1
EXHIBIT 4.5
PLEDGE AGREEMENT
DATED AS OF _____________, 2001
AMONG
NRG ENERGY, INC.,
[___________________________]
AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
[___________________________]
AS PURCHASE CONTRACT AGENT
2
TABLE OF CONTENTS
Page
ARTICLE I Definitions...............................................................................2
ARTICLE II Pledge; Control and Perfection...........................................................6
SECTION 2.1 The Pledge.....................................................................6
SECTION 2.2 Control and Perfection.........................................................8
ARTICLE III Distributions on Pledged Collateral....................................................10
ARTICLE IV Substitution, Release, Repledge and Settlement of
Debentures................................................................................11
SECTION 4.1 Substitution for Debentures and the Creation of
Treasury Units...................................................................11
SECTION 4.2 Substitution of Treasury Securities and the
Recreation of Corporate Units....................................................12
SECTION 4.3 Termination Event.............................................................13
SECTION 4.4 Cash Settlement...............................................................13
SECTION 4.5 Early Settlement..............................................................14
SECTION 4.6 Application of Proceeds; Settlement...........................................15
ARTICLE V Voting Rights - Debentures...............................................................17
ARTICLE VI Rights and Remedies; Tax Event Redemption...............................................17
SECTION 6.1 Rights and Remedies of the Collateral Agent...................................17
SECTION 6.2 Tax Event Redemption..........................................................19
SECTION 6.3 Initial Remarketing...........................................................19
SECTION 6.4 Substitutions.................................................................20
ARTICLE VII Representations and Warranties; Covenants..............................................20
SECTION 7.1 Representations and Warranties................................................20
SECTION 7.2 Covenants.....................................................................21
ARTICLE VIII The Collateral Agent..................................................................21
SECTION 8.1 Appointment, Powers and Immunities............................................21
SECTION 8.2 Instructions of the Company...................................................22
SECTION 8.3 Reliance......................................................................22
SECTION 8.4 Rights in other Capacities....................................................23
SECTION 8.5 Non-Reliance..................................................................23
SECTION 8.6 Compensation and Indemnity....................................................23
SECTION 8.7 Failure to Act................................................................24
SECTION 8.8 Resignation...................................................................24
SECTION 8.9 Right to Appoint Agent or Advisor.............................................25
SECTION 8.10 Survival.....................................................................25
SECTION 8.11 Exculpation..................................................................25
ARTICLE IX Amendment...............................................................................26
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
i
3
ARTICLE X Miscellaneous............................................................................28
SECTION 10.1 No Waiver....................................................................28
SECTION 10.2 Governing Law................................................................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................................................................29
SECTION 10.8 Security Interest Absolute...................................................30
EXHIBIT A INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT
EXHIBIT C INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
EXHIBIT D INSTRUCTION TO CUSTODIAL AGENT REGARDING WITHDRAWAL FROM REMARKETING
ii
4
PLEDGE AGREEMENT, dated as of _______________, 2001 (this "Agreement"),
among NRG Energy, Inc., a Delaware corporation (the "Company"),
[_______________], [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 [_______________________], not
individually but solely as purchase contract agent and as attorney-in-fact of
the Holders (as defined in the Purchase Contract Agreement) from time to time of
the Securities (as hereinafter defined) (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under the Purchase
Contract Agreement (as hereinafter defined).
RECITALS
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 8,000,000 Equity Units of the
Company (or 9,200,000 Equity Units if the Underwriters' overallotment option is
exercised in full), having a stated amount of $25 (the "Stated Amount") per
Equity Unit; and
WHEREAS, the Equity Units will initially consist of 8,000,000 (or
9,200,000 if the underwriters' overallotment option is exercised in full with
respect to the Corporate Units) units (referred to as "Corporate Units") with a
stated amount, per Corporate Unit, equal to the Stated Amount. Each Corporate
Unit will initially consist of (a) a stock purchase contract (the "Purchase
Contract") under which the holder will purchase from the Company not later than
___________, 2004 (the "Purchase Contract Settlement Date"), for an amount of
cash equal to the Stated Amount, a number of newly issued shares of common
stock, $0.01 par value per share (the "Common Stock"), of the Company equal to
the Settlement Rate (as defined below) and (b) either beneficial ownership of a
Debenture (as defined below) or, following a Successful Initial Remarketing or a
Tax Event Redemption, the Applicable Ownership Interest of the Treasury
Portfolio; and
WHEREAS, if Holders of Corporate Units substitute collateral as
contemplated by Section 4.1, each unit created thereby (referred to as "Treasury
Units" and, together with the Corporate Units, the "Securities") will initially
consist of (a) a Purchase Contract under which the Holder will purchase from the
Company on the Purchase Contract Settlement Date, for an amount in cash equal to
the Stated Amount, a number of newly issued shares of Common Stock of the
Company, equal to the Settlement Rate, and (b) a 1/40, or 2.5%, undivided
beneficial interest in a zero-coupon U.S. Treasury Security (CUSIP No.
_________) having a principal
5
amount at maturity equal to $1,000 and maturing on ___________, 2004 (the
"Treasury Securities"); and
WHEREAS, pursuant to the terms of the Indenture (as defined below) the
Company will issue $200,000,000 aggregate principal amount of _____% Senior
Debentures due 2006 (or $230,000,000 if the Underwriters' overallotment option
is exercised) (the "Debentures"), each having a principal amount per Debenture
equal to $25; and
WHEREAS, pursuant to the terms of the Purchase Contract Agreement and
the Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Debentures, any
Applicable Ownership Interest in the Treasury Portfolio and the Treasury
Securities to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof; and
WHEREAS, upon such pledge, the Pledged Debentures or the Applicable
Ownership Interests in the Treasury Portfolio, as the case may be, and the
Pledged Treasury Securities will be beneficially owned by the Holders but will
be owned of record by the Purchase Contract Agent subject to the Pledge
hereunder.
NOW THEREFORE, in consideration of the foregoing premises, 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 Securities, agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(c) initially capitalized terms used but not otherwise defined
herein have the meanings assigned to such terms in the Purchase Contract
Agreement; and
2
6
(d) the following terms have the meanings assigned to them in
this Section I(d); and
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State of
New York) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the securities account (number ______)
maintained at [_____________] in the name "[______________], as Purchase
Contract Agent on behalf of the holders of certain securities of NRG Energy,
Inc., Collateral Account subject to the security interest of
[_____________________], as Collateral Agent, for the benefit of NRG Energy,
Inc., as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this instrument.
"Common Stock" has the meaning specified in the Recitals.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Custodial Agent" has the meaning specified in the first paragraph of
this instrument.
"Debentures" has the meaning specified in the Recitals.
"Debenture Trustee" means [_____________], as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
3
7
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Permitted Investments" means any one of the following which shall
mature not later than the next succeeding Business Day (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US $200.0 million at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which commercial paper has a
rating at the time of purchase at least equal to "A-1" by Standard & Poor's
Ratings Services ("S&P") or at least equal to "P-1" by Xxxxx'x Investors
Service, Inc. ("Moody's"); and (v) investments in money market funds registered
under the Investment Company Act of 1940, as amended, rated in the highest
applicable rating category by S&P or Moody's.
"Person" and "person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Debentures" has the meaning specified in Section 2.1 hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Primary Treasury Dealer" means a primary U.S. government securities
dealer in The City of New York.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in ss. 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, maturity, collection or disposition of the Collateral
or any proceeds thereof.
"Purchase Contract" has the meaning specified in the Recitals.
4
8
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the
Recitals.
"Purchase Contract Settlement Date" has the meaning specified in the
Recitals.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section
8-102(a)(17) of the Code.
"Separate Debentures" means any Debentures that are not Pledged
Debentures.
"Stated Amount" has the meaning specified in the Recitals.
"Supplemental Remarketing Agreement" means the Supplemental Remarketing
Agreement, as defined in the Remarketing Agreement.
"Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, except as otherwise expressly provided herein, with
respect to the Collateral and in accordance with the instructions of the
Collateral Agent, the Purchase Contract Agent or the Holder, as applicable:
(i) in the case of Collateral consisting of securities which
cannot be delivered by book-entry or which the parties agree are to be
delivered in physical form, delivery in appropriate physical form to
the recipient accompanied by any duly executed
5
9
instruments of transfer, assignments in blank, transfer tax stamps and
any other documents necessary to constitute a legally valid transfer to
the recipient;
(ii) in the case of Collateral consisting of securities
maintained in book-entry form by causing a "securities intermediary"
(as defined in Section 8-102(a)(14) of the Code) to (i) credit a
"security entitlement" (as defined in Section 8-102(a)(17) of the Code)
with respect to such securities to a "securities account" (as defined
in Section 8-501(a) of the Code) maintained by or on behalf of the
recipient and (ii) 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.
"Treasury Securities" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means, as to
(i) a Debenture, the principal amount thereof, (ii) Cash, the face amount
thereof and (iii) Treasury Securities, the aggregate principal amount thereof at
maturity.
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
SECTION 2.1 The Pledge(a) The Holders from time to time as
beneficial owners of the Collateral (as defined below) acting through the
Purchase Contract Agent, as their attorney-in-fact, and the Purchase Contract
Agent, as nominal owner of the Collateral, each hereby pledge and grant to the
Collateral Agent, for the benefit of the Company, as collateral security for the
performance when due by such Holders of their respective obligations under the
related Purchase Contracts, a security interest in all of the right, title and
interest of the Purchase Contract Agent and such Holders (a) in the Debentures
constituting a part of the Securities and any Treasury Securities delivered in
exchange for any Debentures (or, if applicable, the Applicable Ownership
Interest in the Treasury Portfolio), any Debentures (or, if applicable, the
Applicable Ownership Interest in the Treasury Portfolio) delivered in exchange
for any Treasury Securities, in accordance with Article IV hereof, in each case
that have been Transferred to or received by the Collateral Agent and not
released by the Collateral Agent to such Holders under the provisions of this
Agreement; (b) in payments made by Holders pursuant to Section 4.4; (c) in the
Collateral Account and all securities, financial assets, Cash and other property
credited thereto and all Security Entitlements related thereto; (d) in the
Treasury Portfolio purchased on behalf of the Holders of Corporate Units by the
Collateral Agent upon the occurrence of a Successful Initial Remarketing or a
Tax Event Redemption as provided in Article VI, or otherwise, and (e) all
Proceeds of the foregoing (all of the foregoing, collectively, the
"Collateral").
6
10
Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Securities, shall cause the Debentures comprising a part of the Corporate Units
to be Transferred to the Collateral Agent for the benefit of the Company. Such
Debentures shall be Transferred by physically delivering such Debentures to the
Securities Intermediary indorsed in blank (or accompanied by a stock or bond
power indorsed in blank) and causing the Securities Intermediary to credit the
Collateral Account with such Debentures such that security entitlements with
respect to such Debentures are credited to the Collateral Account. In the event
a Holder of Corporate Units so elects, such Holder may Transfer Treasury
Securities to the Collateral Agent for the benefit of the Company as provided in
Section 4.1 hereof in exchange for the release by the Collateral Agent on behalf
of the Company of Debentures or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, with an aggregate principal amount
equal to the aggregate principal amount of the Treasury Securities so
Transferred, in the case of Debentures, or with an appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio equal to the aggregate principal amount of the
Treasury Securities so transferred, in the event that a Successful Initial
Remarketing or a Tax Event Redemption has occurred, to the Purchase Contract
Agent on behalf of such Holder. In the event that a Holder of Treasury Units so
elects, such Holder may Transfer Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio to the Collateral Agent for the
benefit of the Company as provided in Section 4.2 hereof in exchange for the
release by the Collateral Agent on behalf of the Company of Treasury Securities
with an aggregate principal amount at maturity equal to the aggregate principal
amount of the Debentures or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio so transferred to the Purchase Contract Agent on behalf of such
Holder. Treasury Securities and the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as applicable, shall be Transferred to the Collateral
Account maintained by the Collateral Agent at the Securities Intermediary by
book-entry transfer to the Collateral Account in accordance with the TRADES
Regulations and other applicable law and by the notation by the Securities
Intermediary on its books that a Security Entitlement with respect to such
Treasury Securities or appropriate Applicable Ownership Interest of the Treasury
Portfolio, has been credited to the Collateral Account.
(b) 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. The
pledge provided in this Section 2.1 is herein referred to as the "Pledge" and
the Debentures or Treasury Securities subject to the Pledge, excluding any
Debentures that are delivered pursuant to Section 6.2 hereof or Treasury
Securities released from the Pledge as provided in Article IV hereof, are
hereinafter referred to as "Pledged Debentures" or the "Pledged Treasury
Securities," respectively. Subject to the Pledge and the provisions of Section
2.2
7
11
hereof, the Holders from time to time shall have full beneficial ownership of
the Collateral. Whenever directed by the Collateral Agent acting on behalf of
the Company, the Securities Intermediary shall have the right to reregister the
Debentures or any other securities held in physical form in its name.
Except as may be required in order to release Debentures in connection
with a Holder's election to convert its investment from a Corporate Unit to a
Treasury Unit, or except as otherwise required to release Debentures as
specified herein, neither the Collateral Agent nor the Securities Intermediary
shall relinquish physical possession of any certificate evidencing a Debenture
prior to the termination of this Agreement, except Debentures may be held in any
clearing corporation in an account including only assets of customers of the
Collateral Agent or Securities Intermediary. If it becomes necessary for the
Securities Intermediary to relinquish physical possession of a certificate in
order to release a portion of the Debentures evidenced thereby from the Pledge,
the Securities Intermediary shall use its best efforts to obtain physical
possession of a replacement certificate evidencing any Debentures remaining
subject to the Pledge hereunder registered to it or indorsed in blank (or
accompanied by a stock or bond power indorsed in blank) within fifteen days of
the date it relinquished possession. The Securities Intermediary shall promptly
notify the Company and the Collateral Agent of the Securities Intermediary's
failure to obtain possession of any such replacement certificate as required
hereby.
SECTION 2.2 Control and Perfection(a) In connection with the
Pledge granted in Section 2.1, and subject to the other provisions of this
Agreement, the Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, and the Purchase Contract Agent each 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 on behalf of the Company may give in writing
with respect to the Collateral Account, the Collateral credited thereto and any
Security Entitlements with respect to any thereof. Such instructions and
entitlement orders may, without limitation, direct the Securities Intermediary
to transfer, redeem, sell, liquidate, assign, deliver or otherwise dispose of
the Debentures, the Treasury Securities, the Treasury Portfolio, and any
Security Entitlements with respect thereto and to pay and deliver any income,
proceeds or other funds derived therefrom to the Company. The Holders from time
to time acting through the Purchase Contract Agent hereby further authorize and
direct the Collateral Agent, as agent of the Company, to itself issue
instructions and entitlement orders, and to otherwise take action, with respect
to the Collateral Account, the Collateral credited thereto and any security
entitlements with respect thereto, pursuant to the terms and provisions hereof,
all without the necessity of obtaining the further consent of the Purchase
Contract Agent or any of the Holders. The Collateral Agent shall be the agent of
the Company and shall act as directed in writing by the Company. Without
limiting the generality of the foregoing, the
8
12
Collateral Agent shall issue entitlement orders to the Securities Intermediary
when and as directed 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, indorsed to the Securities Intermediary or in blank or credited to
another collateral account maintained in the name of the Securities Intermediary
and in no case will any financial asset credited to the Collateral Account be
registered in the name of the Purchase Contract Agent, the Collateral Agent, the
Company or any Holder, payable to the order of, or specially indorsed to, the
Purchase Contract Agent, the Collateral Agent, the Company or any Holder except
to the extent the foregoing have been specially indorsed to the Securities
Intermediary or in blank; (ii) all property delivered to the Securities
Intermediary pursuant to this Pledge Agreement (including, without limitation,
any Debentures, the Treasury 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, treat the Purchase
Contract Agent as entitled to exercise the rights of any financial asset
credited to the Collateral Account; (iv) the Securities Intermediary has not
entered into, and until the termination of this Agreement will not enter into,
any agreement with any other person relating to the Collateral Account and/or
any financial assets credited thereto pursuant to which it has agreed to comply
with entitlement orders (as defined in Section 8-102(a)(8) of the Code) of such
other person; and (v) the Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into, any agreement with
the Company, the Collateral Agent or the Purchase Contract Agent purporting to
limit or condition the obligation of the Securities Intermediary to comply with
entitlement orders as set forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item of
property (whether investment property, financial asset, security, instrument or
cash) credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorneys-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
9
13
be deemed to require of the Collateral Agent any specific duties or obligations
not otherwise assumed by the Collateral Agent hereunder.
ARTICLE III
DISTRIBUTIONS ON PLEDGED COLLATERAL
So long as the Purchase Contract Agent is the registered owner of the
Pledged Debentures, it shall receive all payments thereon. If the Pledged
Debentures are reregistered, such that the Collateral Agent becomes the
registered holder, all payments of principal on the Pledged Debentures or, if
applicable, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, or
interest payments on the Pledged Debentures or on the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
of the Treasury Portfolio, as the case may be, and all payments of the principal
of, or cash distributions on, any Pledged Treasury Securities received by the
Collateral Agent that are properly payable hereunder shall be paid by the
Collateral Agent by wire transfer in same day funds:
(i) in the case of (A) interest payments with respect to the
Pledged Debentures or the appropriate Applicable Ownership Interest (as
specified in clause (B) of the definition of such term) of the Treasury
Portfolio, as the case may be, and (B) any payments of principal or, if
applicable, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio with
respect to any Debentures or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, that have been released from the
Pledge pursuant to Section 4.1 or 4.3 hereof, to the Purchase Contract Agent,
for the benefit of the relevant Holders of Securities, to the account designated
by the Purchase Contract Agent for such purpose, no later than 2:00 p.m., New
York City time, on the Business Day such payment is received by the Collateral
Agent (provided that in the event such payment is received by the Collateral
Agent on a day that is not a Business Day or after 12:30 p.m., New York City
time, on a Business Day, then such payment shall be made no later than 10:30
a.m., New York City time, on the next succeeding Business Day);
(ii) in the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to Section
4.2 or 4.3 hereof, to the Purchase Contract Agent, for the benefit of the
Holders of the Treasury Units, to the accounts designated by the Purchase
Contract Agent in writing for such purpose, no later than 2:00 p.m., New York
City time, on the Business Day such payment is received by the Collateral Agent
(provided that in the event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30 a.m., New York
City time, on the next succeeding Business Day); and
10
14
(iii) in the case of payments of the Proceeds of any Pledged
Debentures or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, or the Proceeds of any Pledged Treasury Securities, to the Company
on the Purchase Contract Settlement Date to the extent of the Purchase Price in
accordance with the procedure set forth in Section 4.6(a) or 4.6(b) hereof, in
full satisfaction of the respective obligations of the Holders under the related
Purchase Contracts and, to the extent such Proceeds exceed the Purchase Price,
to the Purchase Contract Agent for the benefit of the Holders.
All payments received by the Purchase Contract Agent as provided herein shall be
applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the principal amount of the
Debenture or, if applicable, the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) on account of any
Pledged Debenture or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as applicable, that, at the time of such payment, is subject
to the Pledge, or a Holder of a Treasury Unit shall receive any payments of
principal on account of any Treasury Securities that, at the time of such
payment, are Pledged Treasury Securities, the Purchase Contract Agent or such
Holder shall hold the same as trustee of an express trust for the benefit of the
Company (and promptly deliver the same over to the Company) for application to
the obligations of the Holders under the related Purchase Contracts, and the
Holders shall acquire no right, title or interest in any such payments of
principal so received.
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF
DEBENTURES
SECTION 4.1 Substitution for Debentures and the Creation of
Treasury Units At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (or on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date, if a
Tax Event Redemption or a Successful Initial Remarketing has occurred), a Holder
of Corporate Units shall have the right to substitute Treasury Securities for
the Pledged Debentures (or, if a Tax Event Redemption or a Successful Initial
Remarketing has occurred, the appropriate Applicable Ownership Interest in the
Treasury Portfolio) securing such Holder's obligations under the Purchase
Contract(s) comprising a part of its Corporate Units in integral multiples of 40
Corporate Units by (a) Transferring to the Collateral Agent Treasury Securities
having a Value equal to the aggregate principal amount of the Pledged Debentures
(or appropriate Applicable Ownership Interest (as defined in clause (A) of the
definition of such term) in the Treasury Portfolio as the case may be), to be
released and transferring the related Corporate 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 the
relevant
11
15
Treasury Securities to the Collateral Agent pursuant to clause (a) above
(stating the Value of the Treasury Securities Transferred by such Holder) and
requesting that the Purchase Contract Agent instruct the Collateral Agent to
release from the Pledge the Pledged Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, related to
such Corporate Units. The Purchase Contract Agent shall instruct the Collateral
Agent in the form provided in Exhibit A; provided, however, that if a Tax Event
Redemption or a Successful Initial Remarketing has occurred and the Treasury
Portfolio has become a component of the Corporate Units, Holders of Corporate
Units may make such substitution only in integral multiples of ________
Corporate Units at any time on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date. Upon receipt of Treasury
Securities from a Holder of Corporate Units and the related instruction from the
Purchase Contract Agent, the Collateral Agent shall release the Pledged
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, and shall promptly Transfer to the securities
account specified by the Purchase Contract Agent such Pledged Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, free and clear of any lien, pledge or security interest created hereby.
All items Transferred and/or substituted by any Holder pursuant to this Section
4.1, Section 4.2 or any other Section of this Agreement shall be Transferred
and/or substituted free and clear of all liens, claims and encumbrances.
SECTION 4.2 Substitution of Treasury Securities and the
Recreation of Corporate Units At any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date (or on or prior to
the second Business Day immediately preceding the Purchase Contract Settlement
Date, if a Tax Event Redemption or a Successful Initial Remarketing has
occurred), a Holder of Treasury Units shall have the right to recreate Corporate
Units in integral multiples of 40 Corporate Units by (a) Transferring to the
Collateral Agent Debentures having a Value equal to the Value of the Pledged
Treasury Securities to be released (or the appropriate Applicable Ownership
Interest of the Treasury Portfolio with the Applicable Ownership Interest (as
defined in clause (A) of the definition of such term) having Value equal to the
Value of the Pledged Treasury Securities to be released) and (b) delivering the
related Treasury 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 the relevant amount of Debentures (or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be) to the Collateral Agent pursuant to clause (a) above and requesting
that the Purchase Contract Agent instruct the Collateral Agent to release from
the Pledge the Pledged Treasury Securities underlying such Treasury Units. The
Purchase Contract Agent shall instruct the Collateral Agent in the form provided
in Exhibit A; provided, however, that if a Tax Event Redemption or a Successful
Initial Remarketing has occurred and the Treasury Portfolio has become a
component of the Corporate Units, Holders of Treasury Units may make such
substitution only in integral multiples of ________ Treasury Units, at any time
on or prior to the second Business Day immediately
12
16
preceding the Purchase Contract Settlement Date. Upon receipt of the Debentures
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, from such Holder and the instruction from the Purchase Contract
Agent, the Collateral Agent shall release the Treasury Securities having a
corresponding aggregate principal amount from the Pledge and shall promptly
Transfer such Treasury Securities, free and clear of any lien, pledge or
security interest created hereby, to the Purchase Contract Agent.
SECTION 4.3 Termination Event Upon receipt by the Collateral
Agent of written notice from the Company or the Purchase Contract Agent that
there has occurred a Termination Event, the Collateral Agent shall release all
Collateral from the Pledge and shall promptly Transfer any Pledged Debentures
(or the Applicable Ownership Interest of the Treasury Portfolio if a Tax Event
Redemption or a Successful Initial Remarketing has occurred) and Pledged
Treasury Securities to the Purchase Contract Agent for the benefit of the
Holders of the Corporate Units and the Treasury Units, respectively, free and
clear of any lien, pledge or security interest or other interest created hereby.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Debentures, the Treasury Portfolio or of the Pledged Treasury Securities, as the
case may be, as provided by this Section 4.3, the Purchase Contract Agent shall
(i) use reasonable efforts to obtain an opinion of a nationally recognized law
firm reasonably acceptable to the Collateral Agent to the effect that, as a
result of the Company's being the debtor in such a bankruptcy case, the
Collateral Agent will not be prohibited from releasing or Transferring the
Collateral as provided in this Section 4.3, and shall deliver such opinion to
the Collateral Agent within ten days after the occurrence of such Termination
Event, and if (y) the Purchase Contract Agent shall be unable to obtain such
opinion within ten days after the occurrence of such Termination Event or (z)
the Collateral Agent shall continue, after delivery of such opinion, to refuse
to effectuate the release and Transfer of all Pledged Debentures, the Treasury
Portfolio or the Pledged Treasury Securities, as the case may be, as provided in
this Section 4.3, then the Purchase Contract Agent shall within fifteen days
after the occurrence of such Termination Event commence an action or proceeding
in the court with jurisdiction of the Company's case under the Bankruptcy Code
seeking an order requiring the Collateral Agent to effectuate the release and
transfer of all Pledged Debentures, the Treasury Portfolio or of the Pledged
Treasury Securities, as the case may be, as provided by this Section 4.3 or (ii)
commence an action or proceeding like that described in subsection (i)(z) hereof
within ten days after the occurrence of such Termination Event.
SECTION 4.4 Cash Settlement(a) Upon receipt by the Collateral
Agent of (i) a notice from the Purchase Contract Agent promptly after the
receipt by the Purchase Contract Agent of such notice that a Holder of a
Corporate Unit has elected, in accordance with the procedures specified in
Section 5.4(a)(i) of the
13
17
Purchase Contract Agreement to settle its Purchase Contract with Cash and (ii)
payment of the amount required to settle such Purchase Contract by such Holder
on or prior to 11:00 a.m., New York City time, on the Business Day immediately
preceding the Purchase Contract Settlement Date in lawful money of the United
States by certified or cashiers' check or wire transfer in immediately available
funds payable to or upon the order of the Company, then the Collateral Agent
shall, at the written direction of the Company, promptly invest any Cash
received from a Holder in connection with a Cash Settlement in Permitted
Investments. Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Purchase Contract Settlement Date, the Collateral Agent shall
pay the portion of such proceeds and deliver any certified or cashiers' checks
received and any funds so wired, in an aggregate amount equal to the Purchase
Price, to the Company on the Purchase Contract Settlement Date, and shall
distribute any funds in respect of the interest earned from the Permitted
Investments to the Purchase Contract Agent for payment to the relevant Holders.
(b) If a Holder of a Corporate Unit (unless a Tax Event Redemption or a
Successful Initial Remarketing has occurred) fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
Section 5.4(a)(i) of the Purchase Contract Agreement, such failure shall
constitute an event of default under the Purchase Contract Agreement and
hereunder, and the Holder shall be deemed to have consented to the disposition
of the Pledged Debentures pursuant to the remarketing as described in Section
5.4(b) of the Purchase Contract Agreement, which is incorporated herein by
reference. If a Holder of a Corporate Unit does notify the Purchase Contract
Agent as provided in Section 5.4(a)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by Section 5.4(a)(ii) of the Purchase Contract Agreement, the Pledged
Debentures of such a Holder will not be remarketed but instead the Collateral
Agent, for the benefit of the Company, will exercise its rights as a secured
party with respect to such Debentures at the direction of the Company to retain
or dispose of the Collateral in accordance with applicable law. In addition, in
the event of a Failed Secondary Remarketing as described in Section 5.4(b) of
the Purchase Contract Agreement, such Failed Secondary Remarketing shall
constitute an additional event of default hereunder by such Holder and the
Collateral Agent, for the benefit of the Company, will also exercise its rights
as a secured party with respect to such Pledged Debentures at the direction of
the Company to retain or dispose of the Collateral in accordance with applicable
law.
SECTION 4.5 Early Settlement Upon written notice to the
Collateral Agent by the Purchase Contract Agent that one or more Holders of
Securities have elected to effect Early Settlement of their respective
obligations under the Purchase Contracts forming a part of such Securities in
accordance with the terms of the Purchase Contracts and the Purchase Contract
Agreement (setting forth the number of such Purchase Contracts as to which such
Holders have elected to effect Early Settlement), and that the Purchase Contract
Agent has received from such Holders, and paid to the Company as confirmed in
writing by the Company, the related Early
14
18
Settlement Amounts pursuant to the terms of the Purchase Contracts and the
Purchase Contract Agreement and that all conditions to such Early Settlement
have been satisfied, then the Collateral Agent shall release from the Pledge,
(a) Pledged Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio in the case of a Holder of Corporate Units or (b) Pledged
Treasury Securities in the case of a Holder of Treasury Units, as the case may
be, in each case with an aggregate principal amount, as the case may be, equal
to the product of (i) the Stated Amount times (ii) the number of such Purchase
Contracts as to which such Holders have elected to effect Early Settlement and
shall Transfer all such Pledged Debentures, the appropriate Applicable Ownership
Interest of the Treasury Portfolio or the 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 4.6 Application of Proceeds; Settlement(a) In the event a
Holder of Corporate Units (unless a Tax Event Redemption or a Successful Initial
Remarketing has occurred) has not elected to make an effective Cash Settlement
by notifying the Purchase Contract Agent (with a copy to the Collateral Agent)
in the manner provided for in paragraph 5.4(a)(i) in the Purchase Contract
Agreement and has not made an Early Settlement of the Purchase Contracts
underlying its Corporate 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 Proceeds of the related Pledged Debentures. The Collateral Agent shall,
by 10:00 a.m., New York City time, on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date, without any instruction from
such Holder of Corporate Units, present the related Pledged Debentures to the
Remarketing Agent for remarketing. Upon receiving such Pledged Debentures, the
Remarketing Agent, pursuant to the terms of the Remarketing Agreement and the
Supplemental Remarketing Agreement, will use its reasonable efforts to remarket
such Pledged Debentures on such date at a price of approximately 100.5% (but not
less than 100%) of the aggregate Value of such Pledged Debentures. After
deducting as the Remarketing Fee an amount not exceeding 25 basis points (.25%)
of the aggregate Value of the remarketed Pledged Debentures from any amount of
such Proceeds in excess of the aggregate Value of the Remarketed Pledged
Debentures, the Remarketing Agent will remit the entire amount of the Proceeds
of such remarketing to the Collateral Agent. On the Purchase Contract Settlement
Date, the Collateral Agent shall apply that portion of the Proceeds from such
remarketing equal to the aggregate Value of such remarketed Pledged Debentures
to satisfy in full the obligations of such Holders of Corporate Units to pay the
Purchase Price to purchase the Common Stock under the related Purchase
Contracts. The remaining portion of such Proceeds, if any, shall be remitted by
the Collateral Agent to the Purchase Contract Agent for payment to the Holders.
If the Remarketing Agent advises the Collateral Agent in writing that it cannot
remarket the related Pledged Debentures of such Holders of Corporate Units at a
price not less than 100% of the aggregate Value of such Pledged Debentures or if
the remarketing shall not have occurred because a condition precedent to the
remarketing shall not have been fulfilled, thus resulting in a Failed Secondary
Remarketing and an event of default under the Purchase Contract Agreement and
15
19
hereunder, the Collateral Agent, for the benefit of the Company will, at the
written direction of the Company, retain or dispose of the Pledged Debentures in
accordance with applicable law and satisfy in full, from any such disposition or
retention, such Holder's obligation to pay the Purchase Price for the Common
Stock.
(b) In the event a Holder of Treasury Units or Corporate Units (if a
Tax Event Redemption or a Successful Initial Remarketing has occurred) has not
made an Early Settlement of the Purchase Contracts underlying its Treasury Units
or Corporate 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
Proceeds of the related Pledged Treasury Securities or the appropriate
Applicable Ownership Interest (as defined in clause (A) of the definition of
such term) of the Treasury Portfolio, as the case may be. On the Business Day
immediately prior to the Purchase Contract Settlement Date, the Collateral Agent
shall, at the written direction of the Purchase Contract Agent, which written
direction shall be furnished to the Collateral Agent prior to 11:30 a.m. New
York City time, invest the Cash proceeds of the maturing Pledged Treasury
Securities or the maturing appropriate Applicable Ownership Interest (as defined
in clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, in overnight Permitted Investments. Without receiving any
instruction from any such Holder of Treasury Units or Corporate Units, the
Collateral Agent shall apply the Proceeds of the related Pledged Treasury
Securities or appropriate Applicable Ownership Interest (as defined in clause
(A) of the definition of such term) of the Treasury Portfolio to the settlement
of such Purchase Contracts on the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities or appropriate Applicable Ownership Interest (as defined in clause
(A) of the definition of such term) of the Treasury Portfolio, as the case may
be, and the investment earnings from the investment in overnight Permitted
Investments is in excess of the aggregate Purchase Price of the Purchase
Contracts being settled thereby, the Collateral Agent shall remit such excess,
when received, to the Purchase Contract Agent for the benefit of the Holders.
(c) Pursuant to the Remarketing Agreement and subject to the terms of
the Supplemental Remarketing Agreement, on or prior to the second Business Day
immediately preceding the Initial Remarketing Date or the Secondary Remarketing
Date, as applicable, but no earlier than the Payment Date immediately preceding
such date, holders of Separate Debentures may elect to have their Separate
Debentures remarketed by delivering their Separate Debentures, together with a
notice of such election, substantially in the form of Exhibit C hereto, to the
Custodial Agent. The Custodial Agent shall hold such Separate Debentures in an
account separate from the Collateral Account. A holder of Separate Debentures
electing to have its Separate Debentures remarketed will also have the right to
withdraw such election by written notice to the Custodial Agent, substantially
in the form of Exhibit D hereto, on or prior to the second Business Day
immediately preceding the Initial Remarketing Date or the Secondary Remarketing
Date, as applicable, upon which
16
20
notice the Custodial Agent shall return such Separate Debentures to such holder.
On the Business Day immediately preceding the Initial Remarketing Date or the
Secondary Remarketing Date, as applicable, the Custodial Agent shall notify the
Remarketing Agent of the aggregate principal amount of the separate Debentures
to be remarketed and will deliver to the Remarketing Agent for remarketing all
Separate Debentures delivered to the Custodial Agent pursuant to this Section
4.6(c) and not withdrawn pursuant to the terms hereof prior to such date. After
deducting the Remarketing Fee to the extent permitted under the terms of the
Remarketing Agreement, the Remarketing Agent will remit to the Custodial Agent
the remaining portion of the proceeds for the benefit of such holders. In the
event of a Failed Initial Remarketing or a Failed Secondary Remarketing, as
applicable, the Remarketing Agent will promptly return such Separate Debentures
to the Custodial Agent for redelivery to such holders.
ARTICLE V
VOTING RIGHTS - DEBENTURES
The Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the Pledged
Debentures or any part thereof for any purpose not inconsistent with the terms
of this Agreement and in accordance with the terms of the Purchase Contract
Agreement; provided, that the Purchase Contract Agent shall not exercise or, as
the case may be, shall not refrain from exercising such right if, in the
judgment of the Company, such action would impair or otherwise have a material
adverse effect on the value of all or any of the Pledged Debentures; and
provided, further, that the Purchase Contract Agent shall give the Company and
the Collateral Agent at least five days' prior written notice of the manner in
which it intends to exercise, or its reasons for refraining from exercising, any
such right. Upon receipt of any notices and other communications in respect of
any Pledged Debentures, including notice of any meeting at which holders of
Debentures are entitled to vote or solicitation of consents, waivers or proxies
of holders of Debentures, the Collateral Agent shall use reasonable efforts to
send promptly to the Purchase Contract Agent such notice or communication, and
as soon as reasonably practicable after receipt of a written request therefor
from the Purchase Contract Agent, execute and deliver to the Purchase Contract
Agent such proxies and other instruments in respect of such Pledged Debentures
(in form and substance satisfactory to the Collateral Agent) as are prepared by
the Purchase Contract Agent with respect to the Pledged Debentures.
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 specified in Section 4.4 hereof or otherwise
available at law or in equity, after an event of default hereunder, the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in
17
21
the State of New York from time to time (the "Code") (whether or not, to the
extent permitted by law, the Code is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Wherever reference is made in this Agreement to any section of the
Code, such reference shall be deemed to include a reference to any provision of
the Code which is a successor to, or amendment of, such section. Without
limiting the generality of the foregoing, such remedies may include, to the
extent permitted by applicable law, (i) retention of the Pledged Debentures or
other Collateral in full satisfaction of the Holders obligations under the
Purchase Contracts or (ii) sale of the Pledged Debentures or other Collateral in
one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio or on account of principal payments of any Pledged
Treasury Securities as provided in Article 3 hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities, or such appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, and such obligations of such Holder, any and all of
the rights and remedies available to a secured party under the Code and the
TRADES Regulations after default by a debtor, and as otherwise granted herein or
under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) principal and interest on
the Pledged Debentures, (ii) the principal amount of the Pledged Treasury
Securities, or (iii) the appropriate Applicable Ownership Interest of the
Treasury Portfolio, subject, in each case, to the provisions of Article 3, and
as otherwise granted herein.
(d) The Purchase Contract Agent, individually and as attorney-in-fact
for each Holder of Securities, agrees that, from time to time, upon the written
request of the Collateral Agent, the Purchase Contract Agent or such Holder
shall execute and deliver such further documents and do such other acts and
things as the Collateral Agent may reasonably request in order to maintain the
Pledge, and the perfection and priority thereof, and to confirm the rights of
the Collateral Agent hereunder. The Purchase Contract Agent shall have no
liability to any Holder for executing any documents or taking any such acts
requested by the Collateral Agent hereunder, except for liability for its own
negligent act, its own negligent failure to act or its
18
22
own willful misconduct.
SECTION 6.2 Tax Event Redemption Upon the occurrence of a Tax
Event Redemption prior to the Purchase Contract Settlement Date, the aggregate
Redemption Price payable on the Tax Event Redemption Date with respect to the
Pledged Debentures shall be delivered to the Collateral Agent by the Debenture
Trustee on or prior to 12:00 p.m., New York City time, by check or wire transfer
in immediately available funds at such place and at such account as may be
designated by the Collateral Agent in exchange for the Pledged Debentures. In
the event the Collateral Agent receives such Redemption Price, the Collateral
Agent will, at the written direction of the Company, apply an amount, out of
such Redemption Price, equal to the aggregate Redemption Amount with respect to
the Pledged Debentures to purchase from the Quotation Agent the Treasury
Portfolio and promptly remit the remaining portion of such Redemption Price to
the Purchase Contract Agent for payment to the Holders of Corporate Units. The
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account
to secure the obligation of all Holders of Corporate Units to purchase Common
Stock of the Company under the Purchase Contracts constituting a part of such
Corporate Units, in substitution for the Pledged Debentures. 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 Debentures
as provided in Articles 2, 3, 4, 5 and 6, and any reference herein to the
Debentures shall be deemed to be reference to such Treasury Portfolio, and any
reference herein to interest on the Debentures shall be deemed to be a reference
to distributions on such Treasury Portfolio.
SECTION 6.3 Initial Remarketing. The Collateral Agent shall, by
10:00 a.m., New York City time, on the fourth Business Day immediately preceding
____________, 2003, without any instruction from any Holder of Corporate Units,
present the related Pledged Debentures to the Remarketing Agent for remarketing.
Upon receiving such Pledged Debentures, the Remarketing Agent, pursuant to the
terms of the Remarketing Agreement and the Supplemental Remarketing Agreement,
will use its reasonable efforts to remarket such Pledged Debentures on such date
at a price of approximately 100.5% (but not less than 100%) of the Treasury
Portfolio Purchase Price. After deducting as the Remarketing Fee an amount not
exceeding 25 basis points (.25%) of the Treasury Portfolio Purchase Price from
any amount of such Proceeds in excess of the Treasury Portfolio Purchase Price,
the Remarketing Agent will remit the entire amount of the Proceeds of such
remarketing to the Collateral Agent on or prior to 12:00 p.m., New York City
time, by check or wire transfer in immediately available funds at such place and
at such account as may be designated by the Collateral Agent in exchange for the
Pledged Debentures. In the event the Collateral Agent receives such Proceeds,
the Collateral Agent will, at the written direction of the Company, apply an
amount equal to the Treasury Portfolio Purchase Price to purchase from the
Quotation Agent the Treasury Portfolio and promptly remit the remaining portion
of such Proceeds to the Purchase Contract Agent for payment to the Holders of
Corporate Units. The Collateral Agent shall Transfer the Treasury Portfolio to
the Collateral Account to secure the obligation of
19
23
all Holders of Corporate Units to purchase Common Stock of the Company under the
Purchase Contracts constituting a part of such Corporate Units, in substitution
for the Pledged Debentures. 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 Debentures as provided in Articles
2, 3, 4, 5 and 6, and any reference herein to the Debentures shall be deemed to
be reference to such Treasury Portfolio, and any reference herein to interest on
the Debentures shall be deemed to be a reference to distributions on such
Treasury Portfolio.
SECTION 6.4 Substitutions Whenever a Holder has the right to
substitute Treasury Securities, Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, for Collateral
held by the Collateral Agent, such substitution shall not constitute a novation
of the security interest created hereby.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.1 Representations and Warranties The Holders from time
to time, acting through the Purchase Contract Agent as their attorney-in-fact
(it being understood that the Purchase Contract Agent shall not be liable for
any representation or warranty made by or on behalf of a Holder), hereby
represent and warrant to the Collateral Agent, which representations and
warranties shall be deemed repeated on each day a Holder Transfers Collateral
that:
(a) such Holder has the power to grant a security interest in and
lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and,
in the case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under Article 2
hereof;
(c) upon the Transfer of the Collateral to the Collateral Account,
the Collateral Agent, for the benefit of the Company, will have a valid and
perfected first priority security interest therein (assuming that any central
clearing operation or any Intermediary or other entity not within the control of
the Holder involved in the Transfer of the Collateral, including the Collateral
Agent, gives the notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the establishment
and exercise of control pursuant to Section 2.2 hereof); and
(d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security interest,
lien or other
20
24
encumbrance on the Collateral other than the security interest and lien granted
under Article 2 hereof or violate any provision of any existing law or
regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.
SECTION 7.2 Covenants The Holders from time to time, acting
through the Purchase Contract Agent as their attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any covenant
made by or on behalf of a Holder), hereby covenant to the Collateral Agent that
for so long as the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will create
or purport to create or allow to subsist any mortgage, charge, lien, pledge or
any other security interest whatsoever over the Collateral or any part of it
other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the pledge hereunder,
transferred in connection with the Transfer of the Securities.
ARTICLE VIII
THE COLLATERAL AGENT
It is hereby agreed as follows:
SECTION 8.1 Appointment, Powers and Immunities The Collateral
Agent shall act as Agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. Each of
the Collateral Agent, the Custodial Agent and the Securities Intermediary: (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants or obligations shall be inferred from
this Agreement against any of them, nor shall any of them be bound by the
provisions of any agreement beyond the specific terms hereof; (b) shall not be
responsible for any recitals contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by it under, this
Agreement, the Securities or the Purchase Contract Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement (other than as against the Collateral Agent), the Securities or the
Purchase Contract Agreement or any other document referred to or provided for
herein or therein or for any failure by the Company or any other Person (except
the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be) to perform any of its obligations hereunder or thereunder or for
the perfection, priority or, except as expressly required hereby, maintenance of
any security interest created hereunder; (c) shall not be required to initiate
or conduct any litigation or collection proceedings hereunder (except in the
case of the Collateral
21
25
Agent, pursuant to directions furnished under Section 8.2 hereof, subject to
Section 8.6 hereof); (d) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith or therewith,
except for its own negligence, bad faith or willful misconduct; (e) shall not be
required to advise any party as to selling or retaining, or taking or refraining
from taking any action with respect to, the Securities or other property
deposited hereunder; and (f) shall not be responsible for the acts or omissions
of any clearing corporation with whom collateral is deposited. Subject to the
foregoing, during the term of this Agreement, the Collateral Agent shall take
all reasonable action in connection with the safekeeping and preservation of the
Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent, 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. Notwithstanding the foregoing, the Collateral Agent, the
Custodial Agent, the Purchase Contract Agent and Securities Intermediary, each
in its individual capacity, hereby waive any right of setoff, bankers lien,
liens or perfection rights as securities intermediary or any counterclaim with
respect to any of the Collateral.
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 be adequately indemnified as provided herein.
Nothing in this Section 8.2 shall impair the right of the Collateral Agent in
its discretion to take any action or omit to take any action which it deems
proper and which is not inconsistent with such direction.
SECTION 8.3 Reliance Each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent shall be entitled conclusively to rely
upon any certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be. As to
any matters not expressly
22
26
provided for by this Agreement, the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall in all cases be fully protected in acting, or
in refraining from acting, hereunder in accordance with instructions given by
the Company in accordance with this Agreement.
SECTION 8.4 Rights in other Capacities The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any Holder of
Securities and any holder of separate Debentures (and any of their respective
subsidiaries or affiliates) as if it were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary and their
affiliates may accept fees and other consideration from the Purchase Contract
Agent, any Holder of Securities or any holder of separate Debentures without
having to account for the same to the Company; provided that each of the
Securities Intermediary, the Custodial Agent and the Collateral Agent covenants
and agrees with the Company that it shall not accept, receive or permit there to
be created in favor of itself and 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
be segregated or the books and records of the Collateral Agent and not
commingled with any other assets of any such Person.
SECTION 8.5 Non-Reliance None of the Securities Intermediary,
the Custodial Agent or the Collateral Agent shall be required to keep itself
informed as to the performance or observance by the Purchase Contract Agent or
any Holder of Securities of this Agreement, the Purchase Contract Agreement, the
Securities or any other document referred to or provided for herein or therein
or to inspect the properties or books of the Purchase Contract Agent or any
Holder of Securities. The Collateral Agent, 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 Securities or any holder of separate Debentures (or any of their
respective subsidiaries or affiliates) that may come into the possession of the
Collateral Agent, the Custodial Agent or the Securities Intermediary or any of
their respective affiliates.
SECTION 8.6 Compensation and Indemnity The Company agrees: (i)
to pay each of the Collateral Agent and the Custodial Agent from time to time
such compensation as shall be agreed in writing between the Company and the
Collateral Agent or the Custodial Agent, as the case may be, for all services
rendered by each of them hereunder and (ii) to indemnify the Collateral Agent,
the Custodial Agent and the Securities Intermediary for, and to hold each of
them harmless from and against, any loss, liability or reasonable out-of-pocket
expense incurred without negligence, willful misconduct or bad faith on its
part, arising out of or in connection
23
27
with the acceptance or administration of its powers and duties under this
Agreement, including the reasonable out-of-pocket costs and expenses (including
reasonable fees and expenses of counsel) of defending itself against any claim
or liability in connection with the exercise or performance of such powers and
duties. 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, and no such claim shall be settled
without the written consent of the Company, which consent shall not be
unreasonably withheld.
SECTION 8.7 Failure to Act In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent and the Custodial Agent shall
be entitled, after prompt notice to the Company and the Purchase Contract Agent,
at its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and neither the Collateral Agent nor the Custodial
Agent 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 and the Custodial Agent shall be entitled to
refuse to act until either (i) such conflicting or adverse claims or demands
shall have been finally determined by a court of competent jurisdiction or
settled by agreement between the conflicting parties as evidenced in a writing,
satisfactory to the Collateral Agent or the Custodial Agent, as the case may be,
or (ii) the Collateral Agent or the Custodial Agent, as the case may be, shall
have received security or an indemnity reasonably satisfactory to the Collateral
Agent or the Custodial Agent, as the case may be, sufficient to save the
Collateral Agent or the Custodial Agent, as the case may be, harmless from and
against any and all loss, liability or reasonable out-of-pocket expense which
the Collateral Agent or the Custodial Agent, as the case may be, may incur by
reason of its acting without bad faith, willful misconduct or negligence. The
Collateral Agent or the Custodial Agent may in addition elect to commence an
interpleader action or seek other judicial relief or orders as the Collateral
Agent or the Custodial Agent, as the case may be, may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor the Custodial Agent shall be required to take any action
that is in its opinion contrary to law or to the terms of this Agreement, or
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 or Custodial Agent as provided below,
(a) the Collateral Agent and the Custodial Agent may resign at any time by
giving notice thereof to the Company and the Purchase Contract Agent as
attorney-in-fact for the Holders of Securities, (b) the Collateral Agent and the
Custodial Agent may be removed at any time by the Company and (c) if the
Collateral Agent or the Custodial Agent fails to perform any of its material
obligations hereunder in any material
24
28
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 or the Custodial Agent may be removed by the
Purchase Contract Agent. The Purchase Contract Agent shall promptly notify the
Company of any removal of the Collateral Agent pursuant to clause (c) of the
immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent or
Custodial Agent, as the case may be. If no successor Collateral Agent or
Custodial Agent, as the case may be, shall have been so appointed and shall have
accepted such appointment within 30 days after the retiring Collateral Agent's
or Custodial Agent's giving of notice of resignation or such removal, then the
retiring Collateral Agent or Custodial Agent, as the case may be, may petition
any court of competent jurisdiction for the appointment of a successor
Collateral Agent or Custodial Agent, as the case may be. Each of the Collateral
Agent and the Custodial Agent shall be a bank which has an office in New York,
New York with a combined capital and surplus of at least $75,000,000. Upon the
acceptance of any appointment as Collateral Agent or Custodial Agent, as the
case may be, hereunder by a successor Collateral Agent or Custodial Agent, as
the case may be, such successor shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent or Custodial Agent, as the case may be, and the retiring Collateral Agent
or Custodial Agent, as the case may be, shall take all appropriate action to
transfer any money and property held by it hereunder (including the Collateral)
to such successor. The retiring Collateral Agent or Custodial Agent shall, upon
such succession, be discharged from its duties and obligations as Collateral
Agent or Custodial Agent hereunder. After any retiring Collateral Agent's or
Custodial Agent's resignation hereunder as Collateral Agent or Custodial Agent,
the provisions of this Article 8 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Collateral Agent or Custodial Agent. 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.
SECTION 8.9 Right to Appoint Agent or Advisor The Collateral
Agent shall have the right to appoint agents or advisors in connection with any
of its duties hereunder, and the Collateral Agent shall not be liable for any
action taken or omitted by, or in reliance upon the advice of, such agents or
advisors selected in good faith. The appointment of agents pursuant to this
Section 8.9 shall be subject to prior consent of the Company, which consent
shall not be unreasonably withheld.
SECTION 8.10 Survival The provisions of this Article 8 shall
survive termination of this Agreement and the resignation or removal of the
Collateral Agent or the Custodial Agent.
SECTION 8.11 Exculpation Anything in this Agreement to the
contrary notwithstanding, in no event shall any of the Collateral Agent, the
Custodial Agent or the Securities Intermediary or their officers, employees or
agents be liable
25
29
under this Agreement to any third party for indirect, special, punitive, or
consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent, the Custodial Agent or the Securities Intermediary, or any of them,
incurred without any act or deed that is found to be attributable to gross
negligence or willful misconduct on the part of the Collateral Agent, the
Custodial Agent or the Securities Intermediary.
ARTICLE IX
AMENDMENT
SECTION 9.1 Amendment Without Consent of Holders Without the
consent of any Holders or the holders of any Separate Debentures, the Company,
the Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
for any of the following purposes:
(a) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the
Company; or
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company so long as such covenants or such surrender do not adversely
affect the validity, perfection or priority of the security interests
granted or created hereunder; or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or
Purchase Contract Agent; or
(d) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such
provisions herein, or to make any other provisions with respect to such
matters or questions arising under this Agreement, provided such action
shall not adversely affect the interests of the Holders.
SECTION 9.2 Amendment with Consent of Holders With the consent
of the Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the
26
30
Holders in respect of the Securities; provided, however, that no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(a) change the amount or type of Collateral underlying a
Security (except for the rights of holders of Corporate Units to
substitute the Treasury Securities for the Pledged Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, or the rights of Holders of Treasury Units to
substitute Debentures or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as applicable, for the Pledged Treasury
Securities), impair the right of the Holder of any Security to receive
distributions on the underlying Collateral or otherwise adversely
affect the Holder's rights in or to such Collateral; or
(b) otherwise effect any action that would require the consent
of the Holder of each Outstanding Security affected thereby pursuant to
the Purchase Contract Agreement if such action were effected by an
agreement supplemental thereto;
(c) reduce the amount payable or distributable to Holders
upon the remarketing of Debentures; or
(d) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment.
If any amendment referred to above would adversely affect only the Corporate
Units or the Treasury Units, then only the affected class of Holders shall be
entitled to vote on the amendment and the amendment shall not be effective
except with the consent of the Holders of not less than a majority of the
affected class. It shall not be necessary for any Act of Holders under this
Article 9 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 be entitled to
receive and (subject to Section 8.1 hereof, with respect to the Collateral
Agent, and Section 7.1 of the Purchase Contract Agreement, with respect to the
Purchase Contract Agent) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and that all conditions precedent, if any, to the execution
and delivery of such amendment have been satisfied. All amendments must be in
writing, signed by all parties to this Agreement.
SECTION 9.4 Effect of Amendments Upon the execution of any
amendment under this Article 9, this Agreement shall be modified in accordance
27
31
therewith, and such amendment shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered under the
Purchase Contract Agreement shall be bound thereby.
SECTION 9.5 Reference to Amendments Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Article 9 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
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement and without charge or expense
to Holders in exchange for Outstanding Security Certificates.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 No Waiver To the extent permitted by law, 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. To the extent permitted by law, the
remedies herein are cumulative and are not exclusive of any remedies provided by
law.
SECTION 10.2 Governing Law THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without
limiting the foregoing, the above choice of law is expressly agreed to by the
Securities Intermediary, the Collateral Agent and the Holders from time to time
acting through the Purchase Contract Agent, as their attorney-in-fact, in
connection with the establishment and maintenance of the Collateral Account. The
Company, the Collateral Agent and the Holders from time to time of the
Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Company, the Collateral Agent and the Holders from time to time of
the Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought
28
32
in such a court and any claim that any such proceeding brought in such a court
has been brought in an inconvenient forum, as well as to trial by jury.
SECTION 10.3 Notices All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
SECTION 10.4 Successors and Assigns This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Company, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent, and the Holders from time to time
of the Securities, by their acceptance of the same, shall be deemed to have
agreed to be bound by the provisions hereof and to have ratified the agreements
of, and the grant of the Pledge hereunder by, the Purchase Contract Agent.
SECTION 10.5 Counterparts This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
SECTION 10.6 Severability If any provision hereof is invalid
and unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be construed in order to carry out the intentions of
the parties hereto as nearly as may be possible and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
SECTION 10.7 Expenses, etc. The Company agrees to reimburse the
Collateral Agent and the Custodial Agent for: (a) all reasonable out-of-pocket
costs and expenses of the Collateral Agent and the Custodial Agent (including,
without limitation, the reasonable fees and expenses of counsel to the
Collateral Agent and the Custodial Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
29
33
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
SECTION 10.8 Security Interest Absolute All rights of the
Collateral Agent and security interests hereunder, and all obligations of the
Holders from time to time hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the obligations
of Holders of Securities under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
30
34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
NRG ENERGY, INC.
By:
____________________________________
Name:
Title:
Address for Notices:
NRG Energy, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
______________________________________,
as Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By:
____________________________________
Name:
Title:
Address for Notices:
[______________________
_______________________
_______________________
New York, NY _________]
Attention: ______________
Telecopy: ______________
31
35
[__________________________],
as Collateral Agent, Custodial Agent
and as Securities Intermediary
By:__________________
Name:
Title:
Address for Notices:
[_______________________
________________________
________________________]
Attention: [Corporate Trust
Administration]
Telecopy: _______________
32
36
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL
AGENT
[Collateral Agent]
Re: NRG Energy, Inc. (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of
the Pledge Agreement, dated as of ___, 2001, (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [CORPORATE UNITS] [TREASURY UNITS] from time to time, that
the holder of the Securities listed below (the "Holder") has elected to
substitute $_____ [aggregate principal amount of Treasury Securities] [aggregate
principal amount of Debentures or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be,] in exchange for an equal Value
of [Pledged Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be,] [Pledged Treasury Securities] held by
you in accordance with the Pledge Agreement and has delivered to us a notice
stating that the Holder has Transferred [Treasury Securities] [Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] to you, as Collateral Agent. We hereby instruct you, upon receipt of
such [Pledged Treasury Securities] [Pledged Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,],
and upon the payment by such Holder of any applicable fees, to release the
[Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to such [Corporate
Units] [Treasury 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:_____________ [Purchase Contract Agent]
By:_________________________________
Name:
Title:
Signature Guarantee:________________
33
37
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] for the [Pledged
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities]:
___________________________ __________________________________
Name Social Security or other Taxpayer
Identification Number, if any
___________________________
Address
___________________________
___________________________
34
38
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
[Purchase Contract Agent]
Re: Equity Units of NRG Energy, Inc. (the "Company")
The undersigned Holder hereby notifies you that it has
delivered to [The Chase Manhattan Bank], as Collateral Agent, [$_______
aggregate principal amount of Treasury Securities] [$_____aggregate principal
amount of Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, the case may be,] in exchange for an equal Value of [Pledged
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities] held by the
Collateral Agent, in accordance with Section [4.1][4.2] of the Pledge Agreement,
dated ______, 2001 (the "Pledge Agreement"), between you, the Company and the
Collateral Agent. The undersigned Holder has paid the Collateral Agent all
applicable fees relating to such exchange. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio] [Pledged Treasury Securities]
related to such [Corporate Units] [Treasury Units]. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.
Dated:_____________ _________________________
Signature
Signature Guarantee:________________________
35
39
Please print name and address of Registered Holder:
_________________________ ___________________________
Name Social Security or other
Taxpayer Identification
_________________________ Number, if any
Address
_________________________
_________________________
_________________________
36
40
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
[Custodial Agent]
Re: Debentures of NRG Energy, Inc. (the "Company")
The undersigned hereby notifies you in accordance with Section
4.6(c) of the Pledge Agreement, dated as of ______________, 2001 (the "Pledge
Agreement"), among the Company, yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent, and _______________, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Corporate Units and Treasury
Units from time to time, that the undersigned elects to deliver $ aggregate
principal amount of Debentures for delivery to the Remarketing Agent on the
Business Day immediately preceding the [Initial Remarketing Date] [Secondary
Remarketing Date] for remarketing pursuant to Section 4.6(c) of the Pledge
Agreement. The undersigned will, upon request of the Remarketing Agent, execute
and deliver any additional documents deemed by the Remarketing Agent or by the
Company to be necessary or desirable to complete the sale, assignment and
transfer of the Debentures tendered hereby.
The undersigned hereby instructs you, upon receipt of the
Proceeds of such remarketing from the Remarketing Agent to deliver such Proceeds
to the undersigned in accordance with the instructions indicated herein under
"A. Payment Instructions". The undersigned hereby instructs you, in the event of
Failed [Initial] [Secondary] Remarketing, upon receipt of the Debentures
tendered herewith from the Remarketing Agent, to be delivered to the person(s)
and the address(es) indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and
warrants that the undersigned has full power and authority to tender, sell,
assign and transfer the Debentures tendered hereby and that the undersigned is
the record owner of any Debentures tendered herewith in physical form or a
participant in The Depositary Trust Company ("DTC") and the beneficial owner of
any Debentures tendered herewith by book-entry transfer to your account at DTC
and (ii) agrees to be bound by the terms and conditions of Section 4.6(c) of the
Pledge Agreement. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.
37
41
Date:_____________
____________________________________
By:_________________________________
Name:
Title:
Signature Guarantee:________________
Please print name and address:
_________________________ ___________________________
Name Social Security or other
Taxpayer Identification
_________________________ Number, if any
Address
_________________________
_________________________
_________________________
38
42
--------------------------------------------------------------------------------
A. PAYMENT INSTRUCTIONS
--------------------------------------------------------------------------------
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
--------------------------------------------------------------------------------
Name(s)
--------------------------------------------------------------------------------
(Please Print)
Address
(Please Print)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Zip Code)
--------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
--------------------------------------------------------------------------------
B. DELIVERY INSTRUCTIONS
--------------------------------------------------------------------------------
In the event of a failed remarketing, Debentures which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.
Name(s)
--------------------------------------------------------------------------------
(Please Print)
Address
(Please Print)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Zip Code)
--------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
In the event of a failed remarketing, Debentures which are in book-entry form
should be credited to the account at The Depositary Trust Company set forth
below.
------------------
DTC Account Number
Name of Account Party:
---------------------------------
39
43
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
[Custodial Agent]
Re: Debentures of NRG Energy, Inc. (the "Company")
The undersigned hereby notifies you in accordance with Section
4.6(c) of the Pledge Agreement, dated as of __, 2001 (the "Pledge Agreement")
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and [_____________________], as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from time
to time, that the undersigned elects to withdraw the $_____ aggregate principal
amount of Debentures delivered to the Custodial Agent on ___, 2001 for
remarketing pursuant to Section 4.6(c) of the Pledge Agreement. The undersigned
hereby instructs you to return such Debentures to the undersigned in accordance
with the undersigned's instructions. With this notice, the Undersigned hereby
agrees to be bound by the terms and conditions of Section 4.6(c) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
Date:_____________
____________________________________
By:
_________________________________
Name:
Title:
Signature Guarantee:________________
40
44
Please print name and address:
_________________________ ___________________________
Name Social Security or other
Taxpayer Identification
_________________________ Number, if any
Address
_________________________
_________________________
_________________________
41
