities
Intermediary or Purchase Contract Agent; or
(iv) cure any ambiguity, correct or supplement any provisions
herein which may be inconsistent with any other provisions herein, or
make any other provisions with respect to such matters or questions
arising under this Agreement, provided such action shall not adversely
affect the interests of the Holders.
SECTION 9.2 Amendment with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Outstanding Units (with the Equity Security Units and Stripped Units voting
together as one class), by Act of such Holders delivered to the Company, the
Purchase Contract Agent or the Collateral Agent, as the case may be, the Company
(when duly authorized by a Board Resolution), the Purchase Contract Agent, the
Collateral Agent, the Custodial Agent and the Securities Intermediary may amend
this Agreement for the purpose of modifying in
26
any manner the provisions of this Agreement or the rights of the Holders in
respect of the Equity Security Units or Stripped Units; provided, however, that
no amendment shall, without the consent of the Holder of each Equity Security
Unit and Stripped Unit affected thereby (in addition to the consent of the
holders of at least a majority of the Outstanding Units, with the Equity
Security Units and Stripped Units voting together as one class),
(i) change the amount or type of Collateral underlying an Equity
Security Unit or a Stripped Unit, impair the right of the Holder of any
Equity Security Units or Stripped Units to receive distributions on the
underlying Collateral, or otherwise adversely affect the Holder's rights
in or to such Collateral;
(ii) otherwise effect any action that would require the consent
of the Holder of each Equity Security Unit and Stripped Unit affected
thereby pursuant to the Purchase Contract Agreement if such action were
effected by an amendment thereto; or
(iii) reduce the percentage of Equity Security Units and
Stripped Units the consent of whose Holders is required for any such
amendment.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
SECTION 9.3 Execution of Amendments.
In executing any amendment permitted by this Section, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent shall receive and (subject to Section 8.1 hereof, with respect to
the Collateral Agent, and Section 7.1 of the Purchase Contract Agreement, with
respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Officer's Certificate and an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement and
that all conditions precedent, if any, to the execution and delivery of such
amendment have been satisfied and, in the case of an amendment pursuant to
Section 9.1, that such amendment does not adversely affect the validity,
perfection or priority of the security interests granted or created hereunder.
SECTION 9.4 Effect of Amendments.
Upon the execution of any amendment under this Article IX, this
Agreement shall be modified in accordance therewith, and such amendment shall
form a part of this Agreement for 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.
27
SECTION 9.5 Reference to Amendments.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any amendment pursuant to this Section may, and
shall if required by the Collateral Agent or the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent and the Collateral
Agent as to any matter provided for in such amendment. If the Company shall so
determine, new Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement 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; Submission to Jurisdiction.
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
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 Equity
Security Units and Stripped Units, acting through the Purchase Contract Agent as
their attorney-in-fact, each submit to the jurisdiction of the courts of the
State of New York and the courts of the United States of America, in each case
located in the Borough of Manhattan, City of New York and State of New York over
any suit, action or proceeding with respect to this Agreement or the
transactions contemplated hereby. The Company, the Collateral Agent, and the
Holders from time to time of Equity Security Units and Stripped Units, acting
through the Purchase Contract Agent as their attorney-in-fact, each waive any
objection that any of them may have to the venue of any suit, action or
proceeding with respect to this Agreement or the transactions contemplated
hereby in the courts of the
28
State of New York or the courts of the United States of America, in each case
located in the Borough of Manhattan, City of New York and State of New York, or
that such suit, action or proceeding brought in the courts of the State of New
York or the courts of the United States of America, in each case located in the
Borough of Manhattan, City of New York and State of New York, was brought in an
inconvenient court and agrees not to plead or claim the same.
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 facsimile) 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 facsimile, 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
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent and their respective successors and assigns, and
the Holders from time to time of the Equity Security Units and Stripped Units,
by their acceptance of the same, shall be deemed to have agreed to be bound by
the provisions hereof and to have ratified the agreements of, and the grant of
the Pledge hereunder by, the Purchase Contract Agent.
SECTION 10.5 Counterparts.
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
SECTION 10.6 Severability.
If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
29
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
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Equity Security Units or Stripped Units to
satisfy its obligations under the Purchase Contracts forming a part of the
Equity Security Units and Stripped 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 Company and security interests hereunder, and all
obligations of the Holders from time to time hereunder, shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Equity Security Units or Stripped Units or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of Equity Security Units or Stripped Units under the related Purchase
Contracts, or any other amendment or waiver of any term of, or any consent to
any departure from any requirement of, the Purchase Contract Agreement or any
Purchase Contract or any other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
30
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.
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
EL PASO CORPORATION
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Treasurer
Address for Notices:
El Paso Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Legal Department
Facsimile: (000) 000-0000
JPMORGAN CHASE BANK, as Purchase
Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Equity Security
Units and Stripped Units
By: /s/ X. Xxxxxxxx
-------------------------------------
Name: X. Xxxxxxxx
Title: Assistant Vice President
Address for Notices:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Facsimile: (000) 000-0000
00
XXX XXXX XX XXX XXXX,
as Collateral Agent,
Custodial Agent and
Securities Intermediary
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
Address for Notices:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Facsimile: (000) 000-0000
33
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
REGARDING CREATION OF STRIPPED UNITS OR
RECREATION OF EQUITY SECURITY UNITS
The Bank of New York, as Collateral Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Facsimile: (000) 000-0000
Re: Equity Security Units of El Paso Corporation (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of June 26, 2002 (the "Pledge Agreement"), among you,
as Collateral Agent, Custodial Agent and Securities Intermediary, the Company
and us, as Purchase Contract Agent and as attorney-in-fact for the Holders from
time to time of the Equity Security Units and Stripped Units, that the holder of
Equity Security Units or Stripped Units listed below (the "Holder") has elected
to substitute [$_____ aggregate principal amount of Treasury Securities (CUSIP
No. 912803 AG 8)] [$_____ aggregate principal amount of Notes] in exchange for
the related [Pledged Notes] [Pledged Treasury Securities] held by you in
accordance with the Pledge Agreement and has delivered to us a notice stating
that the Holder has Transferred [Treasury Securities] [Notes] to you, as
Collateral Agent. We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Notes], and upon the payment by such Holder of any
applicable fees, to release the [Notes] [Treasury Securities] related to such
[Equity Security Units] [Stripped Units] to us in accordance with the Holder's
instructions. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.
Date:
-------------------------------
JPMORGAN CHASE BANK,
as Purchase Contract Agent
By:
-------------------------------------
Name:
Title:
A-1
Please print name, Social Security or other Taxpayer Identification
Number, if any, and address of registered Holder electing to substitute
[Treasury Securities] [Notes] for the [Pledged Notes] [Pledged Treasury
Securities]:
Name:
Social Security or other Taxpayer
Identification Number, if any:
Address:
A-2
EXHIBIT B
INSTRUCTION FROM HOLDER
TO PURCHASE CONTRACT AGENT
REGARDING CREATION OF STRIPPED UNITS
OR RECREATION OF EQUITY SECURITY UNITS
JPMorgan Chase Bank, as Purchase Contract Agent
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Facsimile: (000) 000-0000
Re: Equity Security Units and Stripped Units of El Paso Corporation
(the "Company")
The undersigned Holder hereby [instructs you, in your capacity as
custodian for the Depositary, to decrease the number of [Equity Security Units
evidenced by the Global Equity Security Units Certificate(s)][Stripped Units
evidenced by the Global Stripped Units Certificate(s)] and] notifies you that it
has delivered to The Bank of New York, as Collateral Agent, Custodial Agent and
Securities Intermediary [$_______ aggregate principal amount of Treasury
Securities (CUSIP No. 912803 AG 8)] [$_______ aggregate principal amount of
Notes] in exchange for the related [Pledged Notes] [Pledged Treasury Securities]
held by the Collateral Agent, in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated June 26, 2002 (the "Pledge Agreement"), among you, as
Purchase Contract Agent and as attorney-in-fact of the Holders from time to time
of the Equity Security Units and Stripped Units, the Company and the Collateral
Agent, the Custodial Agent and the Securities Intermediary. The undersigned
Holder has paid the Collateral Agent all applicable fees relating to such
exchange. The undersigned Holder hereby instructs you to instruct the Collateral
Agent to release to you on behalf of the undersigned Holder the [Pledged Notes]
[Pledged Treasury Securities] related to such [Equity Security Units] [Stripped
Units]. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
Date: Signature:
--------------------- -----------------------------
Signature Guarantee:
-------------------
Please print name and address of Registered Holder:
Name:
Social Security or other Taxpayer Identification Number, if any:
Address:
B-1
EXHIBIT C
INSTRUCTION FROM HOLDER OF SEPARATE NOTES
TO CUSTODIAL AGENT
REGARDING REMARKETING
The Bank of New York,
as Custodial Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Facsimile: (000) 000-0000
Re: Notes of El Paso Corporation (the "Company")
The undersigned hereby notifies you in accordance with Section 4.5(d) of
the Pledge Agreement, dated as of June 26, 2002 (the "Pledge Agreement"), among
you, as Collateral Agent, Securities Intermediary and Custodial Agent, the
Company and JPMorgan Chase Bank, as Purchase Contract Agent and as
attorney-in-fact of the Holders from time to time of the Equity Security Units
and Stripped Units, that the undersigned elects to deliver $________ aggregate
principal amount of Notes for delivery to the Remarketing Agent prior to 11:00
a.m., New York City time, on the fourth Business Day immediately preceding [the
Initial Remarketing Date] [the first day of any subsequent Remarketing Period]
for remarketing pursuant to Section 4.5(d) of the Pledge Agreement. The
undersigned will, upon request of the Remarketing Agent, execute and deliver any
additional documents deemed by the Remarketing Agent or by the Company to be
necessary or desirable to complete the sale, assignment and transfer of the
Notes tendered hereby.
The undersigned hereby instructs you, upon receipt of the proceeds of
such remarketing, if successful, 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 Notes
tendered herewith from the Remarketing Agent, to deliver the Notes in accordance
with the instructions indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Notes tendered hereby and that the undersigned is the record owner
of any Notes tendered herewith in physical form or a participant in The
Depository Trust Company ("DTC") and the beneficial owner of any Notes tendered
herewith by book-entry transfer to your account at DTC and (ii) agrees to be
bound by the terms and conditions of Section 4.5(d) of the Pledge Agreement.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
C-1
Date: Signature:
-------------------------- ------------------------------
Signature Guarantee:
--------------------
Name:
Social Security or other Taxpayer
Identification Number, if any:
Address:
A. PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
Name(s):
--------------------------------------
(Please Print)
Address:
--------------------------------------
(Zip Code) (Please Print)
(Taxpayer Identification or Social Security
Number):
B. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Notes which are in physical form should be
mailed to the person(s) set forth below at the address set forth below.
Name(s):
--------------------------------------
(Please Print)
Address:
--------------------------------------
(Zip Code) (Please Print)
(Taxpayer Identification or Social Security
Number):
C-2
In the event of a Failed Remarketing, Notes which are in book-entry form should
be credited to the account at The Depository Trust Company set forth below.
Name of Account Party: DTC Account Number:
C-3
EXHIBIT D
INSTRUCTION FROM HOLDER OF SEPARATE NOTES
TO CUSTODIAL AGENT
REGARDING WITHDRAWAL FROM REMARKETING
The Bank of New York,
as Collateral Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Facsimile: (000) 000-0000
Re: Notes of El Paso Corporation (the "Company")
The undersigned hereby notifies you in accordance with Section 4.5(d) of
the Pledge Agreement, dated as of June 26, 2002 (the "Pledge Agreement"), among
you, as Collateral Agent, Securities Intermediary and Custodial Agent, the
Company and JPMorgan Chase Bank, as Purchase Contract Agent and as
attorney-in-fact of the Holders from time to time of the Equity Security Units
and Stripped Units, that the undersigned elects to withdraw the $_____ aggregate
principal amount of Notes delivered to the Custodial Agent on ___________, ____
for remarketing pursuant to Section 4.5(d) of the Pledge Agreement. The
undersigned hereby instructs you to return such Notes in accordance with the
instructions indicated herein under "Delivery 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.
Name(s):
--------------------------------------
(Please Print)
Address:
--------------------------------------
(Zip Code) (Please Print)
(Taxpayer Identification or Social Security
Number):
D-1
DELIVERY INSTRUCTIONS
Notes which are in physical form should be mailed to the person(s) set forth
below at the address set forth below.
Name(s):
--------------------------------------
(Please Print)
Address:
--------------------------------------
(Zip Code) (Please Print)
(Taxpayer Identification or Social Security
Number):
Notes which are in book-entry form should be credited to the account at The
Depository Trust Company set forth below.
Name of Account Party: DTC Account Number:
D-2
