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EXHIBIT 2
LINCOLN NATIONAL CORPORATION
THE CHASE MANHATTAN BANK,
AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS PURCHASE CONTRACT AGENT
FORM OF PLEDGE AGREEMENT
DATED AS OF AUGUST __, 1998
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TABLE OF CONTENTS
PAGE
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RECITALS.................................................................................................2
Section 1. Definitions............................................................................3
Section 2. Pledge; Control and Perfection.........................................................7
Section 2.1. The Pledge....................................................................7
Section 2.2. Control and Perfection........................................................9
Section 3. Distributions on Pledged Collateral...................................................11
Section 4. Substitution, Release, Repledge and Settlement of Preferred Securities................12
Section 4.1. Substitution for Preferred Securities and
the Creation of Growth PRIDES................................................12
Section 4.2. Substitution of Treasury Securities and the Creation of
Income PRIDES................................................................13
Section 4.3. Termination Event............................................................14
Section 4.4. Cash Settlement..............................................................15
Section 4.5. Early Settlement.............................................................16
Section 4.6. Application of Proceeds Settlement...........................................17
Section 5. Voting Rights -- Preferred Securities.................................................19
Section 6. Rights and Remedies; Distribution of the Debentures; Tax Event
Redemption............................................................................20
Section 6.1. Rights and Remedies of the Collateral Agent..................................20
Section 6.2. Distribution of the Debentures; Investment Company Event;
Tax Event Redemption........................................................21
Section 6.3. Substitutions................................................................22
Section 7. Representations and Warranties; Covenants.............................................22
Section 7.1. Representations and Warranties...............................................22
Section 7.2. Covenants....................................................................23
Section 8. The Collateral Agent..................................................................24
Section 8.1. Appointment, Powers and Immunities...........................................24
Section 8.2. Instructions of the Company..................................................25
Section 8.3. Reliance by Collateral Agent.................................................25
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 8.4. Rights in Other Capacities...................................................25
Section 8.5. Non-Reliance on Collateral Agent.............................................26
Section 8.6. Compensation and Indemnity...................................................26
Section 8.7. Failure to Act...............................................................27
Section 8.8. Resignation of Collateral Agent..............................................27
Section 8.9. Right to Appoint Agent or Advisor............................................28
Section 8.10. Survival.....................................................................28
Section 8.11. Exculpation..................................................................28
Section 9. Amendment.............................................................................29
Section 9.1. Amendment Without Consent of Holders.........................................29
Section 9.2. Amendment with Consent of Holders............................................29
Section 9.3. Execution of Amendments......................................................30
Section 9.4. Effect of Amendments.........................................................30
Section 9.5. Reference to Amendments......................................................30
Section 10. Miscellaneous.........................................................................31
Section 10.1. No Waiver....................................................................31
Section 10.2. Governing Law................................................................31
Section 10.3. Notices......................................................................31
Section 10.4. Successors and Assigns.......................................................32
Section 10.5. Counterparts.................................................................32
Section 10.6. Severability.................................................................32
Section 10.7. Expenses, etc................................................................32
Section 10.8. Security Interest Absolute...................................................33
EXHIBIT A INSTRUCTION TO COLLATERAL AGENT..............................................................35
EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT.......................................................37
EXHIBIT C INSTRUCTION TO CUSTODIAL AGENT REGARDING
REMARKETING..................................................................................38
EXHIBIT D INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING..................................................................41
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FORM OF PLEDGE AGREEMENT
FORM OF PLEDGE AGREEMENT, dated as of August __, 1998 (this
"Agreement"), among Lincoln National Corporation, an Indiana corporation (the
"Company"), The Chase Manhattan Bank, 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 The First National Bank of
Chicago, 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 herein after defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement, dated as of the date hereof (as modified and supplemented
and in effect from time to time, the "Purchase Contract Agreement"), pursuant to
which there may be issued up to 10,000,000 FELINE PRIDES of the Company, having
a stated amount of $25 (the "Stated Amount") per FELINE PRIDES.
The FELINE PRIDES will initially consist of (A) ______ units (referred
to as "Income PRIDES") with a face amount, per Income PRIDES, equal to the
Stated Amount and (B) _____ units (referred to as "Growth PRIDES" and, together
with the Income PRIDES, the "Securities") with a face amount, per Growth PRIDES,
equal to the Stated Amount. Each Income PRIDES will initially be comprised of
(a) a stock purchase contract (the "Purchase Contract") under which (i) the
holder will purchase from the Company not later than ____________, 2001 (the
"Purchase Contract Settlement Date"), for an amount of cash equal to the Stated
Amount, a number of shares of common stock, no par value per share (the "Common
Stock"), of the Company equal to the Settlement Rate (as defined below), and
(ii) the Company will pay to the Holder unsecured contract adjustment payments
("Contract Adjustment Payments"), if any, at the rate of ____% of the Stated
Amount per annum and (b) either beneficial ownership of a Preferred Security (as
defined below) or upon the occurrence of a Tax Event Redemption (as defined
herein) prior to the Purchase Contract Settlement Date, the Applicable Ownership
Interest of the Treasury Portfolio (as defined below). Each Growth PRIDES will
initially be comprised of (a) a Purchase Contract under which (i) the holder
will purchase from the Company not later than the Purchase Contract Settlement
Date, for an amount in cash equal to the Stated Amount, a number of shares of
Common Stock of the Company, equal to the Settlement Rate, and (ii) the Company
will pay the Holder Contract Adjustment Payments, if any, at the rate of ___% of
the Stated Amount per annum, and (b) a 1/40 undivided beneficial interest in a
zero-coupon U.S. Treasury
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Security (CUSIP No. _______) having a principal amount equal to $1,000 and
maturing on _________, 2001 (the "Treasury Securities").
Pursuant to the terms of the Trust Agreement (as defined below),
Lincoln National Capital IV, a statutory business trust formed under the laws of
the State of Delaware (the "Trust") will issue _________ ___% Preferred
Securities, Series D (the "Preferred Securities") having a stated liquidation
value equal to the Stated Amount.
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Preferred
Securities, any Applicable Ownership Interest in the Treasury Portfolio and any
Treasury Securities delivered in exchange therefor to secure each Holder's
obligations under the related Purchase Contract, as provided herein and subject
to the terms hereof. Upon such pledge, the Preferred Securities will be
beneficially owned by the Holders but will be owned of record by the Purchase
Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, 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:
SECTION 1. DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in
the Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board
Resolution,(iv) Cash Settlement, (v) Certificate, (vi) Contract
Adjustment Payments,(vii) Debentures, (viii) Early Settlement, (ix)
Early Settlement Amount, (x) Early Settlement Date, (xi) Failed
Remarketing, (xii) Holder, (xiii) Opinion of Counsel, (xiv) Outstanding
Securities, (xv) Remarketing Agent,(xvi) Remarketing Agreement, (xvii)
Settlement Rate, and (xviii) Termination Event; and
(d) the following terms have the meanings as signed to them in
the Amened and Restated Trust Agreement: (i) Applicable Principal
Amount, (ii) Investment Company Event, (iii) Primary Treasury Dealer,
(iv) Property Trustee, (v) Quotation Agent, (vi) Redemption Amount,
(vii) Redemption Price, (viii) Tax Event, (ix) Tax
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Event Redemption, (x) Tax Event Redemption Date, (xi) Treasury
Portfolio, (xii) Treasury Portfolio Purchase Price.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Ownership Interest" means, with respect to an Income PRIDES
and the U.S. Treasury Securities in the Treasury Portfolio, (A) a 1/40, or 2.5%,
undivided beneficial ownership interest in a $1,000 principal or interest amount
of a principal or interest strip in a U.S. Treasury Security included in such
Treasury Portfolio which matures on or prior to ________, 2001 and (B) for each
scheduled interest payment date on the Debentures that occurs after the Tax
Event Redemption Date, a ____% undivided beneficial ownership interest in a
$1,000 face amount of such U.S. Treasury Security which is a principal or
interest strip maturing on such date.
"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 The Chase Manhattan Bank in the name "The First National Bank of
Chicago, as Purchase Contract Agent on behalf of the holders of certain
securities of Lincoln National Capital IV, Collateral Account subject to the
security interest of The Chase Manhattan Bank, as Collateral Agent, for the
benefit of Lincoln National Corporation, 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.
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"Custodial Agent" has the meaning specified in the Recitals.
"Debenture Trustee" means The First National Bank of Chicago, as
trustee under the Junior Subordinated Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"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, or if not rated, of a similar
quality as determined by the Collateral Agent.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Preferred Securities" has the meaning specified in Section 2.1
hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Preferred Securities" has the meaning specified in the Recitals.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in xx.xx. 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, collection or disposition of the Collateral or any
proceeds thereof.
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"Purchase Contract" has the meaning specified in the Recitals.
"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.
"Remarketing Underwriting Agreement" means the Remarketing Underwriting
Agreement attached as Exhibit A to the Remarketing Agreement.
"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 Preferred Securities" means any Preferred Securities that are
not Pledged Preferred Securities.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance with
the instructions of the Collateral Agent, the Purchase Contract Agent or the
Holder, as applicable:
(i) in the case of Collateral consisting of securities which
cannot be delivered by book-entry or which the parties agree
are to be delivered in physical form, delivery in appropriate
physical form to the recipient accompanied by any duly
executed instruments of transfer, assignments in blank,
transfer tax stamps and any other documents necessary to
constitute a legally valid transfer to the recipient;
(ii) in the case of Collateral consisting of securities maintained
in book-entry form by causing a "securities intermediary" (as
defined in Section 8-102(a)(14) of
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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 Security" has the meaning specified in the Recitals.
"Trust" has the meaning specified in the Recitals.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated
as of ___________, 1998, among the Company as depositor, the trustees named
therein and the holders from time to time of undivided beneficial interests in
the assets of the Trust.
"Value" with respect to any item of Collateral on any date means, as to
(i) a Preferred Security, the Stated Amount, (ii) Cash, the face amount thereof
and (iii) Treasury Securities, the aggregate principal amount thereof at
maturity.
SECTION 2. PLEDGE; CONTROL AND PERFECTION.
SECTION 2.1. THE PLEDGE. The Holders from time to time acting through
the Purchase Contract Agent, as their attorney-in-fact, and the Purchase
Contract Agent, as such attorney-in-fact, hereby pledge and grant to the
Collateral Agent, for the benefit of the Company, as collateral security for the
performance when due by such Holders of their respective obligations under the
related Purchase Contracts, a security interest in all of the right, title and
interest of the Purchase Contract Agent and such Holders (a) in the Preferred
Securities and Treasury Securities constituting a part of the Securities and any
Treasury Securities delivered in exchange for any Preferred Securities, and any
Preferred Securities delivered in exchange for any Treasury Securities, in
accordance with Section 4 hereof, in each case that have been Transferred to or
received by the Collateral Agent and not released by the Collateral Agent to
such Holders under the provisions of this Agreement; (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 any Debentures delivered to the
Collateral Agent upon the occurrence of an Investment Company Event or a
liquidation of the Trust as provided in Section 6.2; (e) in the Treasury
Portfolio purchased on behalf of the Holders of Income PRIDES by the Collateral
Agent upon the occurrence of a Tax Event Redemption as provided in Section 6.2
and (f) all Proceeds of the foregoing (all of the foregoing, collectively, the
"Collateral"). 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 Preferred Securities comprising a part of the Income
PRIDES, and the Treasury Securities comprising a part of the Growth PRIDES, to
be Transferred to the Collateral Agent for the benefit of the Company. Such
Preferred Securities shall be
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Transferred by physically delivering such Securities to the Securities
Intermediary indorsed in blank and causing the Securities Intermediary to credit
the Collateral Account with such Securities and sending the Collateral Agent a
confirmation of the deposit of such Securities. In the event a Holder of Income
PRIDES so elects, such Holder may Transfer Treasury Securities to the Collateral
Agent for the benefit of the Company in exchange for the release by the
Collateral Agent on behalf of the Company of Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, with an aggregate stated liquidation amount equal to the aggregate
principal amount of the Treasury Securities so Transferred, in the case of
Preferred Securities, or with an appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio equal to the aggregate principal amount of the Treasury Securities so
transferred, in the event that a Tax Event Redemption has occurred, to the
Purchase Contract Agent on behalf of such Holder. Treasury Securities and the
Treasury Portfolio, as applicable, shall be Transferred to the Collateral
Account maintained by the Collateral Agent at the Securities Intermediary by
book-entry transfer to the Collateral Account in accordance with the TRADES
Regulations and other applicable law and by the notation by the Securities
Intermediary on its books that a Security Entitlement with respect to such
Treasury Securities or Treasury Portfolio, has been credited to the Collateral
Account. For purposes of perfecting the Pledge under applicable law, including,
to the extent applicable, the TRADES Regulations 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 Preferred
Securities (or the Debentures that are delivered pursuant to Section 6.2 hereof)
or Treasury Securities subject to the Pledge, excluding any Preferred Securities
(or the Debentures that are delivered pursuant to Section 6.2 hereof) or
Treasury Securities released from the Pledge as provided in Section 4 hereof,
are hereinafter referred to as "Pledged Preferred Securities" or the "Pledged
Treasury Securities," respectively. Subject to the Pledge and the provisions of
Section 2.2 hereof, the Holders from time to time shall have full beneficial
ownership of the Collateral. Whenever directed by the Collateral Agent acting on
behalf of the Company, the Securities Intermediary shall have the right to
reregister the Preferred Securities or any other Securities held in physical
form in its name.
Except as may be required in order to release Preferred Securities in
connection with a Holder's election to convert its investment from an Income
PRIDES to a Growth PRIDES, or except as otherwise required to release Securities
as specified herein, neither the Collateral Agent nor the Securities
Intermediary shall relinquish physical possession of any certificate evidencing
a Preferred Security prior to the termination of this Agreement. If it becomes
necessary for the Securities Intermediary to relinquish physical possession of a
certificate in order to release a portion of the Preferred Securities evidenced
thereby from the Pledge, the Securities Intermediary shall use its best efforts
to obtain physical possession of a replacement certificate evidencing any
Preferred Securities remaining subject to the Pledge hereunder registered to it
or endorsed in blank within 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.
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SECTION 2.2. CONTROL AND PERFECTION. (a) In connection with the Pledge
granted in Section 2.1, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, hereby authorize and direct the Securities Intermediary
(without the necessity of obtaining the further consent of the Purchase Contract
Agent or any of the Holders), and the Securities Intermediary agrees, to comply
with and follow any instructions and entitlement orders (as defined in Section
8-102(a)(8) of the Code) that the Collateral Agent on behalf of the Company may
give in writing with respect to the Collateral Account, the Collateral credited
thereto and any security entitlements with respect to any thereof. Such
instructions and entitlement orders may, without limitation, direct the
Securities Intermediary to transfer, redeem, sell, liquidate, assign, deliver or
otherwise dispose of the Preferred Securities, the Treasury Securities, the
Treasury Portfolio, and any Security Entitlements with respect thereto and to
pay and deliver any income, proceeds or other funds derived therefrom to the
Company. The Holders from time to time acting through the Purchase Contract
Agent hereby further authorize and direct the Collateral Agent, as Agent of the
Company, to itself issue instructions and entitlement orders, and to otherwise
take action, with respect to the Collateral Account, the Collateral credited
thereto and any security entitlements with respect thereto, pursuant to the
terms and provisions hereof, all without the necessity of obtaining the further
consent of the Purchase Contract Agent or any of the Holders. The Collateral
Agent shall be the Agent of the Company and shall act as directed in writing by
the Company. Without limiting the generality of the foregoing, the Collateral
Agent shall issue entitlement orders to the Securities Intermediary when and as
directed 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 Preferred Securities, 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
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Contract Agent purporting to limit or condition the obligation of the Securities
Intermediary to comply with entitlement orders as set forth in this Section 2.2
hereof.
(c) The Securities Intermediary hereby agrees that each item of
property (whether investment property, financial asset, security, instrument or
cash) credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorney-in-fact to take on behalf of, and in
the name, place and stead of the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such
power-of-attorney shall not be deemed to require of the Collateral Agent any
specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder.
SECTION 3. DISTRIBUTIONS ON PLEDGED COLLATERAL. So long as the Purchase
Contract Agent is the registered owner of the Pledged Preferred Securities, it
shall receive all payments thereon. If the Pledged Preferred Securities are
reregistered, such that the Collateral Agent becomes the registered holder, all
payments of the Stated Amount or, if applicable, the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, or cash distributions on, the Pledged Preferred
Securities or on the appropriate Applicable Ownership Interest (as specified in
clause (B) of the definition of such term) of the Treasury Portfolio, as the
case may be, and all payments of the principal of, or cash distributions on, any
Pledged Treasury Securities received by the Collateral Agent that are properly
payable hereunder shall be paid by the Collateral Agent by wire transfer in same
day funds:
(i) In the case of (A) cash distributions with respect to the
Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of
the Treasury Portfolio, as the case may be, and (B) any payments of the
Stated Amount or, if applicable, the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio with respect to any Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Purchase Contract Agent, for the benefit of
the relevant Holders of Securities, to the account designated by the
Purchase Contract Agent for such purpose, no later than 2:00 p.m., New
York City time, on the Business Day such payment is received by the
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
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Business Day, then such payment shall be made no later than 10:30 a.m.,
New York City time, on the next succeeding Business Day);
(ii) In the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Holders of the Growth PRIDES to the accounts
designated by them in writing for such purpose no later than 2:00 p.m.,
New York City time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment is received
by the Collateral Agent on a day that is not a Business Day or after
12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day); and
(iii) In the case of payments of the Stated Amount of any
Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio, as the case may be, or the principal of any
Pledged Treasury Securities, to the Company on the Purchase Contract
Settlement Date in accordance with the procedure set forth in Section
4.6(a) or 4.6(b) hereof, in full satisfaction of the respective
obligations of the Holders under the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein shall be
applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount or, if
applicable, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) on account of any Preferred Security
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
applicable, that, at the time of such payment, is a Pledged Preferred Security
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, or a Holder of a Growth PRIDES shall receive any payments of
principal on account of any Treasury Securities that, at the time of such
payment, are Pledged Treasury Securities, the Purchase Contract Agent or such
Holder shall hold the same as trustee of an express trust for the benefit of the
Company (and promptly deliver the same over to the Company) for application to
the obligations of the Holders under the related Purchase Contracts, and the
Holders shall acquire no right, title or interest in any such payments of Stated
Amount or principal so received.
SECTION 4. SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF PREFERRED
SECURITIES.
SECTION 4.1. SUBSTITUTION FOR PREFERRED SECURITIES AND THE CREATION OF
GROWTH PRIDES. At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (unless a Tax Event Redemption
has occurred), a Holder of Income PRIDES shall have the right to substitute
Treasury Securities for the Pledged Preferred Securities securing such Holder's
obligations under the Purchase Contract(s) comprising a part of its Income
PRIDES in integral multiples of 40 Income PRIDES by (a)
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Transferring to the Collateral Agent Treasury Securities having a Value equal to
the aggregate Stated Amount of the Pledged Preferred Securities to be released
and (b)(i) delivering to the Purchase Contract Agent cash in an amount equal to
the excess of the Contract Adjustment Payments, if any, that would have accrued
since the last date that Contract Adjustment Payments were made through the date
of substitution on the Growth PRIDES being created by the Holder, which amount
the Purchase Contract Agent shall promptly remit to the Company, and (ii)
delivering the related Income PRIDES to the Purchase Contract Agent, accompanied
by a notice, substantially in the form of Exhibit B hereto, to the Purchase
Contract Agent stating that such Holder has Transferred Treasury Securities to
the Collateral Agent pursuant to clause (a) above (stating the Value of the
Treasury Securities Transferred by such Holder) and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release from the Pledge the
Pledged Preferred Securities related to such Income PRIDES. The Purchase
Contract Agent shall instruct the Collateral Agent in the form provided in
Exhibit A; provided, however, that if a Tax Event Redemption has occurred and
the Treasury Portfolio has become a component of the Income PRIDES, Holders of
Income PRIDES may make such substitution only in integral multiples of 1,600,000
Income PRIDES at any time on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date. Upon receipt of Treasury
Securities from a Holder of Income PRIDES and the related instruction from the
Purchase Contract Agent, the Collateral Agent shall release the Pledged
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, and shall promptly Transfer such Pledged
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, free and clear of any lien, pledge or
security interest created hereby, to the Purchase Contract Agent. 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 CREATION OF
INCOME PRIDES. At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (unless a Tax Event Redemption
has occurred), a Holder of Growth PRIDES shall have the right to establish or
reestablish Income PRIDES consisting of the Purchase Contracts and Preferred
Securities in integral multiples of 40 Income PRIDES by (a) Transferring to the
Collateral Agent Preferred Securities having a Value equal to the Value of the
Pledged Treasury Securities to be released and (b) delivering the related Growth
PRIDES to the Purchase Contract Agent, accompanied by a notice, substantially in
the form of Exhibit B hereto, to the Purchase Contract Agent stating that such
Holder has transferred Preferred Securities to the Collateral Agent pursuant to
clause (a) above and requesting that the Purchase Contract Agent instruct the
Collateral Agent to release from the Pledge the Pledged Treasury Securities
related to such Growth PRIDES. The Purchase Contract Agent shall instruct the
Collateral Agent in the form provided in Exhibit A; provided, however, that if a
Tax Event Redemption has occurred and the Treasury Portfolio has become a
component of the Income PRIDES, Holders of Growth PRIDES may make such
substitution only in integral multiples of 1,600,000 Growth PRIDES, at any time
on or prior to the Business Day immediately preceding the Purchase
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Contract Settlement Date. Upon receipt of the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, from such Holder and the instruction from the Purchase Contract Agent,
the Collateral Agent shall release the Treasury Securities and shall promptly
Transfer such Treasury Securities, free and clear of any lien, pledge or
security interest created hereby, to the Purchase Contract Agent.
SECTION 4.3. TERMINATION EVENT. Upon receipt by the Collateral Agent of
written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall promptly Transfer any Pledged Preferred Securities (or
the Applicable Ownership Interest of the Treasury Portfolio if a Tax Event
Redemption has occurred) and Pledged Treasury Securities to the Purchase
Contract Agent for the benefit of the Holders of the Income PRIDES and the
Growth PRIDES, respectively, free and clear of any lien, pledge or security
interest or other interest created hereby.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Preferred Securities, the Treasury Portfolio or of the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3, the Purchase
Contract Agent shall (i) use its best efforts to obtain an opinion of a
nationally recognized law firm reasonably acceptable to the Collateral Agent to
the effect that, as a result of the Company's being the debtor in such a
bankruptcy case, the Collateral Agent will not be prohibited from releasing or
Transferring the Collateral as provided in this Section 4.3, and shall deliver
such opinion to the Collateral Agent within ten days after the occurrence of
such Termination Event, and if (y) the Purchase Contract Agent shall be unable
to obtain such opinion within ten days after the occurrence of such Termination
Event or (z) the Collateral Agent shall continue, after delivery of such
opinion, to refuse to effectuate the release and Transfer of all Pledged
Preferred Securities, 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 Preferred Securities, the
Treasury Portfolio or of the Pledged Treasury Securities, as the case may be, as
provided by this Section 4.3 or (ii) commence an action or proceeding like that
described in subsection (i)(z) hereof within ten days after the occurrence of
such Termination Event.
SECTION 4.4. CASH SETTLEMENT. (a) Upon receipt by the Collateral Agent
of (i) a notice from the Purchase Contract Agent promptly after the receipt by
the Purchase Contract Agent of such notice that a Holder of an Income PRIDES or
Growth PRIDES has elected, in accordance with the procedures specified in
Section 5.4(a)(i) or (d)(i) of the Purchase Contract Agreement, respectively, to
settle its Purchase Contract with Cash and (ii) payment of the amount required
to settle such 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
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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 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 an Income PRIDES fails to notify the 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 Preferred Securities
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 an
Income PRIDES does notify the 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 Preferred Securities of such a Holder will not be
remarketed but instead the Collateral Agent, for the benefit of the Company,
will exercise its rights as a secured party with respect to such Preferred
Securities at the direction of the Company to retain or dispose of the
Collateral in accordance with applicable law. In addition, in the event of a
Failed Remarketing as described in Section 5.4(b) of the Purchase Contract
Agreement, such Failed Remarketing shall constitute an event of default
hereunder by such Holder and the Collateral Agent, for the benefit of the
Company, will also exercise its rights as a secured party with respect to such
Preferred Securities at the direction of the Company to retain or dispose of the
Collateral in accordance with applicable law.
(c) If a Holder of a Growth PRIDES fails to notify the Purchase
Contract Agent of such Holder's intention to make a Cash Settlement in
accordance with Section 5.4(d)(i) of the Purchase Contract Agreement, or if a
Holder of a Growth PRIDES does notify the Agent as provided in paragraph 5.4
(d)(i) of the Purchase Contract Agreement of its intention to pay the Purchase
Price in cash, but fails to make such payment as required by paragraph
5.4(d)(ii) of the Purchase Contract Agreement, such failure shall constitute an
event of default hereunder by such Holder and upon the maturity of any Pledged
Treasury Securities or the Treasury Portfolio, if any, held by the Collateral
Agent on the Business Day immediately preceding the Purchase Contract Settlement
Date, the principal amount of the Pledged Treasury Securities or the Treasury
Portfolio received by the Collateral Agent shall, upon written direction of the
Company, be invested promptly in Permitted Investments. On the Purchase Contract
Settlement Date, an amount equal to the Purchase Price will be remitted to the
Company as payment thereof. In the event the sum of the proceeds from the
related Pledged Treasury Securities or the Treasury Portfolio, as the case may
be, and the investment earnings earned from such investments is in excess of the
aggregate Purchase
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Price of the Purchase Contracts being settled thereby, the Collateral Agent will
distribute such excess to the Purchase Contract Agent for the benefit of the
Holder of the related Growth PRIDES or Income PRIDES when received.
SECTION 4.5. EARLY SETTLEMENT. Upon written notice to the Collateral
Agent by the Purchase Contract Agent that one or more Holders of Securities have
elected to effect Early Settlement of their respective obligations under the
Purchase Contracts forming a part of such Securities in accordance with the
terms of the Purchase Contracts and the Purchase Contract Agreement (setting
forth the number of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio in the case of a Holder
of Income PRIDES or (b) Pledged Treasury Securities in the case of a Holder of
Growth PRIDES, as the case may be, with a principal amount equal to the product
of (i) the Stated Amount times (ii) the number of such Purchase Contracts as to
which such Holders have elected to effect Early Settlement and shall Transfer
all such Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio or Pledged Treasury Securities, as the case
may be, free and clear of the Pledge created hereby, to the Purchase Contract
Agent for the benefit of the Holders.
SECTION 4.6. APPLICATION OF PROCEEDS SETTLEMENT. (a) In the event a
Holder of Income PRIDES (if a Tax Event Redemption has not occurred) has not
elected to make an effective Cash Settlement by notifying the Purchase Contract
Agent in the manner provided for in paragraph 5.4(a)(i) in the Purchase Contract
Agreement or has not made an Early Settlement of the Purchase Contract(s)
underlying its Income PRIDES, such Holder shall be deemed to have elected to pay
for the shares of Common Stock to be issued under such Purchase Contract(s) from
the Proceeds of the related Pledged Preferred Securities. The Collateral Agent
shall, by 10:00 a.m., New York City time, on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date, without any instruction from
such Holder of Income PRIDES, present the related Pledged Preferred Securities
to the Remarketing Agent for remarketing. Upon receiving such Pledged Preferred
Securities, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement and the Remarketing Underwriting Agreement, will use its reasonable
efforts to remarket such Pledged Preferred Securities on such date at a price
not less than approximately 100.50% of the aggregate Value of such Pledged
Preferred Securities, plus accrued and unpaid distributions (including deferred
distributions), if any, thereon. After deducting as the Remarketing Fee an
amount not exceeding 25 basis points (.25%) of the aggregate Value of the
Pledged Preferred Securities from any amount of such Proceeds in excess of the
aggregate Value, plus such accrued and unpaid distributions (including deferred
distributions) of the remarketed Pledged Preferred Securities, the Remarketing
Agent will remit the entire amount of the Proceeds of such remarketing to the
Collateral Agent. On the Purchase Contract Settlement Date, the Collateral Agent
shall apply that portion of the Proceeds from
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such remarketing equal to the aggregate Value, plus such accrued and unpaid
distributions (including deferred distributions) of such Pledged Preferred
Securities, to satisfy in full the obligations of such Holders of Income PRIDES
to pay the Purchase Price to purchase the Common Stock under the related
Purchase Contracts. The remaining portion of such Proceeds, if any, shall be
distributed by the Collateral Agent to the Purchase Contract Agent for payment
to the Holders. If the Remarketing Agent advises the Collateral Agent in writing
that it cannot remarket the related Pledged Preferred Securities of such Holders
of Income PRIDES at a price not less than 100% of the aggregate Value of such
Pledged Preferred Securities plus any accrued and unpaid distributions
(including deferred distributions), thus resulting in a Failed Remarketing and
an event of default under the Purchase Contract Agreement and hereunder, the
Collateral Agent, for the benefit of the Company will, at the written direction
of the Company, retain or dispose of the Pledged Preferred Securities 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 Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) has not made an Early Settlement of the Purchase
Contract(s) underlying its Growth PRIDES or Income PRIDES, such Holder shall be
deemed to have elected to pay for the shares of Common Stock to be issued under
such Purchase Contract(s) from the Proceeds of the related Pledged Treasury
Securities or the Treasury Portfolio, as the case may be. On the Business Day
immediately prior to the Purchase Contract Settlement Date, the Collateral Agent
shall, at the written direction of the Purchase Contract Agent, invest the Cash
proceeds of the maturing Pledged Treasury Securities or the Treasury Portfolio,
as the case may be, in overnight Permitted Investments. Without receiving any
instruction from any such Holder of Growth PRIDES or Income PRIDES, the
Collateral Agent shall apply the Proceeds of the related Pledged Treasury
Securities or Treasury Portfolio to the settlement of such Purchase Contracts on
the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities or Treasury Portfolio and the investment earnings from the investment
in overnight Permitted Investments is in excess of the aggregate Purchase Price
of the Purchase Contracts being settled thereby, the Collateral Agent shall
distribute such excess, when received, to the Purchase Contract Agent for the
benefit of the Holders.
(c) Pursuant to the Remarketing Agreement and subject to the terms of
the Remarketing Underwriting Agreement, on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, but no earlier than
the Payment Date immediately preceding the Purchase Contract Settlement Date,
holders of Separate Preferred Securities may elect to have their Separate
Preferred Securities remarketed by delivering their Separate Preferred
Securities, together with a notice of such election, substantially in the form
of Exhibit C hereto, to the Custodial Agent. The Custodial Agent will hold such
Separate Preferred Securities in an account separate from the Collateral
Account. A holder of Separate Preferred Securities electing to have its Separate
Preferred Securities remarketed will also have the right to withdraw such
election by written notice to the Custodial Agent,
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substantially in the form of Exhibit D hereto, on or prior to the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, upon which
notice the Custodial Agent will return such Separate Preferred Securities to
such holder. On the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, the Custodial Agent will deliver to the Remarketing
Agent for remarketing all separate Preferred Securities delivered to the
Custodial Agent pursuant to this Section 4.6(c) and not withdrawn pursuant to
the terms hereof prior to such date. The portion of the proceeds from such
remarketing equal to the aggregate Value of such Separate Preferred Securities
will automatically be remitted by the Remarketing Agent to the Custodial Agent
for the benefit of the holders of such Separate Preferred Securities. In
addition, after deducting as the Remarketing Fee an amount not exceeding 25
basis points (.25%) of the Value of the remarketed Separate Preferred
Securities, from any amount of such proceeds in excess of the aggregate Value of
the remarketed Separate Preferred Securities plus any accrued and unpaid
distributions (including deferred distributions, if any), the Remarketing Agent
will remit to the Custodial Agent the remaining portion of the proceeds, if any,
for the benefit of such holders. If, despite using its reasonable efforts, the
Remarketing Agent advises the Custodial Agent in writing that it cannot remarket
the related Separate Preferred Securities of such holders at a price not less
than 100% of the aggregate Value of such Separate Preferred Securities plus
accrued and unpaid distributions (including deferred distributions) and thus
resulting in a Failed Remarketing, the Remarketing Agent will promptly return
such Preferred Securities to the Custodial Agent for redelivery to such holders.
In the event of a dissolution of the Trust and the distribution of the
Debentures as described in the Trust Agreement, all references to "Separate
Preferred Securities" in this Section 4.6(c) shall be deemed to be references to
Debentures which are not pledged hereunder or required to be part of the
Collateral.
SECTION 5. VOTING RIGHTS -- PREFERRED SECURITIES. The Purchase Contract
Agent may exercise, or refrain from exercising, any and all voting and other
consensual rights pertaining to the Pledged Preferred Securities or any part
thereof for any purpose not inconsistent with the terms of this Agreement and in
accordance with the terms of the Purchase Contract Agreement; provided, that the
Purchase Contract Agent shall not exercise or, as the case may be, shall not
refrain from exercising such right if, in the judgment of the Company, such
action would impair or otherwise have a material adverse effect on the value of
all or any of the Pledged Preferred Securities; and provided, further, that the
Purchase Contract Agent shall give the Company and the Collateral Agent at least
five days' prior written notice of the manner in which it intends to exercise,
or its reasons for refraining from exercising, any such right. Upon receipt of
any notices and other communications in respect of any Pledged Preferred
Securities, including notice of any meeting at which holders of Preferred
Securities are entitled to vote or solicitation of consents, waivers or proxies
of holders of Preferred Securities, the Collateral Agent shall use reasonable
efforts to send promptly to the Purchase Contract Agent such notice or
communication, and as soon as reasonably practicable after receipt of a written
request therefor from the Purchase Contract Agent, execute and deliver to the
Purchase Contract Agent such proxies and other instruments in respect of such
Pledged Preferred Securities (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect to
the Pledged Preferred Securities.
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SECTION 6. RIGHTS AND REMEDIES; DISTRIBUTION OF THE DEBENTURES; TAX
EVENT REDEMPTION
SECTION 6.1. RIGHTS AND REMEDIES OF THE COLLATERAL AGENT. (a) In
addition to the rights and remedies specified in Section 4.4 hereof or otherwise
available at law or in equity, after an event of default hereunder, the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
"Code") (whether or not the Code is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Wherever reference is made in this Agreement to any section of the
Code, such reference shall be deemed to include a reference to any provision of
the Code which is a successor to, or amendment of, such section. Without
limiting the generality of the foregoing, such remedies may include, to the
extent permitted by applicable law, (i) retention of the Pledged Preferred
Securities or other Collateral in full satisfaction of the Holders obligations
under the Purchase Contracts or (ii) sale of the Pledged Preferred Securities or
other Collateral in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio or on account of principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities, or such appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, and such obligations of such Holder, any and all of
the rights and remedies available to a secured party under the Code and the
TRADES Regulations after default by a debtor, and as otherwise granted herein or
under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the Stated Amount of or,
cash distributions on, the Pledged Preferred Securities, (ii) the principal
amount of the Pledged Treasury Securities, or (iii) the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, subject, in each case, to the provisions of Section
3, and as otherwise granted herein.
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(d) The Purchase Contract Agent, individually and as attorney-in-fact
for each Holder of Securities, in the event such Holder becomes the Holder of a
Growth PRIDES, agrees that, from time to time, upon the written request of the
Collateral Agent, the Purchase Contract Agent or such Holder shall execute and
deliver such further documents and do such other acts and things as the
Collateral Agent may reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the Collateral
Agent hereunder. The Purchase Contract Agent shall have no liability to any
Holder for executing any documents or taking any such acts requested by the
Collateral Agent hereunder, except for liability for its own negligent act, its
own negligent failure to act or its own willful misconduct.
SECTION 6.2. DISTRIBUTION OF THE DEBENTURES; INVESTMENT COMPANY EVENT;
TAX EVENT REDEMPTION. Upon the occurrence of an Investment Company Event or a
liquidation of the Trust, a principal amount of the Debentures constituting the
assets of the Trust and underlying the Preferred Securities equal to the
aggregate stated liquidation amount of the Pledged Preferred Securities shall be
delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. In the event the Collateral Agent receives such Debentures in
respect of Pledged Preferred Securities upon the occurrence of an Investment
Company Event or liquidation of the Trust, the Collateral Agent shall Transfer
the Debentures to the Collateral Account in the manner specified herein
(including, without limitation, physical delivery thereof as set forth in
Section 2.1) for Pledged Preferred Securities to secure the obligations of the
Holders of Income PRIDES to purchase the Company's Common Stock under the
related Purchase Contracts. Thereafter, the Collateral Agent shall have such
security interests, rights and obligations with respect to the Debentures as it
had in respect of the Pledged Preferred Securities as provided in Sections 2, 3,
4, 5 and 6 hereof, and any reference herein to the Pledged Preferred Securities
shall be deemed to be referring to such Debentures.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent by the Property Trustee or upon a
dissolution of the Trust and the distribution of the related Debentures by the
Debenture Trustee on or prior to 12:30 p.m., New York City time, by check or
wire transfer in immediately available funds at such place and at such account
as may be designated by the Collateral Agent in exchange for the Pledged
Preferred Securities or Debentures, as the case may be. In the event the
Collateral Agent receives such Redemption Price, the Collateral Agent will, at
the written direction of the Company, apply an amount equal to the Redemption
Amount of such Redemption Price to purchase from the Quotation Agent the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Purchase Contract Agent for payment to the Holders of Income
PRIDES. The Collateral Agent shall Transfer the Treasury Portfolio to the
Collateral Account in the manner specified herein for Pledged Preferred
Securities to secure the obligation of all Holders of Income PRIDES to purchase
Common Stock of the Company under the Purchase Contracts constituting a part of
such Income PRIDES, in substitution for the Pledged Preferred Securities.
Thereafter the Collateral Agent shall have such security interests, rights and
obligations with respect to the Treasury Portfolio as it had in respect of
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the Pledged Preferred Securities or Debentures, as the case may be, as provided
in Sections 2, 3, 4, 5 and 6, and any reference herein to the Pledged Preferred
Securities or the Debentures shall be deemed to be reference to such Treasury
Portfolio.
SECTION 6.3. SUBSTITUTIONS. Whenever a Holder has the right to
substitute Treasury Securities, Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, for
Collateral held by the Collateral Agent, such substitution shall not constitute
a novation of the security interest created hereby.
SECTION 7. REPRESENTATIONS AND WARRANTIES; COVENANTS.
SECTION 7.1. REPRESENTATIONS AND WARRANTIES. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security
interest in and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the
Collateral and, in the case of Collateral delivered
in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or
has the right to Transfer, the Collateral it
Transfers to the Collateral Agent, free and clear of
any security interest, lien, encumbrance, call,
liability to pay money or other restriction other
than the security interest and lien granted under
Section 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral
Account, the Collateral Agent, for the benefit of the
Company, will have a valid and perfected first
priority security interest therein (assuming that any
central clearing operation or any Intermediary or
other entity not within the control of the Holder
involved in the Transfer of the Collateral, including
the Collateral Agent, gives the notices and takes the
action required of it hereunder and under applicable
law for perfection of that interest and assuming the
establishment and exercise of control pursuant to
Section 2.2 hereof); and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result in
the creation of any security interest, lien or other
encumbrance on the Collateral other than the security
interest and lien granted under Section 2 hereof or
violate any provision of any existing law or
regulation applicable to it or of any mortgage,
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charge, pledge, indenture, contract or undertaking to
which it is a party or which is binding on it or any
of its assets.
SECTION 7.2. COVENANTS. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders
will create or purport to create or allow to subsist
any mortgage, charge, lien, pledge or any other
security interest whatsoever over the Collateral or
any part of it other than pursuant to this Agreement;
and
(b) neither the Purchase Contract Agent nor such Holders
will sell or otherwise dispose (or attempt to
dispose) of the Collateral or any part of it except
for the beneficial interest therein, subject to the
pledge hereunder, transferred in connection with the
Transfer of the Securities.
SECTION 8. THE COLLATERAL AGENT. It is hereby agreed as follows:
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 by any party hereto beyond the specific terms
hereof; (b) shall not be responsible for any recitals contained in this
Agreement, or in any certificate or other document referred to or provided for
in, or received by it under, this Agreement, the Securities or the Purchase
Contract Agreement, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement (other than as against the
Collateral Agent), the Securities or the Purchase Contract Agreement or any
other document referred to or provided for herein or therein or for any failure
by the Company or any other Person (except the Collateral Agent, 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 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 or willful misconduct; and (e) shall not be required to advise any
party as to selling or retaining, or taking or refraining from taking any action
with respect to, the Securities or other property deposited hereunder. Subject
to the foregoing, during the term of this
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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 BY COLLATERAL AGENT. 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 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 Preferred Securities (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,
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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 Preferred Securities 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 not
be commingled with any other assets of any such Person.
SECTION 8.5. NON-RELIANCE ON COLLATERAL AGENT. None of the Securities
Intermediary, the Custodial Agent or the Collateral Agent shall be required to
keep itself informed as to the performance or observance by the Purchase
Contract Agent or any Holder of 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
Preferred Securities (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 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,
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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 gross
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 OF COLLATERAL AGENT. 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 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
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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 Section 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 Section 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 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.
SECTION 9. AMENDMENT.
SECTION 9.1. AMENDMENT WITHOUT CONSENT OF HOLDERS. Without the consent
of any Holders or the holders of any Separate Preferred Securities, 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:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of the
Company; or
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(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon the
Company so long as such covenants or such surrender do not adversely affect the
validity, perfection or priority of the security interests granted or created
hereunder; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or Purchase
Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, or to make any other provisions with respect to such matters or
questions arising under this Agreement, provided such action shall not adversely
affect the interests of the Holders.
SECTION 9.2. AMENDMENT WITH CONSENT OF HOLDERS. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided, however, that no
such supplemental agreement shall, without the consent of the Holder of each
Outstanding Security adversely affected thereby,
(1) change the amount or type of Collateral underlying a
Security (except for the rights of holders of Income PRIDES to
substitute the Treasury Securities for the Pledged Preferred Securities
or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, or the rights of Holders of Growth
PRIDES to substitute Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as applicable, for the
Pledged Treasury Securities), impair the right of the Holder of any
Security to receive distributions on the underlying Collateral or
otherwise adversely affect the Holder's rights in or to such
Collateral; or
(2) otherwise effect any action that would require the consent
of the Holder of each Outstanding Security affected thereby pursuant to
the Purchase Contract Agreement if such action were effected by an
agreement supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
SECTION 9.3. EXECUTION OF AMENDMENTS. In executing any amendment
permitted by this Section, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the
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Purchase Contract Agent shall be entitled to receive and (subject to Section 6.1
hereof, with respect to the Collateral Agent, and Section 7.1 of the Purchase
Contract Agreement, with respect to the Purchase Contract Agent) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Agreement and that all
conditions precedent, if any, to the execution and delivery of such amendment
have been satisfied.
SECTION 9.4. EFFECT OF AMENDMENTS. Upon the execution of any amendment
under this Section 9, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
SECTION 9.5. REFERENCE TO AMENDMENTS. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Section may, and shall if required
by the Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement in exchange for Outstanding
Security Certificates.
SECTION 10. MISCELLANEOUS.
SECTION 10.1. NO WAIVER. No failure on the part of any party hereto or
any of its agents to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by any party hereto or
any of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
SECTION 10.2. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting
the foregoing, the above choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent 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
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Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
SECTION 10.3. NOTICES. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
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 liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
SECTION 10.7. EXPENSES, ETC. The Company agrees to reimburse the
Collateral Agent 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
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other
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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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
LINCOLN NATIONAL CORPORATION
By:__________________________________
Name:
Title:
Address for Notices:
LINCOLN NATIONAL CORPORATION
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxxx, XX 00000-0000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
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THE FIRST NATIONAL BANK OF CHICAGO, 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:
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx,
Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Corporate Trust Services Division
Telecopy: (000) 000-0000
The Chase Manhattan Bank,
as Collateral Agent, Custodial Agent and as
Securities Intermediary
By: _____________________________
Name:
Title:
Address for Notices:
The Chase Manhattan Bank
_____________________________
_____________________________
_____________________________
Attention:
Telecopy: (212) ________
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EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank
_____________________________
_____________________________
_____________________________
Attention:
Re: FELINE PRIDES of Lincoln National Corporation (the
"Company"), and Lincoln National Capital IV
We hereby notify you in accordance with Section [4.1] [4.2] of
the Pledge Agreement, dated as of ______, 1998, (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 [Income PRIDES] [Growth PRIDES] from time to time, that the
holder of Securities listed below (the "Holder") has elected to substitute
[$_____ aggregate principal amount of Treasury Securities] [$_______Stated
Amount of Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio] in exchange for an equal Value of [Pledged Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio] [Pledged Treasury Securities] held by you in accordance with the
Pledge Agreement and has delivered to us a notice stating that the Holder has
Transferred [Treasury Securities] [Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] to you, as Collateral
Agent. We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio], to release the [Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio] [Treasury Securities] related to such [Income PRIDES] [Growth PRIDES]
to us in accordance with the Holder's instructions. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.
Date: ____________ ______________________________________
By: ___________________________________
Name:
Title:
Signature Guarantee:
__________________________________
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Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio] for the [Pledged Preferred
Securities or the Treasury Portfolio] [Pledged Treasury Securities]:
_____________________ ______________________________________
Name Social Security or other Taxpayer
Identification Number, if any
_____________________
Address
_____________________
_____________________
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EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Corporate Trust, Services Division
Re: FELINE PRIDES of Lincoln National Corporation (the Company"), and
Lincoln National Capital IV
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 Stated Amount of Preferred Securities or
the appropriate Applicable Ownership Interest of the Treasury Portfolio] in
exchange for an equal Value of [Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] [Pledged Treasury
Securities] held by the Collateral Agent, in accordance with Section 4.1 of the
Pledge Agreement, dated ______, 1998 (the "Pledge Agreement"), between you, the
Company and the Collateral Agent. The undersigned Holder hereby instructs you to
instruct the Collateral Agent to release to you on behalf of the undersigned
Holder the [Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio] [Pledged Treasury Securities] related to
such [Income PRIDES] [Growth PRIDES]. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Dated: _____________ ______________________________________
Signature
Signature Guarantee:__________
Please print name and address of Registered Holder:
_____________________ ______________________________________
Name Social Security or other
Taxpayer Identification
Number, if any
_________________________
Address
_________________________
_________________________
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EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
The Chase Manhattan Bank
________________________
________________________
________________________
Attention:
Re: Preferred Securities of Lincoln National Corporation (the
"Company"), and Lincoln National Capital IV
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of __________, 1998 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and The First National Bank of Chicago, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Income PRIDES and Growth PRIDES
from time to time, that the undersigned elects to deliver $__________ stated
liquidation amount of Preferred Securities for delivery to the Remarketing Agent
on the fourth Business Day immediately preceding the Purchase Contract
Settlement 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 Preferred Securities 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 Remarketing, upon receipt of the Preferred Securities 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 Preferred Securities tendered hereby and that the undersigned is
the record owner of any Preferred Securities tendered herewith in physical form
or a participant in The Depositary Trust Company ("DTC") and the beneficial
owner of any Preferred Securities 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
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Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
Date: ______________
_______________________________
By: ___________________________
Name:
Title:
Signature Guarantee:___________
Please print name and address:
_________________________ __________________________________
Name Social Security or other Taxpayer
Identification Number, if any
__________________________
Address
__________________________
__________________________
__________________________
_________________________________________________________________
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)
_______________________________________
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38
________________________________________
(Zip Code)
______________________________________________
(Tax Identification or Social Security Number)
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39
B. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Preferred Securities 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, Preferred Securities 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: _____________________
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EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Chase Manhattan Bank
_______________________
_______________________
_______________________
Attention:
Re: Preferred Securities of Lincoln National
Corporation (the "Company"), and Lincoln National Capital IV
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of ___________, 1998 (the "Pledge Agreement")
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and The First National Bank of Chicago, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Income PRIDES and Growth PRIDES
from time to time, that the undersigned elects to withdraw the $_____ aggregate
stated liquidation amount of Preferred Securities 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 Preferred
Securities 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: ________________
Please print name and address:
__________________________ ____________________________________
(Name) Social Security or other Taxpayer
Identification Number, if any
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41
______________________________
Address
______________________________
______________________________
_________________________________________________________________
A. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Preferred Securities 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, Preferred Securities 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: __________________
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