EXHIBIT 4.6
HOUSEHOLD INTERNATIONAL, INC.
JPMORGAN CHASE BANK
AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
THE BANK OF NEW YORK
AS PURCHASE CONTRACT AGENT
PLEDGE AGREEMENT
DATED AS OF OCTOBER 30, 2002
TABLE OF CONTENTS
ARTICLE I Definitions 2
SECTION 1.1 Definitions........................................................2
ARTICLE II Pledge; Control and Perfection 4
SECTION 2.1 The Pledge.........................................................4
SECTION 2.2 Control and Perfection.............................................5
ARTICLE III PAYMENTS on Collateral 8
SECTION 3.1 Payments...........................................................8
SECTION 3.2 Application of Payments............................................9
ARTICLE IV Substitution, Release, Repledge and Settlement of Notes 9
SECTION 4.1 Collateral Substitution and the Creation of Stripped Units.........9
SECTION 4.2 Collateral Substitution and the Re-Creation of Normal Units.......10
SECTION 4.3 Termination Event.................................................11
SECTION 4.4 Early Settlement; Merger Early Settlement; Cash Settlement........12
SECTION 4.5 Remarketing; Application of Proceeds; Settlement..................12
ARTICLE V Voting Rights-- Notes 15
SECTION 5.1 Exercise by Purchase Contract Agent...............................15
ARTICLE VI Rights and Remedies; TAX EVENT REDEMPTION 15
SECTION 6.1 Rights and Remedies of the Collateral Agent.......................15
SECTION 6.2 Substitutions.....................................................16
SECTION 6.3 Tax Event Redemption..............................................16
ARTICLE VII Representations and Warranties; Covenants 17
SECTION 7.1 Representations and Warranties of the Holders.....................17
SECTION 7.2 Representations and Warranties of the Collateral Agent,
Custodial Agent and Securities Intermediary.......................18
SECTION 7.3 Covenants.........................................................18
ARTICLE VIII The Collateral Agent 19
SECTION 8.1 Appointment, Powers and Immunities................................19
SECTION 8.2 Instructions of the Company.......................................20
SECTION 8.3 Reliance..........................................................21
SECTION 8.4 Rights in Other Capacities........................................21
SECTION 8.5 Non-Reliance on Collateral Agent..................................21
SECTION 8.6 Compensation and Indemnity........................................22
SECTION 8.7 Failure to Act....................................................22
SECTION 8.8 Resignation.......................................................23
SECTION 8.9 Right to Appoint Agent or Advisor.................................24
SECTION 8.10 Survival.........................................................24
SECTION 8.11 Exculpation......................................................24
ARTICLE IX Amendment 25
SECTION 9.1 Amendment Without Consent of Holders..............................25
SECTION 9.2 Amendment with Consent of Holders.................................25
SECTION 9.3 Execution of Amendments...........................................26
SECTION 9.4 Effect of Amendments..............................................26
SECTION 9.5 Reference to Amendments...........................................27
ARTICLE X Miscellaneous 27
SECTION 10.1 No Waiver........................................................27
SECTION 10.2 GOVERNING LAW....................................................27
SECTION 10.3 Notices..........................................................28
SECTION 10.4 Successors and Assigns...........................................28
SECTION 10.5 Counterparts.....................................................28
SECTION 10.6 Severability.....................................................28
SECTION 10.7 Expenses, Etc....................................................29
SECTION 10.8 Security Interest Absolute.......................................29
SECTION 10.9 Waiver of Jury Trial.............................................30
EXHIBIT A Instruction from Purchase Contract Agent to Collateral Agent
EXHIBIT B Instruction to Purchase Contract Agent
EXHIBIT C Instruction to Custodial Agent Regarding Remarketing
EXHIBIT D Instruction to Custodial Agent Regarding Withdrawal from
Remarketing
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of October 30, 2002 (this "Agreement"),
among Household International, Inc., a Delaware corporation (the "Company"),
JPMorgan Chase 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 Bank of New York, a New York
banking corporation, not individually but solely as purchase contract agent and
as attorney-in-fact of the Holders from time to time of the Units (in such
capacity, together with its successors in such capacity, the "Purchase Contract
Agent") under the Purchase Contract Agreement (as defined herein).
RECITALS
WHEREAS, the Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued Units having a Stated Amount
of $25 per Unit, all of which will initially be Normal Units.
WHEREAS, each Normal Unit will be comprised of (a) a Purchase Contract
and (b) either (i) a Note having a $25 principal amount or (ii) following the
remarketing of the Notes in accordance with the Purchase Contract Agreement and
the Remarketing Agreement or if the Holder has elected not to have the Note
remarketed or a Tax Event Redemption in accordance with the Purchase Contract
Agreement and the terms of the Notes, beneficial ownership of the appropriate
Treasury Consideration.
WHEREAS, in accordance with the terms of the Purchase Contract
Agreement, a holder of Normal Units may separate the Notes or the appropriate
Treasury Consideration, as applicable, from the related Purchase Contracts by
substituting for such Notes or the appropriate Treasury Consideration, as the
case may be, Treasury Securities that will pay in the aggregate an amount equal
to the aggregate Stated Amount of such Normal Units. Upon such separation, the
Normal Units will become Stripped Units. Each Stripped Unit will be comprised of
(a) a Purchase Contract and (b) a 1/40 undivided beneficial interest in a
Treasury Security.
WHEREAS, pursuant to the terms of the Purchase Contract Agreement and
the Purchase Contracts, the Holders, from time to time, of the Units have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Notes, any Treasury
Consideration and any Treasury
Securities delivered in exchange therefor to secure each Holder's obligations
under the related Purchase Contract, as provided herein and subject to the terms
hereof.
NOW, THEREFORE, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company, the
Collateral Agent, the Securities Intermediary, the Custodial Agent and the
Purchase Contract Agent, on its own behalf and as attorney-in-fact of the
Holders from time to time of the Units, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions
For all purposes of this agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) capitalized terms used but not defined herein are used as defined
in the Purchase Contract Agreement;
(b) the defined terms in this Agreement have the meanings assigned to
them in this Article and include the plural as well as the singular; and
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Agreement" means this agreement as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the securities account (number [ ])
maintained at JPMorgan Chase Bank in the name "The Bank of New York, as Purchase
Contract Agent on behalf of the holders of certain securities of Household
International, Inc., Collateral Account subject to the security interest of
JPMorgan Chase Bank, as Collateral Agent, for the benefit of Household
International, Inc., as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this Agreement.
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"Company" means the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Custodial Agent" has the meaning specified in the first paragraph of
this Agreement.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Notes" has the meaning specified in Section 2.1 hereof.
"Pledged Treasury Consideration" has the meaning specified in Section
2.1 hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, collection or disposition of the Collateral or any
proceeds thereof.
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the
Recitals.
"Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section 8-102(a)
(17) of the Code.
"Separate Notes" means any Notes that are not Pledged Notes.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance with
the instructions of the Collateral Agent, the Purchase Contract Agent or the
Holder, as applicable:
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(i) in the case of Collateral consisting of securities which cannot
be delivered by book-entry or which the parties agree are to be
delivered in physical form, delivery in appropriate physical form
to the recipient accompanied by any duly executed instruments of
transfer, assignments in blank, transfer tax stamps and any other
documents necessary to constitute a legally valid transfer to the
recipient;
(ii) in the case of Collateral consisting of securities maintained in
book-entry form by causing a "securities intermediary" (as
defined in Section 8-102(a)(14) of the Code) to (a) credit a
"security entitlement" (as defined in Section 8-102(a)(17) of the
Code) with respect to such securities to a "securities account"
(as defined in Section 8-501(a) of the Code) maintained by or on
behalf of the recipient and (b) to issue a confirmation to the
recipient with respect to such credit. In the case of Collateral
to be delivered to the Collateral Agent, the securities
intermediary shall be the Securities Intermediary and the
securities account shall be the Collateral Account. In addition,
any Transfer of Treasury Securities and Treasury Consideration
hereunder shall be made in accordance with the TRADES Regulations
and other applicable law.
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
SECTION 2.1 The Pledge
(a) The Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, and the Purchase Contract Agent, as such
attorney-in-fact, hereby pledge and grant to the Collateral Agent, for the
benefit of the Company, as collateral security for the performance when due by
such Holders of their respective obligations under the related Purchase
Contracts, a security interest in all of the right, title and interest of the
Purchase Contract Agent and such Holders in:
(i) (A) the Notes, Treasury Consideration or Treasury Securities
constituting a part of the Units, (B) any Treasury Securities
delivered in exchange for any Notes or Treasury Consideration, as
applicable, in accordance with Section 4.1 hereof, and (C) any
Notes or Treasury Consideration, as applicable, delivered in
exchange for any Treasury Securities in accordance with Section
4.2 hereof, in each case that have been Transferred to or
otherwise received by the Collateral Agent and not released by
the Collateral Agent to such Holders under the provisions of this
Agreement;
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(ii) the Collateral Account and all securities, financial assets,
security entitlements, cash and other property credited thereto
and all Security Entitlements related thereto; and
(iii) all Proceeds of the foregoing (all of the foregoing,
collectively, the "Collateral").
(b) Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Units, shall cause the Notes comprising a part of the Normal Units to be
Transferred to the Collateral Agent for the benefit of the Company.
(c) The pledge provided in this Section 2.1 is herein referred to as
the "Pledge" and the Notes (including any Notes that are delivered pursuant to
Section 6.2 hereof), Treasury Consideration and Treasury Securities subject to
the Pledge, excluding any Notes, Treasury Consideration or Treasury Securities
released from the Pledge as provided in Sections 4.1 and 4.2 hereof,
respectively, are hereinafter referred to as "Pledged Notes," "Pledged Treasury
Consideration" and "Pledged Treasury Securities," respectively. Subject to the
Pledge and the provisions of Section 2.2 hereof, the Holders from time to time
shall have full beneficial ownership of the Collateral. For purposes of
perfecting the Pledge under applicable law, including, to the extent applicable,
the TRADES Regulations or the Uniform Commercial Code as adopted and in effect
in any applicable jurisdiction, the Collateral Agent shall be the agent of the
Company as provided herein. Whenever directed by the Collateral Agent acting on
behalf of the Company, the Securities Intermediary shall have the right to
reregister the Notes or any other securities held in physical form in its name.
(d) Except as may be required in order to release Notes or Treasury
Consideration, as applicable, in connection with a Tax Event Redemption or with
a Holder's election to convert its investment from a Normal Unit to a Stripped
Unit, or except as otherwise required to release Notes as specified herein,
neither the Collateral Agent, the Custodial Agent nor the Securities
Intermediary shall relinquish physical possession of any certificate evidencing
Notes, Treasury Securities or Treasury Consideration, as applicable, prior to
the termination of this Agreement. If it becomes necessary for the Securities
Intermediary to relinquish physical possession of a certificate in order to
release a portion of the Notes evidenced thereby from the Pledge, the Collateral
Agent shall use its best efforts to obtain physical possession of a replacement
certificate evidencing any Notes remaining subject to the Pledge hereunder
registered to it or endorsed in blank within fifteen days of the date it
relinquished possession. The Collateral Agent shall promptly notify the Company
of its inability to obtain possession of any such replacement certificate as
required hereby.
SECTION 2.2 Control and Perfection
(a) In connection with the Pledge granted in Section 2.1, and subject
to the other provisions of this Agreement, the Holders from time to time acting
through the
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Purchase Contract Agent, as their attorney-in-fact, hereby authorize and direct
the Securities Intermediary (without the necessity of obtaining the further
consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent may deliver pursuant to the terms hereof or upon the written
direction of the Company with respect to the Collateral Account, the Collateral
credited thereto and any Security Entitlements with respect to any thereof. In
the event the Securities Intermediary receives from the Holders or the Purchase
Contract Agent entitlement orders which conflict with entitlement orders
received from the Collateral Agent, the Securities Intermediary shall follow the
entitlement orders received from the Collateral Agent. Such instructions and
entitlement orders may, without limitation, direct the Securities Intermediary
to transfer, redeem, assign, or otherwise deliver the Notes, the Treasury
Consideration and the Treasury Securities, and any Security Entitlements with
respect thereto, or sell, liquidate or dispose of such assets through a broker
designated by the Company, and to pay and deliver any income, proceeds or other
funds derived therefrom to the Company. The Holders from time to time acting
through the Purchase Contract Agent hereby further authorize and direct the
Collateral Agent, as agent of the Company, to, pursuant to the terms hereof or
upon written direction of the Company, 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
only in accordance with the terms hereof or as otherwise 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
required by the terms hereof or as otherwise directed in writing by the Company.
(b) The Securities Intermediary hereby confirms and agrees that:
(i) all securities or other property underlying any financial assets
credited to the Collateral Account shall be registered in the
name of the Securities Intermediary, or its nominee, indorsed to
the Securities Intermediary, or its nominee, or in blank or
credited to another Collateral Account maintained in the name of
the Securities Intermediary and in no case will any financial
asset credited to the Collateral Account be registered in the
name of the Purchase Contract Agent, the Collateral Agent, the
Company or any Holder, payable to the order of, or specially
indorsed to, the Purchase Contract Agent, the Collateral Agent,
the Company or any Holder except to the extent the foregoing have
been specially indorsed to the Securities Intermediary or in
blank;
(ii) all property delivered to the Securities Intermediary pursuant to
this Agreement (including, without limitation, any Notes,
Treasury
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Consideration or Treasury Securities) will be promptly credited
to the Collateral Account;
(iii) the Collateral Account is an account to which financial assets
are or may be credited, and the Securities Intermediary shall,
subject to the terms of this Agreement, treat the Purchase
Contract Agent as entitled to exercise the rights of any
financial asset credited to the Collateral Account;
(iv) the Securities Intermediary has not entered into, and until the
termination of this Agreement will not enter into, any agreement
with any other Person relating to the Collateral Account and/or
any financial assets credited thereto pursuant to which it has
agreed to comply with entitlement orders (as defined in Section
8-102(a)(8) of the Code) of such other Person; and
(v) the Securities Intermediary has not entered into, and until the
termination of this Agreement will not enter into, any agreement
with the Company, the Collateral Agent or the Purchase Contract
Agent purporting to limit or condition the obligation of the
Securities Intermediary to comply with entitlement orders as set
forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item of
property (whether investment property, financial asset, security, instrument or
cash) credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorney-in-fact to take on behalf of, and in
the name, place and stead of the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such
power-of-attorney shall not be deemed to require of the Collateral Agent any
specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder. Notwithstanding the foregoing, in no event shall the Collateral Agent
or Securities Intermediary be responsible for the preparation or filing of any
financing or continuation statements in the appropriate jurisdictions or
responsible for maintenance or perfection of any security interest hereunder.
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ARTICLE III
PAYMENTS ON COLLATERAL
SECTION 3.1 Payments
So long as the Purchase Contract Agent is the registered owner of the
Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, it
shall receive all payments thereon. If the Pledged Notes are reregistered such
that the Collateral Agent becomes the registered holder, all payments of the
principal of, or interest on, the Pledged Notes and all payments of the
principal of, or cash distributions on, any Pledged Treasury Consideration or
Pledged Treasury Securities, that are received by the Collateral Agent and that
are properly payable hereunder shall be paid by the Collateral Agent by wire
transfer in same day funds:
(i) in the case of (A) quarterly cash distributions on Normal Units
which include Pledged Notes or Pledged Treasury Consideration, as
the case may be, and (B) any payments of principal or, if
applicable, any Tax Event Redemption Treasury Consideration (as
specified in clause (B) of the definition of such term) with
respect to any Notes or Treasury Consideration, as the case may
be, that have been released from the Pledge pursuant to Section
4.3 hereof, to the Purchase Contract Agent, for the benefit of
the relevant Holders of the Normal Units, to the account
designated by the Purchase Contract Agent for such purpose no
later than 11:00 a.m., New York City time, on the Business Day
such payment is received by the Collateral Agent (provided that
in the event such payment or payment instructions are received by
the Collateral Agent on a day that is not a Business Day or after
9:00 a.m., New York City time, on a Business Day, then such
payment shall be made no later than 9:30 a.m., New York City
time, on the next succeeding Business Day);
(ii) in the case of any payments with respect to any Treasury
Securities that have been released from the Pledge pursuant to
Section 4.3 hereof to the Holders of the Stripped Units, to the
accounts designated by the Purchase Contract Agent in writing for
such purpose no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral Agent
(provided that in the event such payment or payment instructions
are received by the Collateral Agent on a day that is not a
Business Day or after 10:00 a.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30
a.m., New York City time, on the next succeeding Business Day);
any payment to be made directly to the Holders of such Stripped
Units shall be subject to applicable federal withholding law,
including the requirement that a Holder shall have provided to
the Collateral Agent its certified taxpayer identification
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number by furnishing appropriate Forms W-9 (or such other forms
as shall be applicable); and
(iii) in the case of payments in respect of any Pledged Notes, Pledged
Treasury Consideration or Pledged Treasury Securities, as the
case may be, to be paid upon settlement of such Holder's
obligations to purchase Common Stock under the Purchase Contract,
to the Company on the Stock Purchase Date in accordance with the
procedure set forth in Section 4.5(a) or 4.5(b) hereof, in full
satisfaction of the respective obligations of the Holders under
the related Purchase Contracts.
SECTION 3.2 Application of Payments
All payments received by the Purchase Contract Agent as provided herein
shall be applied by the Purchase Contract Agent pursuant to the provisions of
the Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of principal on account of any Notes
or Treasury Consideration, as applicable, that, at the time of such payment, are
Pledged Notes or Pledged Treasury Consideration, as the case may be (other than
payments to which it is entitled pursuant to the terms of the Purchase Contract
Agreement), or a Holder of a Stripped Unit shall receive any payments of
principal on account of any Treasury Securities that, at the time of such
payment, are Pledged Treasury Securities (other than payments to which it is
entitled pursuant to the terms of the Purchase Contract Agreement), the Purchase
Contract Agent or such Holder shall hold the same as trustee of an express trust
for the benefit of the Company (and promptly deliver the same over to the
Company) for application to the obligations of the Holders under the related
Purchase Contracts, and the Holders shall acquire no right, title or interest in
any such payments of principal so received.
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES
SECTION 4.1 Collateral Substitution and the Creation of Stripped Units
At any time on or prior to the second Business Day immediately
preceding the Stock Purchase Date, a Holder of Normal Units shall have the right
to substitute Treasury Securities for the Pledged Notes or Pledged Treasury
Consideration, as the case may be, securing such Holder's obligations under the
Purchase Contracts comprising a part of such Normal Units, in integral multiples
of 40 Normal Units, or after a successful remarketing of the Notes pursuant to
the Purchase Contract Agreement or a Tax Event Redemption, in integral multiples
of Normal Units so that Treasury Securities to be deposited and the applicable
Treasury Consideration, as the case may be, to be released are in integral
multiples of $1,000, by (a) Transferring to the Collateral Agent Treasury
Securities having an aggregate principal amount equal to the aggregate Stated
Amount of
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such Normal Units and (b) delivering such Normal Units to the Purchase Contract
Agent, accompanied by a notice, substantially in the form of Exhibit B hereto,
to the Purchase Contract Agent stating that such Holder has Transferred Treasury
Securities to the Collateral Agent pursuant to clause (a) above (stating the
principal amount, the maturities and the CUSIP numbers of the Treasury
Securities Transferred by such Holder) and requesting that the Purchase Contract
Agent instruct the Collateral Agent to release from the Pledge the Pledged Notes
or Pledged Treasury Consideration related to such Normal Units, whereupon the
Purchase Contract Agent shall promptly give such instruction to the Collateral
Agent in the form provided in Exhibit A; provided that such Holder may not
substitute such Treasury Securities for such Pledged Notes or Pledged Treasury
Consideration pursuant to this Section 4.1 during the period from four Business
Days prior to any Remarketing Period until the expiration of three Business Days
after the end of such Remarketing Period. Upon receipt of Treasury Securities
from a Holder of Normal Units and the related instruction from the Purchase
Contract Agent, the Collateral Agent shall release the Pledged Notes or Pledged
Treasury Consideration and shall promptly Transfer such Pledged Notes or Pledged
Treasury Consideration free and clear of any lien, pledge or security interest
created hereby, to the Purchase Contract Agent. All items Transferred and/or
substituted by any Holder pursuant to this Section 4.1, Section 4.2 or any other
Section of this Agreement shall be Transferred and/or substituted free and clear
of all liens, claims and encumbrances.
SECTION 4.2 Collateral Substitution and the Re-Creation of Normal Units
At any time on or prior to the second Business Day immediately
preceding the Stock Purchase Date, a Holder of Stripped Units shall have the
right to reestablish Normal Units (a) consisting of the Purchase Contracts and
Notes in integral multiples of 40 Normal Units, or (b) after a remarketing of
the Notes pursuant to the Purchase Contract Agreement or a Tax Event Redemption,
consisting of the Purchase Contracts and the appropriate Treasury Consideration
(identified and calculated by reference to the Treasury Consideration then
comprising Normal Units) or the appropriate portion of the Treasury Portfolio in
integral multiples of Stripped Units so that the Treasury Consideration to be
deposited and the Treasury Securities to be released are in integral multiples
of $1,000, by (x) Transferring to the Collateral Agent Notes or the appropriate
Treasury Consideration, as the case may be, then comprising such number of
Normal Units as is equal to such Stripped Units and (y) delivering such Stripped
Units to the Purchase Contract Agent, accompanied by a notice, substantially in
the form of Exhibit B hereto, to the Purchase Contract Agent stating that such
Holder has transferred Notes or Treasury Consideration to the Collateral Agent
pursuant to clause (a) above and requesting that the Purchase Contract Agent
instruct the Collateral Agent to release from the Pledge the Pledged Treasury
Securities related to such Stripped Units, whereupon the Purchase Contract Agent
shall give such instruction to the Collateral Agent in the form provided in
Exhibit A. Upon receipt of the Notes or the appropriate Treasury Consideration,
as the case may be, from such Holder and the instruction from the Purchase
Contract Agent, the Collateral Agent shall release the Pledged Treasury
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Securities and shall promptly Transfer such Treasury Securities, free and clear
of any lien, pledge or security interest created hereby, to the Purchase
Contract Agent.
SECTION 4.3 Termination Event
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that there has occurred a Termination
Event and identifying the nature of the Termination Event, the Collateral Agent
shall release all Collateral from the Pledge and shall promptly Transfer any
Pledged Notes or Pledged Treasury Consideration, as the case may be, and Pledged
Treasury Securities to the Purchase Contract Agent for the benefit of the
Holders of the Normal Units and the Stripped Units, respectively, free and clear
of any lien, pledge or security interest or other interest created in favor of
the Collateral Agent hereby.
(b) If such Termination Event shall result from the Company's becoming
a debtor under the Bankruptcy Code, and if the Collateral Agent shall advise the
Purchase Contract Agent in writing that the Collateral Agent shall for any
reason be prohibited from promptly effectuating the release and Transfer of all
Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as
the case may be, as provided by this Section 4.3, the Purchase Contract Agent
shall:
(i) use its best efforts to obtain an opinion of a nationally
recognized law firm reasonably acceptable to the Collateral Agent
to the effect that, as a result of the Company's being the debtor
in such a bankruptcy case, the Collateral Agent will not be
prohibited from releasing or Transferring the Collateral as
provided in this Section 4.3, and shall deliver such opinion to
the Collateral Agent within ten days after the occurrence of such
Termination Event, and if (y) the Purchase Contract Agent shall
be unable to obtain such opinion within ten days after the
occurrence of such Termination Event or (z) the Collateral Agent
shall continue, after delivery of such opinion, to refuse to
effectuate the release and Transfer of all Pledged Notes, Pledged
Treasury Consideration or Pledged Treasury Securities, as the
case may be, as provided in this Section 4.3, then the Purchase
Contract Agent shall within fifteen days after the occurrence of
such Termination Event commence an action or proceeding in the
court with jurisdiction of the Company's case under the
Bankruptcy Code seeking an order requiring the Collateral Agent
to effectuate the release and transfer of all Pledged Notes,
Pledged Treasury Consideration or Pledged Treasury Securities, as
the case may be, as provided by this Section 4.3 or
(ii) commence an action or proceeding like that described in
subsection (i) hereof within ten days after the occurrence of
such Termination Event.
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SECTION 4.4 Early Settlement; Merger Early Settlement; Cash Settlement
Upon written notice to the Collateral Agent by the Purchase Contract
Agent that one or more Holders of Units have elected to effect Early Settlement,
Merger Early Settlement or Cash Settlement of their respective obligations under
the Purchase Contracts forming a part of such Units in accordance with the terms
of the Purchase Contracts and the Purchase Contract Agreement (setting forth the
number of such Purchase Contracts as to which such Holders have elected to
effect Early Settlement, Merger Early Settlement or Cash 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, Merger Early Settlement Amounts or Cash Settlement Amounts, as the case
may be, pursuant to the terms of the Purchase Contracts and the Purchase
Contract Agreement and that all conditions to such Early Settlement, Merger
Early Settlement or Cash Settlement, as the case may be, have been satisfied,
then the Collateral Agent shall release from the Pledge (a) Pledged Notes or
Pledged Treasury Consideration, as the case may be, in the case of a Holder of
Normal Units or (b) Pledged Treasury Securities, in the case of a Holder of
Stripped Units, identified by the Purchase Contract Agent as relating to such
Purchase Contracts as to which such Holders have elected to effect Early
Settlement, Merger Early Settlement or Cash Settlement, and shall Transfer all
such Pledged Notes, Pledged Treasury Consideration or Pledged Treasury
Securities, as the case may be, free and clear of the Pledge to the Collateral
Agent created hereby, to the Purchase Contract Agent for the benefit of the
Holders.
SECTION 4.5 Remarketing; Application of Proceeds; Settlement
(a) Pursuant to the Purchase Contract Agreement, the Purchase Contract
Agent shall notify, by 10:00 a.m., New York City time, on the third Business Day
preceding the first day of any Remarketing Period, the Remarketing Agent and the
Collateral Agent of the aggregate principal amount of Notes comprising part of
Normal Units to be remarketed. The Collateral Agent shall, by 10:00 a.m., New
York City time, on the Business Day immediately preceding the first day of any
Remarketing Period, without any instruction from Holders of Normal Units,
deliver (i) the Pledged Notes to be remarketed to the Remarketing Agent for
remarketing and (ii) the remaining Pledged Notes to the Purchase Contract Agent
for distribution to the Holders that have elected not to participate in the
remarketing in accordance with the Purchase Contract Agreement. The Remarketing
Agent will agree pursuant to the Remarketing Agreement to deliver the
Agent-purchased Treasury Consideration purchased from the proceeds of a
successful remarketing to the Purchase Contract Agent, which shall thereupon
deliver such Agent-purchased Treasury Consideration to the Collateral Agent.
Upon receipt of the Agent-purchased Treasury Consideration from the Purchase
Contract Agent following a successful remarketing, the Collateral Agent, for the
benefit of the Company, shall thereupon hold such Agent-purchased Treasury
Consideration to secure such Holders' obligations under the Purchase Contracts.
On the Stock Purchase Date, the Collateral Agent shall apply that portion of the
payments received in respect of the Pledged
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Treasury Consideration equal to the aggregate Stated Amount of the related
Normal Units to satisfy in full the obligations of such Holders of Normal Units
to pay the Purchase Price under the related Purchase Contracts. The remaining
portion of such proceeds, if any, shall be distributed by the Collateral Agent
to the Purchase Contract Agent for payment to each Holder of a Normal Unit a
cash payment in an amount equal to the quarterly interest payment on the Notes
at the initial annual rate of 8.875%.
(b) Promptly following a Failed Remarketing, the Notes delivered to the
Remarketing Agent and the Purchase Contract Agent pursuant to Section 4.5(a)
shall be returned to the Collateral Agent, together with written notice from the
Remarketing Agent of the Failed Remarketing. The Collateral Agent, for the
benefit of the Company, shall thereupon hold such Notes to secure the
obligations of Holders of Normal Units under the Purchase Contracts. The
Remarketing Agent shall agree to make one or more attempts to remarket the Notes
in accordance with the procedures set forth in the Purchase Contract Agreement
and the Remarketing Agreement between the Remarketing Date and the Stock
Purchase Date, provided that the requirements of Section 5.4(b)(ii) of the
Purchase Contract Agreement have been met. If by 4:00 p.m., New York City time,
on the third Business Day immediately preceding the Stock Purchase Date the
Remarketing Agent has failed to remarket the Notes at a price equal to at least
100.25% of the Remarketing Value (as described in the Purchase Contract
Agreement), the "Last Failed Remarketing" shall be deemed to have occurred. In
this case, the Remarketing Agent will agree pursuant to the Remarketing
Agreement to advise the Collateral Agent in writing that it cannot remarket the
related Pledged Notes of such Holders of Normal Units and the Remarketing Agent
will agree pursuant to the Remarketing Agreement to promptly return to the
Collateral Agent the Notes delivered to it pursuant to Section 4.5(a). The
Collateral Agent, for the benefit of the Company will, at the written direction
of the Company, deliver or dispose of the Pledged Notes in accordance with the
Company's written instructions to satisfy in full, from any such disposition or
retention, such Holders' obligations to pay the Purchase Price for the Common
Stock; provided that if upon a Failed Remarketing or the Last Failed
Remarketing, as the case may be, the Collateral Agent delivers or disposes of
the Pledged Notes in accordance with the written instructions of the Company,
any accrued and unpaid interest on such Notes will become payable by the Company
to the Purchase Contract Agent for payment to the Holders of the Normal Units to
which such Notes relate in accordance with the Purchase Contract Agreement.
(c) In the event a Holder of Stripped Units has not made an Early
Settlement, Merger Early Settlement or Cash Settlement of the Purchase Contracts
underlying its Stripped Units, such Holder shall be deemed to have elected to
pay for the Common Stock to be issued under such Purchase Contracts from the
payments received in respect of the related Pledged Treasury Securities. Without
receiving any instruction from any such Holder of Stripped Units, the Collateral
Agent shall apply such payments to the settlement of such Purchase Contracts on
the Stock Purchase Date pursuant to written instructions from the Purchase
Contract Agent. In the event the payments received in respect of the related
Pledged Treasury Securities are in excess of the aggregate Purchase
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Price of the Purchase Contracts being settled thereby, the Collateral Agent
shall distribute such excess, when received, to the Purchase Contract Agent for
payment to such Holders of Stripped Units.
(d) Pursuant to the Remarketing Agreement and Purchase Contract
Agreement, on or prior to the fourth Business Day preceding the first day of any
Remarketing Period, but no earlier than the Payment Date immediately preceding
the first day of such Remarketing Period, holders of Separate Notes may elect to
have their Separate Notes remarketed by delivering their Separate Notes,
together with a notice of such election, substantially in the form of Exhibit C
hereto, to the Custodial Agent. On the third Business Day prior to the first day
of any Remarketing Period, by 10:00 a.m., New York City time, the Custodial
Agent shall notify the Remarketing Agent of the principal amount of such
Separate Notes to be remarketed. The Custodial Agent will hold such Separate
Notes in an account separate from the Collateral Account. A holder of Separate
Notes electing to have its Separate Notes remarketed will also have the right to
withdraw such election by written notice to the Custodial Agent, substantially
in the form of Exhibit D hereto, on or prior to the fourth Business Day
immediately preceding the first day of any Remarketing Period, upon which notice
the Custodial Agent will return such Separate Notes to such holder. On the
Business Day immediately preceding the first day of any Remarketing Period, the
Custodial Agent will deliver to the Remarketing Agent for remarketing all
Separate Notes delivered to the Custodial Agent pursuant to this Section 4.5(d)
and not withdrawn pursuant to the terms hereof prior to such date. The portion
of the proceeds from such remarketing equal to the amount calculated in respect
of such Separate Notes as set forth in Section 5.4(b) of the Purchase Contract
Agreement will automatically be remitted by the Remarketing Agent to the
Custodial Agent for the benefit of the holders of such Separate Notes. In
addition, after deducting as the remarketing fee an amount not exceeding 25
basis points (.25%) of the total proceeds of such remarketing of such Separate
Notes, the Remarketing Agent will agree pursuant to the Remarketing Agreement to
remit to the Custodial Agent the remaining portion of the proceeds, if any, for
payment to such holders. If, despite using commercially reasonable best efforts,
the Remarketing Agent advises the Custodial Agent in writing that there has been
a Failed Remarketing, the Remarketing Agent will agree pursuant to the
Remarketing Agreement to promptly return such Notes to the Custodial Agent for
redelivery to the holders of such Separate Notes. For purposes of this Section
4.5(d), a "holder" of a Separate Notes shall mean the Person in whose name such
Separate Notes is registered on the books of the registrar for the Notes.
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ARTICLE V
VOTING RIGHTS -- NOTES
SECTION 5.1 Exercise by Purchase Contract Agent
The Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the Pledged Notes
or any part thereof for any purpose not inconsistent with the terms of this
Agreement and in accordance with the terms of the Purchase Contract Agreement;
provided that the Purchase Contract Agent shall 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 Notes; and provided, further, that the
Purchase Contract Agent shall give the Company and the Collateral Agent at least
five Business Days' prior written notice of the manner in which it intends to
exercise, or its reasons for refraining from exercising, any such right. Upon
receipt of any notices and other communications in respect of any Pledged Notes,
including notice of any meeting at which holders of Notes are entitled to vote
or solicitation of consents, waivers or proxies of holders of Notes, the
Collateral Agent shall use reasonable efforts to send promptly to the Purchase
Contract Agent such notice or communication, and as soon as reasonably
practicable after receipt of a written request therefor from the Purchase
Contract Agent, execute and deliver to the Purchase Contract Agent such proxies
and other instruments in respect of such Pledged Notes (in form and substance
satisfactory to the Collateral Agent) as are prepared by the Purchase Contract
Agent with respect to the Pledged Notes.
ARTICLE VI
RIGHTS AND REMEDIES; TAX EVENT REDEMPTION
SECTION 6.1 Rights and Remedies of the Collateral Agent
(a) In addition to the rights and remedies available at law or in
equity, after an event of default under the Purchase Contracts, 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 Notes or other Collateral in full satisfaction of
the Holders' obligations under the
15
Purchase Contracts or (ii) sale of the Pledged Notes or other Collateral in one
or more public or private sales or otherwise at the written direction of the
Company.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of any Pledged Treasury Consideration
or Pledged Treasury Securities as provided in Article III hereof in satisfaction
of the obligations of the Holder of the Units of which such Pledged Treasury
Consideration or Pledged Treasury Securities, as applicable, is a part under the
related Purchase Contracts, the inability to make such payments shall constitute
an event of default under the Purchase Contracts and the Collateral Agent shall
have and may exercise, with reference to such Pledged Treasury Securities or
such Pledged Treasury Consideration, as applicable, and such obligations of such
Holder, any and all of the rights and remedies available to a secured party
under the Code and the TRADES Regulations after default by a debtor, and as
otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of,
or interest on, the Pledged Notes, or (ii) the principal amount of the Pledged
Treasury Consideration or Pledged Treasury Securities, subject, in each case, to
the provisions of Article III, and as otherwise granted herein.
(d) The Purchase Contract Agent, individually and as attorney-in-fact
for each Holder of Units, agrees that, from time to time, upon the written
request of the Company or the Collateral Agent (acting upon the written request
of the Company), the Purchase Contract Agent or such Holder shall execute and
deliver such further documents and do such other acts and things as may be
necessary, including as the Company or the Collateral Agent (acting upon the
written request of the Company) may reasonably request in order to maintain the
Pledge, and the perfection and priority thereof, and to confirm the rights of
the Collateral Agent hereunder. The Purchase Contract Agent shall have no
liability to any Holder for executing any documents or taking any such acts
requested by the Company or the Collateral Agent (acting upon the written
request of the Company) hereunder, except for liability for its own negligent
act, its own negligent failure to act, its own bad faith or its own willful
misconduct.
SECTION 6.2 Substitutions
Whenever a Holder has the right to substitute Treasury Securities,
Notes, or Treasury Consideration, as the case may be, for Collateral held by the
Collateral Agent, such substitution shall not constitute a novation of the
security interest created hereby.
SECTION 6.3 Tax Event Redemption
Upon the occurrence of a Tax Event Redemption prior to the Stock
Purchase Date or the earlier successful remarketing of the Notes pursuant to
Section 5.4 of the Purchase
16
Contract Agreement and the receipt of the Redemption Price of the Pledged Notes
by the Collateral Agent, the Collateral Agent will, at the written direction of
the Company, apply the Redemption Price to purchase on behalf of the Holders of
Normal Units the Tax Event Redemption Treasury Consideration; provided, however,
that any amounts remaining after the purchase of the Tax Event Redemption
Treasury Consideration will be remitted promptly to the Purchase Contract Agent
for payment to the Holders of the Normal Units. The Collateral Agent shall
transfer the Tax Event Redemption Treasury Consideration to the Collateral
Account to secure the obligation of all Holders of Normal Units to purchase
Common Stock of the Company under the Purchase Contracts constituting a part of
such Normal Units, in substitution for the Pledged Notes. Thereafter the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Tax Event Redemption Treasury Consideration as it had in respect
of the Pledged Notes as provided in Articles II, III, IV, V and VI, and any
reference herein to the Notes shall be deemed to be reference to such Tax Event
Redemption Treasury Consideration, and any reference herein to interest on the
Notes shall be deemed to be a reference to corresponding distributions on such
Tax Event Redemption Treasury Consideration. Upon the occurrence of a Tax Event
Redemption, the Collateral Agent shall be authorized to surrender the Notes in
accordance with the provisions of the Indenture.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.1 Representations and Warranties of the Holders
The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any representation or warranty made by or on
behalf of a Holder), hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each day a Holder
Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and lien
on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and, in
the case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under Section 2.1;
(c) upon the Transfer of the Collateral to the Collateral Account, the
Collateral Agent, for the benefit of the Company, will have a valid and
perfected first priority security interest therein (assuming that any central
clearing operation or any Intermediary or other entity not within the control of
the Holder involved in the Transfer
17
of the Collateral, including the Collateral Agent, gives the notices and takes
the action required of it hereunder and under applicable law for perfection of
that interest and assuming the establishment and exercise of control pursuant to
Section 2.2); and
(d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security interest,
lien or other encumbrance on the Collateral other than the security interest and
lien granted under Section 2.1 or violate any provision of any existing law or
regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.
SECTION 7.2 Representations and Warranties of the Collateral Agent,
Custodial Agent and Securities Intermediary
The Collateral Agent, Custodial Agent and Securities Intermediary (each
an "Agent") hereby represents and warrants:
(a) The Collateral Agent, Custodial Agent and Securities Intermediary
is a banking corporation duly incorporated and validly existing under the laws
of the State of New York;
(b) The execution, delivery and performance by the Collateral Agent,
the Custodial Agent and the Securities Intermediary of this Agreement have each
been duly authorized by all necessary corporate action on the part of each such
Agent; this Agreement has been duly executed and delivered by the Collateral
Agent, the Custodial Agent and the Securities Intermediary and constitutes a
valid and legally binding obligation of each of the Agents, enforceable against
such Agents in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
(c) The execution, delivery and performance by the Collateral Agent,
the Custodial Agent and the Securities Intermediary of this Agreement do not
violate or constitute a breach of the Articles of Incorporation or By-Laws of
any of such Agents; and
(d) No consent of any federal or state banking authority is required
for the execution, delivery or performance by the Agents of their respective
obligations under this Agreement.
SECTION 7.3 Covenants
The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any covenant made by or on behalf of a Holder),
hereby covenant to the Collateral Agent that for so long as the Collateral
remains subject to the Pledge:
18
(a) neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other security interest whatsoever over the Collateral or any part of it other
than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the pledge hereunder,
transferred in connection with the Transfer of the Units.
ARTICLE VIII
THE COLLATERAL AGENT
SECTION 8.1 Appointment, Powers and Immunities
(a) The Collateral Agent shall act as agent for the Company hereunder
with such powers as are specifically vested in the Collateral Agent by the terms
of this Agreement, together with such other powers as are reasonably incidental
thereto. Each of the Collateral Agent, the Custodial Agent and the Securities
Intermediary:
(i) shall have no duties or responsibilities except those expressly
set forth in this Agreement and no implied covenants or
obligations shall be inferred from this Agreement against any of
them, nor shall any of them be bound by the provisions of any
agreement by any party hereto beyond the specific terms hereof;
(ii) shall not be responsible for any recitals contained in this
Agreement, or in any certificate or other document referred to or
provided for in, or received by it under, this Agreement, the
Units or the Purchase Contract Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement (other than as against the
Collateral Agent), the Units or the Purchase Contract Agreement
or any other document referred to or provided for herein or
therein or for any failure by the Company or any other Person
(except the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be) to perform any of
its obligations hereunder or thereunder or, except as expressly
required hereby, for the existence, validity, perfection,
priority or maintenance of any security interest created
hereunder;
(iii) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder (except in the case of the
Collateral Agent, pursuant to directions furnished under Section
8.2, subject to Section 8.6);
19
(iv) shall not be responsible for any action taken or omitted to be
taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith or
therewith, except for its own negligence, bad faith or willful
misconduct; and
(v) shall not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with
respect to, the Units or other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.
(b) No provision of this Agreement shall require the Collateral Agent,
the Custodial Agent or the Securities Intermediary to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder. In no event shall the Collateral Agent, the Custodial
Agent or the Securities Intermediary be liable for any amount in excess of the
value of the Collateral or for any special, indirect, individual, consequential
damages or lost profits or loss of business, arising in connection with this
Agreement. Notwithstanding the foregoing, the Collateral Agent, the Custodial
Agent, the Purchase Contract Agent and Securities Intermediary, each in its
individual capacity, hereby waive any right of set-off, banker's lien, liens or
perfection rights as securities intermediary or any counterclaim with respect to
any of the Collateral.
(c) The Collateral Agent, Custodial Agent and Securities Intermediary
shall have no liability whatsoever for the action or inaction of any Clearing
Agency or any book-entry system thereof. In no event shall any Clearing Agency
or any book-entry system thereof be deemed an agent or subcustodian of the
Collateral Agent, Custodial Agent and Securities Intermediary.
(d) The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall not be responsible or liable for any failure or delay in
the performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods, wars;
civil or military disturbances; sabotage; epidemics; riots; interruptions, loss
or malfunctions of utilities, computer (hardware or software) or communications
service; accidents; labor disputes; acts of civil or military authority;
governmental actions; or inability to obtain labor, material, equipment or
transportation.
SECTION 8.2 Instructions of the Company.
The 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, the Custodial Agent or the Securities
Intermediary, as the case may be, 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 that (i) such direction shall not
conflict with the provisions of any law or of this Agreement and (ii) the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall each
receive indemnity reasonably satisfactory to it as provided herein. Nothing in
this Section 8.2 shall impair the right of the Collateral Agent in its
discretion to take any action or omit to take any action which it deems proper
and which is not inconsistent with such direction.
20
SECTION 8.3 Reliance
Each of the Securities Intermediary, the Custodial Agent and the
Collateral Agent shall be entitled conclusively to rely upon any certification,
order, judgment, opinion, notice or other communication (including, without
limitation, any thereof by telephone or facsimile) reasonably believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons (without being required to determine the correctness of
any fact stated therein), and upon advice and statements of legal counsel and
other experts selected by the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be. As to any matters not expressly
provided for by this Agreement, the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall in all cases be fully protected in acting, or
in refraining from acting, hereunder in accordance with instructions given by
the Company in accordance with this Agreement.
SECTION 8.4 Rights in Other Capacities
The Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may (without having to account therefor to the
Company) accept deposits from, lend money to, make their investments in and
generally engage in any kind of banking, trust or other business with the
Purchase Contract Agent, any Holder of Units and any holder of Separate Notes
(and any of their respective subsidiaries or affiliates) as if it were not
acting as the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be, and the Collateral Agent, the Custodial Agent
and the Securities Intermediary and their affiliates may accept fees and other
consideration from the Purchase Contract Agent, any Holder of Units or any
holder of Separate Notes without having to account for the same to the Company;
provided that each of the Securities Intermediary, the Custodial Agent and the
Collateral Agent covenants and agrees with the Company that it shall not accept,
receive or permit there to be created in favor of itself (and waives any right
of set-off or banker's lien with respect to) and shall take no affirmative
action to permit there to be created in favor of any other Person, any security
interest, lien or other encumbrance of any kind in or upon the Collateral and
the Collateral shall not be commingled with any other assets of any such Person.
SECTION 8.5 Non-Reliance on Collateral Agent
None of the Securities Intermediary, the Custodial Agent or the
Collateral Agent shall be required to keep itself informed as to the performance
or observance by the Purchase Contract Agent or any Holder of Units of this
Agreement, the Purchase Contract Agreement, the Units or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Purchase Contract Agent or any Holder of Units. The Collateral
Agent, the Custodial Agent and the Securities Intermediary shall not have any
duty or responsibility to provide the Company or the Remarketing Agent with any
credit or other information concerning the affairs, financial condition or
business of the Purchase Contract Agent, any Holder of Units or any holder
21
of Separate Notes (or any of their respective subsidiaries or affiliates) that
may come into the possession of the Collateral Agent, the Custodial Agent or the
Securities Intermediary or any of their respective affiliates.
SECTION 8.6 Compensation and Indemnity
The Company agrees:
(a) to pay each of the Collateral Agent, the Custodial Agent and the
Securities Intermediary from time to time such compensation as shall be agreed
in writing between the Company and the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, for all services rendered by each
of them hereunder and
(b) to indemnify the Collateral Agent, the Custodial Agent and the
Securities Intermediary (which for purposes of this paragraph, in each case,
shall include its directors, officers, employees and agents) for, and to hold
each of them harmless from and against, any loss, liability or reasonable
out-of-pocket expense incurred without negligence, willful misconduct or bad
faith on its part, arising out of or in connection with the acceptance or
administration of its powers and duties under this Agreement, including the
reasonable out-of-pocket costs and expenses (including reasonable fees and
expenses of counsel) of defending itself against any claim or liability in
connection with the exercise or performance of such powers and duties or
collecting such amounts. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall each promptly notify the Company of any third
party claim which may give rise to the indemnity hereunder and give the Company
the opportunity to control 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, Custodial Agent and the Securities Intermediary shall be
entitled, after prompt notice to the Company and the Purchase Contract Agent, at
its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and neither the Collateral Agent, Custodial Agent nor
the Securities Intermediary shall be or become liable in any way to any of the
parties hereto for its failure or refusal to comply with such conflicting
claims, demands or instructions. The Collateral Agent, Custodial Agent and the
Securities Intermediary shall be entitled to refuse to act until either (i) such
conflicting or adverse claims or demands shall have been finally determined by a
court of competent jurisdiction or settled by agreement between the conflicting
parties as evidenced in a writing, reasonably satisfactory to the Collateral
Agent, Custodial Agent or the Securities Intermediary, as the case may be, or
(ii) the Collateral Agent, the Custodial Agent or the Securities
22
Intermediary, as the case may be, shall have received security or an indemnity
reasonably satisfactory to the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, sufficient to save the Collateral
Agent, Custodial Agent or the Securities Intermediary, as the case may be,
harmless from and against any and all loss, liability or reasonable
out-of-pocket expense which the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, may incur by reason of its acting
without bad faith, willful misconduct or negligence. The Collateral Agent,
Custodial Agent or the Securities Intermediary may in addition elect to commence
an interpleader action or seek other judicial relief or orders as the Collateral
Agent, Custodial Agent or the Securities Intermediary, as the case may be, may
deem necessary. Notwithstanding anything contained herein to the contrary,
neither the Collateral Agent, Custodial Agent nor the Securities Intermediary
shall be required to take any action that is in its reasonable opinion contrary
to law or to the terms of this Agreement, or which would in its reasonable
opinion subject it or any of its officers, employees or directors to liability.
SECTION 8.8 Resignation
Subject to the appointment and acceptance of a successor Collateral
Agent, Custodial Agent or Securities Intermediary, as provided below, (a) the
Collateral Agent, Custodial Agent and the Securities Intermediary may resign at
any time by giving notice thereof to the Company and the Purchase Contract Agent
as attorney-in-fact for the Holders of Units, (b) the Collateral Agent,
Custodial Agent and the Securities Intermediary may be removed at any time by
the Company and (c) if the Collateral Agent, Custodial Agent or the Securities
Intermediary fails to perform any of its material obligations hereunder in any
material respect for a period of not less than 20 days after receiving written
notice of such failure by the Purchase Contract Agent and such failure shall be
continuing, the Collateral Agent, Custodial Agent or the Securities Intermediary
may be removed by the Purchase Contract Agent. The Purchase Contract Agent shall
promptly notify the Company of any removal of the Collateral Agent, the
Custodial Agent or the Securities Intermediary pursuant to clause (c) of the
immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be. If no successor Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's, Custodial Agent's or Securities
Intermediary's giving of notice of resignation or such removal, then the
retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, may at the Company's expense petition any court of competent
jurisdiction for the appointment of a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be. Upon removal of the
Collateral Agent, Custodial Agent or Securities Intermediary, no fees paid to
the retiring Collateral Agent, Custodial Agent or Securities Intermediary
pursuant to Section 8.6(a) of this Agreement shall be refunded. Each of the
Collateral Agent, Custodial Agent and the Securities Intermediary shall be a
bank which has an office in New York, New York with a combined capital and
surplus of at least $50,000,000. Upon the acceptance of any appointment as
Collateral Agent, Custodial
23
Agent or Securities Intermediary, as the case may be, hereunder by a successor
Collateral Agent, Custodial Agent or Securities Intermediary, as the case may
be, such successor shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, and the retiring
Collateral Agent, Custodial Agent or Securities Intermediary, as the case may
be, shall take all appropriate action to transfer any money and property held by
it hereunder (including the Collateral) to such successor. The retiring
Collateral Agent, Custodial Agent or Securities Intermediary shall, upon such
succession, be discharged from its duties and obligations as Collateral Agent,
Custodial Agent or Securities Intermediary hereunder. After any retiring
Collateral Agent's, Custodial Agent's or Securities Intermediary's resignation
hereunder as Collateral Agent, Custodial Agent or Securities Intermediary, the
provisions of this Section 8.8 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Collateral Agent, Custodial Agent or Securities Intermediary. Any
resignation or removal of the Collateral Agent hereunder shall be deemed for all
purposes of this Agreement as the simultaneous resignation or removal of the
Custodial Agent and the Securities Intermediary hereunder.
Any corporation into which the Collateral Agent, the Custodial Agent or
the Securities Intermediary, in its individual capacity, may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Collateral Agent in
its individual capacity shall be a party, or any corporation to which
substantially all the corporate trust business of the Collateral Agent in its
individual capacity may be transferred, shall be the Collateral Agent, the
Custodial Agent, or the Securities Intermediary, as the case may be,
respectively, under this Agreement without further act.
SECTION 8.9 Right to Appoint Agent or Advisor
The Collateral Agent shall have the right to appoint agents or advisors
in connection with any of its duties hereunder, and the Collateral Agent shall
not be liable for any action taken or omitted by, or in reliance upon the advice
of, such agents or advisors selected in good faith. The appointment of agents
(other than legal counsel) pursuant to this Section 8.9 shall be subject to
prior consent of the Company, which consent shall not be unreasonably withheld.
SECTION 8.10 Survival
The provisions of this Article VIII shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent, the Custodial
Agent or the Securities Intermediary.
SECTION 8.11 Exculpation
Anything in this Agreement to the contrary notwithstanding, in no event
shall any of the Collateral Agent, the Custodial Agent or the Securities
Intermediary or their
24
officers, employees or agents be liable under this Agreement to any third party
for indirect, special, punitive or consequential loss or damage of any kind
whatsoever, including lost profits, whether or not the likelihood of such loss
or damage was known to the Collateral Agent, the Custodial Agent or the
Securities Intermediary, or any of them, incurred without any act or deed that
is found to be attributable to negligence, bad faith or willful misconduct on
the part of the Collateral Agent, the Custodial Agent or the Securities
Intermediary.
ARTICLE IX
AMENDMENT
SECTION 9.1 Amendment Without Consent of Holders
Without the consent of any Holders or the holders of any Separate
Notes, the Company, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent, at any time and from time to time,
may amend this Agreement, in form satisfactory to the Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent, for any of the following purposes:
(i) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the
Company; or
(ii) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon
the Company so long as such covenants or such surrender do not
adversely affect the validity, perfection or priority of the
security interests granted or created hereunder; or
(iii) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Custodial Agent,
Securities Intermediary or Purchase Contract Agent; or
(iv) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other such provisions
herein, or to make any other provisions with respect to such
matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
SECTION 9.2 Amendment with Consent of Holders
With the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of said Holders delivered to
the Company, the Purchase Contract Agent or the Collateral Agent, as the case
may be, the Company, when
25
duly authorized, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Units; provided that no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Unit adversely affected thereby,
(i) change the amount or type of Collateral underlying a Unit (except
for the rights of holders of Normal Units to substitute the
Treasury Securities for the Pledged Notes or the Pledged Treasury
Consideration, as the case may be, or the rights of Holders of
Stripped Units to substitute Notes or the appropriate Treasury
Consideration, as applicable, for the Pledged Treasury
Securities), impair the right of the Holder of any Unit to
receive distributions on the underlying Collateral or otherwise
adversely affect the Holder's rights in or to such Collateral; or
(ii) otherwise effect any action that would require the consent of the
Holder of each Outstanding Unit affected thereby pursuant to the
Purchase Contract Agreement if such action were effected by an
agreement supplemental thereto; or
(iii) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
SECTION 9.3 Execution of Amendments
In executing any amendment permitted by this Article IX, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent shall be entitled to receive and (subject to Section 8.1 hereof,
with respect to the Collateral Agent, and Section 7.1 of the Purchase Contract
Agreement, with respect to the Purchase Contract Agent) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such amendment have been
satisfied and, in the case of an amendment pursuant to Section 9.1, that such
amendment does not adversely affect the validity, perfection or priority of the
security interests granted or created hereunder.
SECTION 9.4 Effect of Amendments
Upon the execution of any amendment under this Article IX, this
Agreement shall be modified in accordance therewith, and such amendment shall
form a part of this Agreement for all purposes; and every Holder of Certificates
theretofore or thereafter
26
authenticated, executed on behalf of the Holders and delivered under the
Purchase Contract Agreement shall be bound thereby.
SECTION 9.5 Reference to Amendments
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any amendment pursuant to this Article IX may,
and shall if required by the Collateral Agent or the Purchase Contract Agent,
bear a notation in form approved by the Purchase Contract Agent as to any matter
provided for in such amendment. If the Company shall so determine, new
Certificates so modified as to conform, in the opinion of the Purchase Contract
Agent and the Company, to any such amendment may be prepared and executed by the
Company and authenticated, executed on behalf of the Holders and delivered by
the Purchase Contract Agent in accordance with the Purchase Contract Agreement
in exchange for outstanding Certificates.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 No Waiver
No failure on the part of any party hereto or any of its agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by any party hereto or any of its agents of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
are cumulative and are not exclusive of any remedies provided by law.
SECTION 10.2 GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF. Without limiting the foregoing, the above choice of law is
expressly agreed to by the Securities Intermediary, the Collateral Agent, the
Custodial Agent and the Holders from time to time acting through the Purchase
Contract Agent, as their attorney-in-fact, in connection with the establishment
and maintenance of the Collateral Account, which law, for purposes of the Code,
shall be deemed to be the law governing all Security Entitlements related
thereto. In addition, such parties agree that, for purposes of the Code, New
York shall be the Securities Intermediary's jurisdiction. The Company, the
Collateral Agent and the Holders from time to time of the Units, acting through
the Purchase Contract Agent as their attorney-in-fact, hereby submit to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York state court sitting in the Borough of
Manhattan in New York City for the purposes of all legal proceedings arising out
of or relating to this Agreement or the transactions contemplated
27
hereby. The Company, the Collateral Agent and the Holders from time to time of
the Units, acting through the Purchase Contract Agent as their attorney-in-fact,
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
SECTION 10.3 Notices
Unless otherwise stated herein, all notices, requests, consents and
other communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when personally delivered or, in the case of a mailed notice or
notice transmitted by telecopier, upon receipt, in each case given or addressed
as aforesaid.
SECTION 10.4 Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
and the Holders from time to time of the Units, by their acceptance of the same,
shall be deemed to have agreed to be bound by the provisions hereof and to have
ratified the agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.
SECTION 10.5 Counterparts
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
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.
28
SECTION 10.7 Expenses, Etc.
The Company agrees to reimburse the Collateral Agent, the Securities
Intermediary and the Custodial Agent for:
(a) all reasonable out-of-pocket costs and all reasonable expenses of
the Collateral Agent, the Custodial Agent and the Securities Intermediary
(including, without limitation, the reasonable fees and expenses of counsel to
the Collateral Agent, the Custodial Agent and the Securities Intermediary), in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver of
any of the terms of this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent (which
for purposes of this paragraph shall include its directors, officers, employees
and agents) (including, without limitation, reasonable fees and expenses of
counsel) in connection with (i) any enforcement or proceedings resulting or
incurred in connection with causing any Holder of Units to satisfy its
obligations under the Purchase Contracts forming a part of the Units and (ii)
the enforcement of this Section 10.7; and
(c) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any other document referred to herein and all
costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated hereby.
SECTION 10.8 Security Interest Absolute
All rights of the Collateral Agent and security interests hereunder,
and all obligations of the Holders from time to time hereunder, shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Units or any other agreement or instrument relating
thereto;
(b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of Units under the related Purchase Contracts, or any other amendment or
waiver of any term of, 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.
29
SECTION 10.9 Waiver of Jury Trial
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
HOUSEHOLD INTERNATIONAL, INC.
By:
----------------------------------------
Name:
Title:
Address for Notices:
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
THE BANK OF NEW YORK,
as Purchase Contract Agent and
as attorney-in-fact of the Holders
from time to time of the Units
By:
----------------------------------------
Name:
Title:
Address for Notices:
Xxxxx 0000
0 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
JPMORGAN CHASE BANK,
as Collateral Agent, Custodial Agent
and Securities Intermediary
By:
----------------------------------------
Name:
Title:
Address for Notices:
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Telecopy: 000-000-0000
Telephone: 000-000-0000
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT
AGENT TO COLLATERAL AGENT
JPMorgan Chase Bank
4 New York Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Re: 8.875% Adjustable Conversion-Rate Equity Security
Units of Household International, Inc. (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of October 30, 2002, (the "Pledge Agreement") among
the Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Normal Units] [Stripped Units] from time to time, that the
holder of Units listed below (the "Holder") has elected to substitute [$_____
aggregate principal amount of Treasury Securities (CUSIP No. _____)] [$_______
aggregate principal amount of Notes or $_____ aggregate principal amount of
Treasury Consideration (CUSIP No. _____)] in exchange for the related [Pledged
Notes or Pledged Treasury Consideration] [Pledged Treasury Securities] held by
you in accordance with the Pledge Agreement and has delivered to us a notice
stating that the Holder has Transferred [Treasury Securities] [Notes or the
Treasury Consideration] to you, as Collateral Agent. We hereby instruct you,
upon receipt of such [Pledged Treasury Securities] [Pledged Notes or Pledged
Treasury Consideration], to release the [Notes or the Treasury Consideration]
[Treasury Securities] related to such [Normal Units] [Stripped Units] to us in
accordance with the Holder's instructions. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Date: ________________
THE BANK OF NEW YORK,
as Purchase Contract Agent
By: _____________________
Name:
Title:
A-1
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Notes or Treasury Consideration] for the [Pledged Notes
or the Pledged Treasury Consideration] [Pledged Treasury Securities]:
Name: Social Security or other Taxpayer
Identification Number, if any:
Address:
A-2
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
as Purchase Contract Agent
Suite 1020
0 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Re: 8.875% Adjustable Conversion-Rate Equity Security
Units of Household International, Inc. (the "Company")
The undersigned Holder hereby notifies you that it has delivered to
JPMorgan Chase Bank, as Collateral Agent, [$_______ aggregate principal amount
of Treasury Securities (CUSIP No. _____)] [$_______ aggregate principal amount
of Notes or $_____ principal amount of Treasury Consideration (CUSIP No. _____)]
in exchange for the related [Pledged Notes or Pledged Treasury Consideration]
[Pledged Treasury Securities] held by the Collateral Agent, in accordance with
Section 4.1 of the Pledge Agreement, dated as of October 30, 2002 (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 Notes or the Pledged Treasury
Consideration] [Pledged Treasury Securities] related to such [Normal Units]
[Stripped Units]. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.
Date: ___________________ Signature:__________________________
Signature Guarantee: _______________
Please print name and address of Registered Holder:
Name: Social Security or other Taxpayer
Identification Number, if any:
Address:
B-1
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
JPMorgan Chase Bank
4 New York Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Re: Notes of Household Finance Corporation
The undersigned hereby notifies you in accordance with Section 4.5(d)
of the Pledge Agreement, dated as of October 30, 2002 (the "Pledge Agreement"),
among Household International, Inc., yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent, and The Bank of New York, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Normal Units and Stripped Units
from time to time, that the undersigned elects to deliver on the fourth Business
Day immediately preceding the first day of the Remarketing Period commencing on
__________, [2005][2006] $__________ aggregate principal amount of Notes for
delivery to the Remarketing Agent for remarketing pursuant to Section 4.5(d) of
the Pledge Agreement. The undersigned will, upon request of the Remarketing
Agent, execute and deliver any additional documents deemed by the Remarketing
Agent or by the Company to be necessary or desirable to complete the sale,
assignment and transfer of the Notes tendered hereby.
The undersigned hereby instructs you, upon receipt of the proceeds of
such remarketing from the Remarketing Agent, net of amounts payable to the
Remarketing Agent in accordance with the Pledge Agreement, to deliver such
proceeds to the undersigned in accordance with the instructions indicated herein
under "A. Payment Instructions." The undersigned hereby instructs you, in the
event of [a/the Last] Failed Remarketing upon receipt of the Notes tendered
herewith from the Remarketing Agent, to deliver such Notes 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 Notes tendered hereby and that the undersigned is the record owner
of any Notes tendered herewith in physical form or a participant in The
Depository Trust Company ("DTC") and the beneficial owner of any Notes tendered
herewith by book-entry transfer to your account at DTC and (ii) agrees to be
bound by the terms and conditions of Section 4.5(d) of the Pledge Agreement.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date: _______________
Signature:__________________________
C-1
Signature Guarantee:
Name: ________________________________
(Please Print)
Address: ________________________________
(Please Print)
Country:
Zip Code:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Tax Identification or Social Security Number):
A. PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
Name(s): ________________________________
(Please Print)
Address: ________________________________
(Please Print)
Zip Code:
Country:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Tax Identification or Social Security Number):
C-2
B. DELIVERY INSTRUCTIONS
In the event of [a/the Last] Failed Remarketing, Notes which are in physical
form should be delivered to the person(s) set forth below and mailed to the
address set forth below.
Name(s): ________________________________
(Please Print)
Address: ________________________________
(Please Print)
Zip Code:
Country:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Tax Identification or Social Security Number):
In the event of [a/the Last] Failed Remarketing, Notes which are in book-entry
form should be credited to the account at The Depository Trust Company set forth
below.
Name of Account Party: DTC Account Number:
C-3
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
JPMorgan Chase Bank
4 New York Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Re: Notes of Household Finance Corporation
The undersigned hereby notifies you in accordance with Section 4.5(d)
of the Pledge Agreement, dated as of October 30, 2002 (the "Pledge Agreement"),
among Household International, Inc., yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent, and The Bank of New York, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Normal Units and Stripped Units
from time to time, that the undersigned elects to withdraw the $_____ aggregate
principal amount of Notes delivered to the Custodial Agent on ___________,
[2005][2006] for remarketing pursuant to Section 4.5(d) of the Pledge Agreement.
The undersigned hereby instructs you to return such Notes to the undersigned in
accordance with the undersigned's instructions. With this notice, the
undersigned hereby agrees to be bound by the terms and conditions of Section
4.5(d) of the Pledge Agreement. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date: _______________
Signature:_______________________
Signature Guarantee:
Name(s): _____________________________
(Please Print)
Address: _____________________________
(Please Print)
Zip Code:
Country:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Tax Identification or Social Security Number):
D-1
A. DELIVERY INSTRUCTIONS
In the event of [a/the Last] Failed Remarketing, Notes which are in physical
form should be delivered to the person(s) set forth below and mailed to the
address set forth below.
Name(s): ________________________________
(Please Print)
Address: ________________________________
(Please Print)
Zip Code:
Country:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Tax Identification or Social Security Number):
In the event of [a/the Last] Failed Remarketing, Notes which are in book-entry
form should be credited to the account at The Depository Trust Company set forth
below.
Name of Account Party: DTC Account Number:
D-2
