EXHIBIT 4(Y)
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FPL GROUP, INC.
-----------------,
as Collateral Agent, Custodial Agent
and Securities Intermediary
AND
------------------------
as Purchase Contract Agent
PLEDGE AGREEMENT
DATED AS OF ____________ __, ______
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TABLE OF CONTENTS
Page
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RECITALS .................................................................1
ARTICLE I. Definitions.........................................................2
ARTICLE II. Pledge; Control and Perfection.....................................5
SECTION 2.1 The Pledge.......................................................5
SECTION 2.2 Control and Perfection...........................................7
ARTICLE III. Distributions on Pledged Collateral...............................8
ARTICLE IV. Substitution, Release, Repledge and Settlement of Debentures.......9
SECTION 4.1 Substitution for Debentures and the Creation of
Type B Securities................................................9
SECTION 4.2 Substitution of Treasury Securities and the Creation of
Type A Securities...............................................10
SECTION 4.3 Termination Event...............................................11
SECTION 4.4 Cash Settlement.................................................12
SECTION 4.5 Early Settlement................................................13
SECTION 4.6 Application of Proceeds Settlement..............................13
ARTICLE V. Voting Rights-- Debentures........................................15
ARTICLE VI. Rights and Remedies; Distribution of the Debentures; Tax
Event Redemption................................................16
SECTION 6.1 Rights and Remedies of the Collateral Agent.....................16
SECTION 6.2 Tax Event Redemption............................................17
SECTION 6.3 Substitutions...................................................17
ARTICLE VII. Representations and Warranties; Covenants........................17
SECTION 7.1 Representations and Warranties..................................17
SECTION 7.2 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........................................................20
SECTION 8.4 Rights in Other Capacities......................................20
SECTION 8.5 Non-Reliance....................................................21
SECTION 8.6 Compensation and Indemnity......................................21
SECTION 8.7 Failure to Act..................................................21
SECTION 8.8 Resignation of Collateral Agent.................................22
SECTION 8.9 Right to Appoint Agent or Advisor...............................23
SECTION 8.10 Survival........................................................23
SECTION 8.11 Exculpation.....................................................23
ARTICLE IX. Amendment ........................................................23
SECTION 9.1 Amendment Without Consent of Holders............................23
SECTION 9.2 Amendment with Consent of Holders...............................24
SECTION 9.3 Execution of Amendments.........................................25
SECTION 9.4 Effect of Amendments............................................25
SECTION 9.5 Reference to Amendments.........................................25
ARTICLE X. Miscellaneous .....................................................26
SECTION 10.1 No Waiver.......................................................26
SECTION 10.2 Governing Law...................................................26
SECTION 10.3 Notices.........................................................26
SECTION 10.4 Successors and Assigns..........................................27
SECTION 10.5 Counterparts....................................................27
SECTION 10.6 Severability....................................................27
SECTION 10.7 Expenses, etc...................................................27
SECTION 10.8 Security Interest Absolute......................................27
EXHIBIT A Instruction From Purchase Contract Agent To Collateral Agent...A-1
EXHIBIT B Instruction To Purchase Contract Agent.........................B-1
EXHIBIT C Instruction To Custodial Agent Regarding Remarketing...........C-1
EXHIBIT D Instruction To Custodial Agent Regarding Withdrawal
From Remarketing...............................................D-1
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PLEDGE AGREEMENT, dated as of _________, ________ (this "Agreement"), by
and among FPL Group, Inc., a Florida corporation (the "Company"), as pledgee,
___________, 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 a "securities intermediary" as defined
in Section 8-102(a)(14) of the Code (as defined herein) (in such capacity,
together with its successors in such capacity, the "Securities Intermediary"),
and ___________, not individually but solely as purchase contract agent and as
attorney-in-fact of the Holders (as defined in the Purchase Contract Agreement)
from time to time of the Securities (as hereinafter defined) (in such capacity,
together with its successors in such capacity, the "Purchase Contract Agent")
under the Purchase Contract Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement, dated as of the date hereof (as modified and supplemented
and in effect from time to time, the "Purchase Contract Agreement"), pursuant to
which there may be issued up to __________ new securities (the "New Securities")
of the Company, having a stated amount of $____ (the "Stated Amount") per New
Security.
The New Securities will initially consist of (A) _______ units (referred to
as "Type A Securities") with a face amount, per Type A Security, equal to the
Stated Amount and (B) _________ units (referred to as "Type B Securities" and,
together with the Type A Securities, the "Securities") with a face amount, per
Type B Security, equal to the Stated Amount. Each Type A Security will initially
be comprised of (a) a stock purchase contract (as modified and supplemented and
in effect from time to time, a "Purchase Contract") under which (i) the Holder
will purchase from the Company on _________ (the "Purchase Contract Settlement
Date"), for an amount of cash equal to the Stated Amount, a number of newly
issued shares of common stock, $.01 par value per share (the "Common Stock"), of
the Company equal to the applicable Settlement Rate (as defined in the Purchase
Contract Agreement), and (ii) the Company will pay the Holder Contract
Adjustment Payments (as defined below) at the rate of __% of the Stated Amount
per annum, and (b) either beneficial ownership of a Debenture (as defined below)
or following the occurrence of a Tax Event Redemption, the Applicable Ownership
Interest in the Treasury Portfolio (as defined in the Purchase Contract
Agreement). Each Type B Security will initially be comprised of (a) a Purchase
Contract under which (i) the Holder will purchase from the Company on the
Purchase Contract Settlement Date, for an amount in cash equal to the Stated
Amount, a number of newly issued shares of Common Stock of the Company, equal to
the applicable Settlement Rate, and (ii) the Company will pay the Holder
Contract Adjustment Payments (as defined below) at the rate of __% of the Stated
Amount per annum, and (b) a ____ undivided beneficial interest in a zero-coupon
U.S. Treasury Security having a principal amount at maturity equal to [$1,000]
and maturing on ________ (CUSIP No. ________) (the "Treasury Securities").
Pursuant to the terms of the Indenture (as defined below), FPL Group
Capital Inc, a Florida corporation and wholly-owned subsidiary of the Company
("FPL Group Capital"), will
issue _____ ____ Debentures, Series due _______ (the "Debentures") in an
aggregate principal amount equal to the aggregate Stated Amount of all Type A
Securities.
Pursuant to the terms of the Purchase Contract Agreement and the Purchase
Contracts, the Holders, from time to time, of the Securities have irrevocably
authorized the Purchase Contract Agent, as attorney-in-fact of such Holders,
among other things, to execute and deliver this Agreement on behalf of such
Holders and to grant the pledge provided hereby of the Debentures, any
Applicable Ownership Interest in the Treasury Portfolio and any Treasury
Securities to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof. Upon such pledge,
the Debentures will be beneficially owned by the Holders but will be owned of
record by the Purchase Contract Agent subject to the Pledge hereunder, and the
Type B Securities (and the appropriate Applicable Ownership Interest in the
Treasury Portfolio) will be beneficially owned by the Holders but will be held
in book-entry form by the Securities Intermediary subject to the pledge
hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own
behalf and as attorney-in-fact of the Holders from time to time of the
Securities, agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(c) terms not otherwise defined herein are used herein with the
meaning ascribed to them in the Purchase Contract Agreement.
"AGREEMENT" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"BANKRUPTCY CODE" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or any other
day on which banking institutions in The City of New York (in the State of New
York) are permitted or required by any applicable law to close.
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"CASH" means any coin or currency of the United States as at the time shall
be legal tender for payment of public and private debts.
"CODE" has the meaning specified in Section 6.1 hereof.
"COLLATERAL" has the meaning specified in Section 2.1 hereof.
"COLLATERAL ACCOUNT" means the securities account (number _____) maintained
at ____________ in the name "__________,"as Purchase Contract Agent on behalf of
the Holders of Securities subject to the security interest of __________ as
Collateral Agent under the Agreement, for the benefit of FPL Group, Inc., as
pledgee and any successor account.
"COLLATERAL AGENT" has the meaning specified in the first paragraph of this
Agreement.
"COMMON STOCK" has the meaning specified in the Recitals.
"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.
"DEBENTURES" has the meaning specified in the Recitals.
"FPL GROUP CAPITAL" has the meaning specified in the Recitals.
"INDENTURE" means the Indenture (For Unsecured Debt Securities), dated as
of June 1, 1999, between FPL Group Capital and the Indenture Trustee pursuant to
which the Debentures are to be issued, as originally executed and delivered and
as it may from time to time be supplemented or amended by one or more indentures
supplemental thereto entered into pursuant to the applicable provisions thereof
and shall include the terms of a particular series of securities established as
contemplated by Section 301 thereof.
"INDENTURE TRUSTEE" means The Bank of New York, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"INTERMEDIARY" means any entity that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"PERMITTED INVESTMENTS" means any one of the following which shall mature
not later than the next succeeding Business Day (i) any evidence of indebtedness
with an original maturity of 365 days or less issued, or directly and fully
guaranteed or insured, by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof or such indebtedness constitutes
a general obligation of it); (ii) deposits, certificates of deposit or
acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than U.S. $200 million at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is
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fully and unconditionally guaranteed by a bank referred to in clause (ii); (iv)
investments in commercial paper, other than commercial paper issued by the
Company or its affiliates, of any corporation incorporated under the laws of the
United States or any State thereof, which commercial paper has a rating at the
time of purchase at least equal to "A-1" by Standard & Poor's Ratings Group, a
division of XxXxxx-Xxxx Companies, Inc. ("S&P"), or at least equal to "P-1" by
Xxxxx'x Investors Service, Inc. ("Moody's"); and (v) investments in money market
funds registered under the Investment Company Act of 1940, as amended, rated in
the highest applicable rating category by S&P or Moody's.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PLEDGE" has the meaning specified in Section 2.1 hereof.
"PLEDGED DEBENTURES" has the meaning specified in Section 2.1 hereof.
"PLEDGED SECURITIES" 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" has the meaning specified in the Recitals.
"PURCHASE CONTRACT AGENT" has the meaning specified in the first paragraph
of this Agreement.
"PURCHASE CONTRACT AGREEMENT" has the meaning specified in the Recitals.
"REMAINING STATED AMOUNT" means $_____.
"SECURITIES" has the meaning specified in the Recitals.
"SECURITIES INTERMEDIARY" has the meaning specified in the first paragraph
of this Agreement.
"SECURITY ENTITLEMENT" has the meaning set forth in Section 8-102(a)(17) of
the Code.
"SEPARATE DEBENTURES" means any Debentures that are not Pledged Debentures.
"STATED AMOUNT" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.
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"TRADES REGULATIONS" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations are
used herein as therein defined.
"TRANSFER" means, with respect to the Collateral and in accordance with the
instructions of the Collateral Agent, the Purchase Contract Agent or the Holder,
as applicable:
(i) except as otherwise provided in Section 2.1 hereof, 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; and
(ii) in the case of Collateral consisting of securities maintained in
book-entry form by causing a "securities intermediary" (as
defined in Section 8-102(a)(14) of the Code) to (i) credit a
"security entitlement" (as defined in Section 8-102(a)(17) of the
Code) with respect to such securities to a "securities account"
(as defined in Section 8-501(a) of the Code) maintained by or on
behalf of the recipient and (ii) to issue a confirmation to the
recipient with respect to such credit. In the case of Collateral
to be delivered to the Collateral Agent, the securities
intermediary shall be the Securities Intermediary and the
securities account shall be the Collateral Account.
"TREASURY SECURITY" has the meaning specified in the Recitals.
"VALUE" with respect to any item of Collateral on any date means, as to (i)
Debentures, the aggregate principal amount thereof, (ii) Cash, the face amount
thereof and (iii) Treasury Securities, the aggregate principal amount thereof at
maturity.
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
SECTION 2.1 THE PLEDGE
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
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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 such Holders and the Purchase Contract Agent (a) in the Debentures
and Treasury Securities constituting a part of the Securities and any Treasury
Securities delivered in exchange for any Debentures, and any Debentures
delivered in exchange for any Treasury Securities, in accordance with Article IV
hereof, in each case that have been Transferred to or received by the Collateral
Agent and not released by the Collateral Agent to such Holders under the
provisions of this Agreement; (b) in payments made by Holders pursuant to
Section 4.4; (c) in the Collateral Account and all securities, financial assets,
Cash and other property credited thereto and all Security Entitlements related
thereto; (d) in the Applicable Ownership Interest in the Treasury Portfolio
purchased on behalf of the Holders of Type A Securities by the Collateral Agent
upon the occurrence of a Tax Event Redemption as provided in Section 6.2 and (e)
all Proceeds of the foregoing (all of the foregoing, collectively, the
"Collateral"). Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Securities, shall cause the Debentures comprising a part of the Type A
Securities, and the Treasury Securities comprising a part of the Type B
Securities, to be Transferred to the Collateral Agent for the benefit of the
Company. Such Debentures shall be Transferred by physically delivering such
Debentures to the Collateral Agent endorsed in blank. Treasury Securities and
the Treasury Portfolio, as applicable, shall be Transferred to the Collateral
Account maintained by the Collateral Agent at the Securities Intermediary by
book-entry transfer to the Collateral Account in accordance with the TRADES
Regulations and other applicable law and by the notation by the Securities
Intermediary on its books that a Security Entitlement with respect to such
Treasury Securities or Treasury Portfolio, has been credited to the Collateral
Account. For purposes of perfecting the Pledge under applicable law, including,
to the extent applicable, the TRADES Regulations or the Uniform Commercial Code
as adopted and in effect in any applicable jurisdiction, the Collateral Agent
shall be the agent of the Company as provided herein. The pledge provided in
this Section 2.1 is herein referred to as the "Pledge" and the Debentures,
Treasury Securities or Treasury Portfolio subject to the Pledge, excluding any
Debentures or Treasury Securities or interest in the Treasury Portfolio released
from the Pledge as provided in Article IV hereof, are hereinafter referred to as
"Pledged Debentures", the "Pledged Treasury Securities," or "Pledged Applicable
Ownership Interest in the Treasury Portfolio," respectively, and collectively,
the "Pledged Securities." 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. The Collateral Agent shall have the right to have the
Debentures or any other Securities held in physical form reregistered in its
name or in the name of its agent or the Securities Intermediary and credited to
the Collateral Account.
Except as may be required in order to release Debentures (or if a Tax Event
Redemption has occurred, the Applicable Ownership Interest in the Treasury
Portfolio) or Treasury Securities in connection with a Holder's election to
convert its investment from Type A Securities to Type B Securities, or from Type
B Securities to Type A Securities, as the case may be, or except as otherwise
required to release Pledged Securities as specified herein, neither the
Collateral Agent nor the Securities Intermediary shall relinquish physical
possession of any certificate evidencing Debentures (or if a Tax Event
Redemption has occurred, the Applicable Ownership Interest in the Treasury
Portfolio) or Treasury Securities prior to the termination of this Agreement. If
it becomes necessary for the Collateral Agent to relinquish physical possession
of a certificate in order to release a portion of the Debentures evidenced
thereby from the Pledge,
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the Collateral Agent shall use its best efforts to obtain physical possession of
a replacement certificate evidencing any Debentures remaining subject to the
Pledge hereunder registered to it or endorsed in blank within ten days of the
date it relinquished possession. The Collateral Agent shall promptly notify the
Company of its failure to obtain possession of any such replacement certificate
as required hereby.
SECTION 2.2 CONTROL AND PERFECTION
(a) In connection with the Pledge granted in Section 2.1, and subject
to the other provisions of this Agreement, the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, hereby authorize
and direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent on behalf of the Company may give in writing with respect to
the Collateral Account, the Collateral credited thereto and any Security
Entitlements with respect to any thereof. Such instructions and entitlement
orders may, without limitation, direct the Securities Intermediary to transfer,
redeem, sell, liquidate, assign, deliver or otherwise dispose of the Debentures,
the Treasury Securities, the Treasury Portfolio and any Security Entitlements
with respect thereto and to pay and deliver any income, proceeds or other funds
derived therefrom to the Company. The Purchase Contract Agent and the Holders
from time to time, acting through the Purchase Contract Agent, each hereby
further authorize and direct the Collateral Agent, as Agent of the Company, to
itself issue instructions and entitlement orders, and to otherwise take action,
with respect to the Collateral Account, the Collateral credited thereto and any
Security Entitlements with respect thereto, pursuant to the terms and provisions
hereof, all without the necessity of obtaining the further consent of the
Purchase Contract Agent or any of the Holders. The Collateral Agent shall be the
Agent of the Company and shall act as directed in writing by the Company.
Without limiting the generality of the foregoing, the Collateral Agent shall
issue entitlement orders to the Securities Intermediary when and as directed by
the Company.
(b) The Securities Intermediary hereby confirms and agrees that:
(i) all securities or other property underlying any financial assets credited to
the Collateral Account shall be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in blank or credited to
another Collateral Account maintained in the name of the Securities Intermediary
and in no case will any financial asset credited to the Collateral Account be
registered in the name of the Purchase Contract Agent, the Company or any
Holder, payable to the order of, or specially indorsed to, the Purchase Contract
Agent, the Collateral Agent, the Company or any Holder except to the extent the
foregoing have been specially indorsed to the Securities Intermediary or in
blank; (ii) all property delivered to the Securities Intermediary pursuant to
this Pledge Agreement (including, without limitation, any Debentures, the
Treasury Portfolio or Treasury Securities) will be promptly credited to the
Collateral Account; (iii) the Collateral Account is an account to which
financial assets are or may be credited, and the Securities Intermediary shall,
subject to the terms of this Agreement, treat the Purchase Contract Agent as
entitled to exercise the rights of any financial asset credited to the
Collateral Account; (iv) the Securities Intermediary has not entered into, and
until the termination of the 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
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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, the Purchase Contract Agent or the Holders of
the Securities purporting to limit or condition the obligation of the Securities
Intermediary to comply with entitlement orders as set forth in this Section 2.2.
(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, and each of them severally, 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.
ARTICLE III.
DISTRIBUTIONS ON PLEDGED COLLATERAL
So long as the Purchase Contract Agent is the registered owner of the
Pledged Debentures, it shall receive all payments thereon. If the Pledged
Debentures are reregistered, such that the Collateral Agent becomes the
registered holder, all payments of principal or interest on such Pledged
Debentures, together with any payments of principal or interest or cash
distributions in respect of any other Pledged Securities received by the
Collateral Agent that are properly payable hereunder shall be paid by the
Collateral Agent by wire transfer in same day funds:
(i) In the case of (A) payment of interest with respect to the
Pledged Debentures or cash distributions on the appropriate Pledged Applicable
Ownership Interest in the Treasury Portfolio (as specified in clause ___________
of the term "_________" in the Purchase Contract Agreement), as the case may be,
and (B) any payments of principal with respect to any Debentures or the
appropriate Applicable Ownership Interest (as specified in clause _______ of the
definition of such term) in the Treasury Portfolio, as the case may be, that
have been released from the Pledge pursuant to Section 4.3 hereof, to the
Purchase Contract Agent, for the benefit of the relevant Holders of Type A
Securities, to the account designated by the Purchase Contract Agent for such
purpose, no later than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
or after 12:30 p.m., New York City
8
time, on a Business Day, then such payment shall be made no later than
10:30 a.m., New York City time, on the next succeeding Business Day);
(ii) In the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to Section
4.3 hereof, to the Holders of the Type B Securities to the accounts designated
by them in writing for such purpose no later than 2:00 p.m., New York City time,
on the Business Day such payment is received by the Collateral Agent (provided
that in the event such payment is received by the Collateral Agent on a day that
is not a Business Day or after 12:30 p.m., New York City time, on a Business
Day, then such payment shall be made no later than 10:30 a.m., New York City
time, on the next succeeding Business Day); and
(iii) In the case of payments of the principal of any Pledged
Debentures or on the appropriate Pledged Applicable Ownership Interest (as
specified in clause ________ of the definition of such term) in the Treasury
Portfolio, as the case may be, or the principal of any Pledged Treasury
Securities, to the Company on the Purchase Contract Settlement Date in
accordance with the procedure set forth in Section 4.6(a) or 4.6(b) hereof, in
full satisfaction of the respective obligations of the Holders under the related
Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein shall be
applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of principal on account of any
Debenture or, if applicable, the appropriate Applicable Ownership Interest (as
specified in clause _________ of the definition of such term) in the Treasury
Portfolio that, at the time of such payment, is a Pledged Debenture or the
appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, or a Holder of Type B Securities shall receive any payments of
principal on account of any Treasury Securities that, at the time of such
payment, are Pledged Treasury Securities, the Purchase Contract Agent or such
Holder, as the case may be, shall transfer the Proceeds of such payment of
principal on such Pledged Debenture, appropriate Pledged Applicable Ownership
Interest in the Treasury Portfolio, or Pledged Treasury Securities, as the case
may be, to the Collateral Agent and the Collateral Agent shall hold such
Proceeds for the benefit of the Company as Collateral for the performance when
due by such Holder of its obligations under the related Purchase Contracts.
ARTICLE IV.
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF DEBENTURES
SECTION 4.1 SUBSTITUTION FOR DEBENTURES AND THE CREATION OF TYPE B SECURITIES
At any time on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date (unless a Tax Event Redemption has occurred),
a Holder of Type A Securities shall have the right to substitute Treasury
Securities for the Pledged Debentures securing such Holder's obligations under
the Purchase Contract(s) comprising a part of its Type A Securities in integral
multiples of [20] by (a) Transferring to the Collateral Agent Treasury
Securities having a Value equal to the aggregate principal amount of the Pledged
Debentures to be released and (b)(i) in the event that Contract Adjustment
Payments are at a
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higher rate for Type B Securities than for Type A Securities, delivering to the
Purchase Contract Agent Cash in an amount equal to the excess of the Contract
Adjustment Payments that would have accrued since the last Payment Date through
the date of substitution on the Type B Securities being created by the Holder,
over the Contract Adjustment Payments that have accrued over the same time
period on the related Type A Securities, which amount the Purchase Contract
Agent shall promptly remit to the Company, and (ii) delivering the related Type
A Securities to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of Exhibit B hereto, to the Purchase Contract Agent
stating that such Holder has Transferred Treasury Securities to the Collateral
Agent pursuant to clause (a) above (stating the Value of the Treasury Securities
Transferred by such Holder) and requesting that the Purchase Contract Agent
instruct the Collateral Agent to release from the Pledge the Pledged Debentures
related to such Type A Securities. The Purchase Contract Agent shall instruct
the Collateral Agent in the form provided in Exhibit A; provided, however, that
if a Tax Event Redemption has occurred and the Treasury Portfolio has become a
component of the Type A Securities, Holders of Type A Securities may make such
substitution only in integral multiples of [20] at any time on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date.
Upon receipt of the Treasury Securities from a Holder of and the related
instruction from the Purchase Contract Agent, the Collateral Agent shall release
the Pledged Debentures or the appropriate Pledged Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, and shall promptly Transfer such
Pledged Debentures or the appropriate Pledged Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, free and clear of any lien, pledge
or security interest created hereby, to the Purchase Contract Agent.
SECTION 4.2 SUBSTITUTION OF TREASURY SECURITIES AND THE CREATION OF
TYPE A SECURITIES
At any time on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date (unless a Tax Event Redemption has occurred),
a Holder of Type B Securities shall have the right to establish or reestablish
Type A Securities consisting of the Purchase Contracts and Debentures in
integral multiples of [20] Type A Securities by (a) Transferring to the
Collateral Agent Debentures having a Value equal to the Value of the Pledged
Treasury Securities to be released and (b) delivering the related Type B
Securities to the Purchase Contract Agent accompanied by a notice, substantially
in the form of Exhibit B hereto, stating that the Holder has transferred
Debentures 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 Type B Securities.
The Purchase Contract Agent shall instruct the Collateral Agent in the form
provided in Exhibit A; provided, however, that if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the Type A
Securities, Holders of Type B Securities may make such substitution only in
integral multiples of [20] Type B Securities, at any time on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date
by (a) Transferring to the Collateral Agent the appropriate Applicable Ownership
Interest in the Treasury Portfolio having a Value equal to the Value of the
Pledged Treasury Securities to be released and (b) delivering the related Type B
Securities to the Purchase Contract Agent accompanied by a notice, substantially
in the form of Exhibit B hereto, stating that the Holder has transferred the
Applicable Ownership Interest in the Treasury Portfolio to the Collateral Agent
pursuant to
10
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 Type B Securities. Upon receipt of the Debentures or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case
may be, from such Holder and the instruction from the Purchase Contract Agent,
the Collateral Agent shall release the Treasury Securities and shall promptly
Transfer such Treasury Securities, free and clear of any lien, pledge or
security interest created hereby, to the Purchase Contract Agent.
SECTION 4.3 TERMINATION EVENT
Upon receipt by the Collateral Agent of written notice from the Company or
the Purchase Contract Agent that there has occurred a Termination Event, the
Collateral Agent shall release all Collateral from the Pledge and shall promptly
Transfer any Pledged Debentures (or the appropriate Pledged Applicable Ownership
Interest in the Treasury Portfolio if a Tax Event Redemption has occurred) and
Pledged Treasury Securities to the Purchase Contract Agent for the benefit of
the Holders of the Type A Securities and the Type B Securities, respectively,
free and clear of any lien, pledge or security interest or other interest
created hereby.
If such Termination Event shall result from the Company's becoming a debtor
under the Bankruptcy Code, and if the Collateral Agent shall for any reason fail
promptly to effectuate the release and Transfer of all Pledged Debentures, the
appropriate Pledged Applicable Ownership in the Treasury Portfolio or the
Pledged Treasury Securities, as the case may be, as provided by this Section
4.3, any Holder may, and the Purchase Contract Agent shall, upon receipt from
the Holders of reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by the Purchase Contract Agent in compliance
with this paragraph, (i) use its reasonable 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) any such Holder or the Purchase Contract
Agent shall be unable to obtain such opinion within ten days after the
occurrence of such Termination Event or (z) the Collateral Agent shall continue,
after delivery of such opinion, to refuse to effectuate the release and Transfer
of all Pledged Debentures, the appropriate Pledged Applicable Ownership in the
Treasury Portfolio or the Pledged Treasury Securities, as the case may be, as
provided in this Section 4.3, then any Holder may, and the Purchase Contract
Agent shall within fifteen days after the occurrence of such Termination Event
commence an action or proceeding in the court with jurisdiction of the Company's
case under the Bankruptcy Code seeking an order requiring the Collateral Agent
to effectuate the release and transfer of all Pledged Debentures, the
appropriate Pledged Applicable Ownership in the Treasury Portfolio or of the
Pledged Treasury Securities, as the case may be, as provided by this Section 4.3
or (ii) commence an action or proceeding in the court with jurisdiction of the
Company's case under the Bankruptcy Code like that described in subsection
(i)(z) hereof within ten days after the occurrence of such Termination Event.
11
SECTION 4.4 CASH SETTLEMENT
(a) Upon receipt by the Collateral Agent of (i) a notice from the
Purchase Contract Agent promptly after the receipt by the Purchase Contract
Agent of such notice that a Holder of an Type A Securities or Type B Securities
has elected, in accordance with the procedures specified in Section 5.4(a)(i) or
(d)(i) of the Purchase Contract Agreement, respectively, to settle its Purchase
Contract with Cash and (ii) payment by such Holder of the amount required to
settle the Purchase Contract on or prior to 11:00 a.m., New York City time, on
the Business Day immediately preceding the Purchase Contract Settlement Date in
lawful money of the United States by certified or cashiers' check or wire
transfer in immediately available funds payable to or upon the order of the
Company, then the Collateral Agent shall promptly invest any Cash received from
a Holder in connection with a Cash Settlement in Permitted Investments. Upon
receipt of the proceeds upon the maturity of the Permitted Investments on the
Purchase Contract Settlement Date, the Collateral Agent shall pay the portion of
such proceeds and deliver any certified or cashiers' checks received, in an
aggregate amount equal to the Purchase Price, to the Company on the Purchase
Contract Settlement Date, and shall distribute any funds in respect of the
interest earned from the Permitted Investments to the Purchase Contract Agent
for payment to the relevant Holder.
(b) If a Holder of Type A Securities fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
Section 5.4(a)(i) of the Purchase Contract Agreement, such failure shall
constitute a default under the Purchase Contract Agreement and hereunder, and
the Holder shall be deemed to have consented to the disposition of the Pledged
Debentures pursuant to the remarketing as described in Section 5.4(b) of the
Purchase Contract Agreement, which is incorporated herein by reference. If a
Holder of Type A Securities does notify the Agent as provided in
Section 5.4(a)(i) of the Purchase Contract Agreement of its intention to make a
Cash Settlement, but fails to make such payment as required by
Section 5.4(a)(ii) of the Purchase Contract Agreement, such failure shall
constitute a default under the Purchase Contract and hereunder, and the pledged
Debentures of such a Holder will not be remarketed but instead the Collateral
Agent, for the benefit of the Company, will exercise its rights as a secured
party with respect to such Debentures at the direction of the Company to retain
or dispose of the Collateral in accordance with applicable law. In addition, in
the event of a Failed Remarketing as described in Section 5.4(b) of the Purchase
Contract Agreement, such Failed Remarketing shall constitute a default hereunder
by such Holder, and the Collateral Agent, for the benefit of the Company, will
also exercise its rights as a secured party with respect to such Debentures at
the direction of the Company to retain or dispose of the Collateral in
accordance with applicable law.
(c) If a Holder of a Type B Securities fails to notify the Purchase
Contract Agent of such Holder's intention to make a Cash Settlement in
accordance with Section 5.4(d)(i) of the Purchase Contract Agreement, or if a
Holder of a Type B Securities does notify the Agent as provided in
paragraph 5.4(d)(i) of the Purchase Contract Agreement of its intention to make
a Cash Settlement, but fails to make such payment as required by
paragraph 5.4(d)(ii) of the Purchase Contract Agreement, such failure shall
constitute a default under the Purchase Contract and hereunder by such Holder
and upon the maturity of any Pledged Treasury Securities or the Pledged
Applicable Ownership Interest in the Treasury Portfolio, if any, held by the
Collateral Agent on the Business Day immediately preceding the Purchase Contract
Settlement Date, the
12
principal amount of the Pledged Treasury Securities or the appropriate Pledged
Applicable Ownership Interest in the Treasury Portfolio received by the
Collateral Agent shall, upon written direction of the Company, be invested
promptly in Permitted Investments. On the Purchase Contract Settlement Date, an
amount equal to the Purchase Price will be remitted to the Company as payment
thereof. In the event the sum of the proceeds from the related Pledged Treasury
Securities or the appropriate Pledged Ownership Interest in the Treasury
Portfolio, as the case may be, and the investment earnings earned from such
investments is in excess of the aggregate Purchase Price of the Purchase
Contracts being settled thereby, the Collateral Agent will distribute such
excess to the Purchase Contract Agent for the benefit of the Holder of the
related Type B Securities or Type A Securities when received.
SECTION 4.5 EARLY SETTLEMENT
Upon written notice to the Collateral Agent by the Purchase Contract Agent
that a Holder of a Security has elected to effect Early Settlement of its entire
obligation under the Purchase Contract forming a part of such Security in
accordance with the terms of the Purchase Contract and the Purchase Contract
Agreement, and that the Purchase Contract Agent has received from such Holder,
and paid to the Company as confirmed in writing by the Company, the related
Early Settlement Amount pursuant to the terms of the Purchase Contract and the
Purchase Contract Agreement and that all conditions to such Early Settlement
have been satisfied, then the Collateral Agent shall release from the Pledge,
(a) the Pledged Debentures or the appropriate Pledged Applicable Ownership
Interest in the Treasury Portfolio in the case of a Holder of Type A Securities
or (b) Pledged Treasury Securities in the case of a Holder of Type B Securities,
in each case that had been components of such security, and shall transfer such
Pledged Debentures or the appropriate Pledged Applicable Ownership Interest in
the Treasury Portfolio or Pledged Treasury Securities, as the case may be, free
and clear of the Pledge created hereby, to the Purchase Contract Agent for the
benefit of such Holder.
SECTION 4.6 APPLICATION OF PROCEEDS SETTLEMENT
(a) In connection with the Purchase Contract Settlement Date, in the
event a Holder of Type A Securities (if a Tax Event Redemption has not occurred)
has not elected to make an effective Cash Settlement by notifying the Purchase
Contract Agent in the manner provided for in paragraph 5.4(a)(i) in the Purchase
Contract Agreement or has not made an Early Settlement of the Purchase
Contract(s) underlying its Type A Securities, such Holder shall be deemed to
have elected to pay for the shares of Common Stock to be issued under such
Purchase Contract(s) from the Proceeds of the related Pledged Debentures. The
Collateral Agent shall, by 10:00 a.m., New York City time, on the fourth
Business Day immediately preceding the Purchase Contract Settlement Date,
without any instruction from such Holder of Type A Securities, present the
related Pledged Debentures to the Remarketing Agent for remarketing. Upon
receiving such Pledged Debentures, the Remarketing Agent, pursuant to the terms
of the Remarketing Agreement, will use its reasonable efforts to remarket such
Pledged Debentures on such date at a price of approximately ___% (but not less
than ___%) of the aggregate Value of such Pledged Debentures, plus accrued and
unpaid interest, if any, thereon. After deducting as the Remarketing Fee an
amount not exceeding ___ basis points (.__%) of the aggregate Value of the
Pledged Debentures from any amount of such Proceeds in excess of the aggregate
Value, plus such accrued and unpaid interest of the remarketed Pledged
Debentures, the Remarketing
13
Agent will remit the entire amount of the Proceeds of such remarketing to the
Collateral Agent. On the Purchase Contract Settlement Date, the Collateral Agent
shall apply that portion of the Proceeds from such remarketing equal to the
aggregate Value, to satisfy in full the obligations of such Holders of Type A
Securities to pay the Purchase Price to purchase the Common Stock under the
related Purchase Contracts. The remaining portion of such Proceeds, if any,
shall be distributed by the Collateral Agent to the Purchase Contract Agent for
payment to the Holders. If the Remarketing Agent advises the Collateral Agent in
writing that it cannot remarket the related Pledged Debentures of such Holders
of Type A Securities at a price not less than ___% of the aggregate Value of
such Pledged Debentures plus any accrued and unpaid interest, thus resulting in
a Failed Remarketing, the Collateral Agent, for the benefit of the Company will,
at the written direction of the Company, retain or dispose of the Pledged
Debentures in accordance with applicable law and satisfy in full, from any such
disposition or retention, such Holder's obligation to pay the Purchase Price for
the Common Stock.
(b) In the event a Holder of Type B Securities or Type A Securities
(if a Tax Event Redemption has occurred) has not made an Early Settlement of the
Purchase Contract(s) underlying its Type B Securities or Type A Securities, such
Holder shall be deemed to have elected to pay for the shares of Common Stock to
be issued under such Purchase Contract(s) from the Proceeds of the related
Pledged Treasury Securities or the Pledged Applicable Ownership Interest in the
Treasury Portfolio, as the case may be. On the Business Day immediately prior to
the Purchase Contract Settlement Date, the Collateral Agent shall, at the
written direction of the Purchase Contract Agent, invest the Cash proceeds of
the maturing Pledged Treasury Securities or the Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, in overnight Permitted
Investments. Without receiving any instruction from any such Holder of Type B
Securities or Type A Securities, the Collateral Agent shall apply the Proceeds
of the related Pledged Treasury Securities or Pledged Applicable Ownership
Interest in the Treasury Portfolio to the settlement of such Purchase Contracts
on the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities or related appropriate Pledged Applicable Ownership Interest in the
Treasury Portfolio and the investment earnings from the investment in overnight
Permitted Investments is in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent shall distribute
such excess, when received, to the Purchase Contract Agent for the benefit of
the Holders.
Unless a Holder has made an Early Settlement, the Company shall not be
obligated to issue any shares of Common Stock in respect of the Purchase
Contract(s) or deliver any certificate therefor to the Holder unless it shall
have received payment in full of the Purchase Price for the shares of Common
Stock to be purchased thereunder.
(c) Pursuant to the Remarketing Agreement, on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, but no
earlier than the Payment Date immediately preceding the Purchase Contract
Settlement Date, holders of Separate Debentures may elect to have their Separate
Debentures remarketed by delivering their Separate Debentures, together with a
notice of such election, substantially in the form of Exhibit C hereto, to the
Custodial Agent. The Custodial Agent will hold such Separate Debentures in an
account
14
separate from the Collateral Account. A holder of Separate Debentures electing
to have its Separate Debentures remarketed will also have the right to withdraw
such election by written notice to the Custodial Agent, substantially in the
form of Exhibit D hereto, on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, upon which notice the Custodial
Agent will return such Separate Debentures to such holder. On the fourth
Business Day immediately preceding the Purchase Contract Settlement Date, the
Custodial Agent will deliver to the Remarketing Agent for remarketing all
Separate Debentures delivered to the Custodial Agent pursuant to this Section
4.6(c) and not withdrawn pursuant to the terms hereof prior to such date. The
portion of the proceeds from such remarketing equal to the aggregate Value of
such Separate Debentures will automatically be remitted by the Remarketing Agent
to the Custodial Agent for the benefit of the holders of such Separate
Debentures. In addition, after deducting as the Remarketing Fee an amount not
exceeding ___ basis points (.___%) of the Value of the remarketed Separate
Debentures, from any amount of such proceeds in excess of the aggregate Value of
the remarketed Separate Debentures plus any accrued and unpaid interest, the
Remarketing Agent will remit to the Custodial Agent the remaining portion of the
proceeds, if any, for the benefit of such holders. If, despite using its
reasonable efforts, the Remarketing Agent advises the Custodial Agent in writing
that it cannot remarket the related Separate Debentures of such holders at a
price not less than ___% of the aggregate Value of such Separate Debentures plus
accrued and unpaid interest and thus resulting in a Failed Remarketing, the
Remarketing Agent will promptly return such Separate Debentures to the Custodial
Agent for redelivery to such holders.
ARTICLE V.
VOTING RIGHTS -- DEBENTURES
The Purchase Contract Agent may exercise, or refrain from exercising, any
and all voting and other consensual rights pertaining to the Pledged Debentures
or any part thereof for any purpose not inconsistent with the terms of this
Agreement and in accordance with the terms of the Purchase Contract Agreement;
provided, that the Purchase Contract Agent shall not exercise or, as the case
may be, shall not refrain from exercising such right if, in the judgment of the
Company, such action would impair or otherwise have a material adverse effect on
the value of all or any of the Pledged Debentures; and provided, further, that
the Purchase Contract Agent shall give the Company and the Collateral Agent at
least five days' prior written notice of the manner in which it intends to
exercise, or its reasons for refraining from exercising, any such right. Upon
receipt of any notices and other communications in respect of any Pledged
Debentures, including notice of any meeting at which holders of Debentures are
entitled to vote or solicitation of consents, waivers or proxies of holders of
Debentures, the Collateral Agent shall use reasonable efforts to send promptly
to the Purchase Contract Agent such notice or communication, and as soon as
reasonably practicable after receipt of a written request therefor from the
Purchase Contract Agent, execute and deliver to the Purchase Contract Agent such
proxies and other instruments in respect of such Pledged Debentures (in form and
substance satisfactory to the Collateral Agent) as are prepared by the Purchase
Contract Agent with respect to the Pledged Debentures.
15
ARTICLE VI.
RIGHTS AND REMEDIES; DISTRIBUTION OF THE DEBENTURES;
TAX EVENT REDEMPTION
SECTION 6.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT
(a) In addition to the rights and remedies specified in Section 4.4
hereof or otherwise available at law or in equity, after a default hereunder,
the Collateral Agent shall have all of the rights and remedies with respect to
the Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
"Code") (whether or not the Code is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Wherever reference is made in this Agreement to any section of the
Code, such reference shall be deemed to include a reference to any provision of
the Code which is a successor to, or amendment of, such section. Without
limiting the generality of the foregoing, such remedies may include, to the
extent permitted by applicable law, (i) retention of the Pledged Debentures or
other Collateral in full satisfaction of the Holders' obligations under the
Purchase Contracts or (ii) sale of the Pledged Debentures or other Collateral in
one or more public or private sales and application of the proceeds in full
satisfaction of the Holders' obligations under the Purchase Contracts.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause ________ of the definition of such
term) of the Treasury Portfolio or on account of principal payments of any
Pledged Treasury Securities as provided in Article III hereof in satisfaction of
the obligations of the Holder of the Securities of which such Pledged Treasury
Securities, or the appropriate Pledged Applicable Ownership Interest (as
specified in clause ________ of the definition of such term) of the Treasury
Portfolio, as applicable, is a part under the related Purchase Contracts, the
inability to make such payments shall constitute a default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities, or such appropriate Pledged Applicable Ownership Interest
(as specified in clause _____ of the definition of such term) of the Treasury
Portfolio, as applicable, and such obligations of such Holder, any and all of
the rights and remedies available to a secured party under the Code and the
TRADES Regulations after default by a debtor, and as otherwise granted herein or
under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) principal of, or interest
on, the Pledged Debentures, (ii) the principal amount of the Pledged Treasury
Securities, or (iii) the appropriate Pledged Applicable Ownership Interest in
the Treasury Portfolio, 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 Securities, in the event such Holder becomes the Holder of
Type A Securities or Type B Securities, agrees that, from time to time, upon the
written request of the Collateral
16
Agent, the Purchase Contract Agent or such Holder shall execute and deliver such
further documents and do such other acts and things as the Collateral Agent may
reasonably request in order to maintain the Pledge, and the perfection and
priority thereof, and to confirm the rights of the Collateral Agent hereunder.
The Purchase Contract Agent shall have no liability to any Holder for executing
any documents or taking any such acts requested by the Collateral Agent
hereunder, except for liability for its own negligent act, its own negligent
failure to act or its own willful misconduct.
SECTION 6.2 TAX EVENT REDEMPTION
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Collateral Agent will, upon the written
instruction of the Company and the Purchase Contract Agent, deliver the
Applicable Principal Amount of Pledged Debentures to the Indenture Trustee for
payment of the Redemption Price. The Collateral Agent shall, or in the event the
Pledged Debentures are registered in the name of the Purchase Contract Agent,
the Purchase Contract Agent shall, direct the Indenture Trustee to pay the
Redemption Price therefor payable on the Tax Event Redemption Date on or prior
to 12:30 p.m., New York City time, such Redemption Price to be paid by check or
wire transfer in immediately available funds at such place and to such account
as may be designated by the Collateral Agent. In the event the Collateral Agent
receives such Redemption Price, the Collateral Agent will, at the written
direction of the Company, apply an amount equal to the Redemption Amount of such
Redemption Price to purchase from the Quotation Agent, the Treasury Portfolio
and promptly remit the remaining portion of such Redemption Price to the
Purchase Contract Agent for payment to the Holders of Type A Securities. The
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account
in the manner specified herein for Pledged Debentures to secure the obligation
of all Holders of Type A Securities to purchase Common Stock of the Company
under the Purchase Contracts constituting a part of such Type A Securities, in
substitution for the Pledged Debentures. Thereafter the Collateral Agent shall
have such security interests, rights and obligations with respect to the
Treasury Portfolio as it had in respect of the Pledged Debentures, as provided
in Articles II, III, IV, V and VI, and any reference herein to the Pledged
Debentures shall be deemed to be a reference to such Treasury Portfolio.
SECTION 6.3 SUBSTITUTIONS
Whenever a Holder has the right to substitute Treasury Securities,
Debentures or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, for Collateral held by the Collateral Agent, such
substitution shall not constitute a novation of the security interest created
hereby.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.1 REPRESENTATIONS AND WARRANTIES
The Holders from time to time, acting through the Purchase Contract Agent
as their attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any
17
representation or warranty made by or on behalf of a
Holder), hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each day a Holder
Transfers Collateral that:
(a) such Holder has the power to grant a security
interest in and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the
Collateral and, in the case of Collateral
delivered in physical form, is the sole holder of
such Collateral and is the sole beneficial owner
of, or has the right to Transfer, the Collateral
it Transfers to the Collateral Agent, free and
clear of any security interest, lien, encumbrance,
call, liability to pay money or other restriction
other than the security interest and lien granted
under Article II hereof;
(c) upon the Transfer of the Collateral to the
Collateral Account or physical delivery of the
Debentures to the Collateral Agent, the Collateral
Agent, for the benefit of the Company, will have a
valid and perfected first priority security
interest therein (assuming that any central
clearing operation or any Intermediary or other
entity not within the control of the Holder
involved in the Transfer of the Collateral,
including the Collateral Agent, gives the notices
and takes the action required of it hereunder and
under applicable law for perfection of that
interest and assuming the establishment and
exercise of control pursuant to Section 2.2
hereof); and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result
in the creation of any security interest, lien or
other encumbrance on the Collateral other than the
security interest and lien granted under Article
II hereof or violate any provision of any existing
law or regulation applicable to it or of any
mortgage, charge, pledge, indenture, contract or
undertaking to which it is a party or which is
binding on it or any of its assets.
SECTION 7.2 COVENANTS
The Holders from time to time, acting through the Purchase Contract Agent
as their attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any
18
covenant made by or on behalf of a Holder), hereby covenant to the Collateral
Agent that for so long as the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such
Holders will create or purport to create or allow
to subsist any mortgage, charge, lien, pledge or
any other security interest whatsoever over the
Collateral or any part of it other than pursuant
to this Agreement; and
(b) neither the Purchase Contract Agent nor such
Holders will sell or otherwise dispose (or attempt
to dispose) of the Collateral or any part of it
except for the beneficial interest therein,
subject to the pledge hereunder, transferred in
connection with the Transfer of the Securities.
ARTICLE VIII.
THE COLLATERAL AGENT
It is hereby agreed as follows:
SECTION 8.1 APPOINTMENT, POWERS AND IMMUNITIES
The Collateral Agent shall act as agent for the Company hereunder with such
powers as are specifically vested in the Collateral Agent by the terms of this
Agreement, together with such other powers as are reasonably incidental thereto.
Each of the Collateral Agent, the Custodial Agent and the Securities
Intermediary: (a) shall have no duties or responsibilities except those
expressly set forth or incorporated 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 or incorporated terms hereof; (b) shall not be
responsible for any recitals contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by it under, this
Agreement, the Securities or the Purchase Contract Agreement (except as
specifically incorporated by reference herein), or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
(other than as against the Collateral Agent, the Custodial Agent or the Security
Interest Intermediary), the Securities or the Purchase Contract Agreement or any
other document referred to or provided for herein (except as specifically
incorporated by reference herein) or therein or for any failure by the Company
or any other Person (except the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be) to perform any of its obligations
hereunder or thereunder or for the perfection, priority or, except as expressly
required hereby, maintenance of any security interest created hereunder;
(c) shall not be required to initiate or conduct any litigation or collection
proceedings hereunder (except in the case of the Collateral Agent, pursuant to
directions furnished under Section 8.2 hereof, subject to Section 8.6 hereof);
(d) shall not be responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred
19
to or provided for herein or in connection herewith or therewith, except for its
own negligence or willful misconduct; and (e) shall not be required to advise
any party as to selling or retaining, or taking or refraining from taking any
action with respect to, the Securities or other property deposited hereunder in
accordance with the terms hereof. Subject to the foregoing, during the term of
this Agreement, the Collateral Agent shall take all reasonable action in
connection with the safekeeping and preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the Value of
the Collateral. Notwithstanding the foregoing, the Collateral Agent, the
Custodial Agent and Securities Intermediary, each in its individual capacity,
hereby waive any right of setoff, bankers lien, liens or perfection rights as
Securities Intermediary or any counterclaim with respect to any of the
Collateral.
SECTION 8.2 INSTRUCTIONS OF THE COMPANY
The Company shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, to direct the time, method and
place of conducting any proceeding for the realization of any right or remedy
available to the Collateral Agent, or of exercising any power conferred on the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, or to direct the taking or refraining from taking of any action
authorized by this Agreement; provided, however, that (i) such direction shall
not conflict with the provisions of any law or of this Agreement and (ii) the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall be
adequately indemnified as provided herein. Nothing in this Section 8.2 shall
impair the right of the Collateral Agent in its discretion to take any action or
omit to take any action which it deems proper and which is not inconsistent with
such direction.
SECTION 8.3 RELIANCE
Each of the Securities Intermediary, the Custodial Agent and the Collateral
Agent shall be entitled conclusively to rely upon any certification, order,
judgment, opinion, notice or other communication (including, without limitation,
any thereof by telephone, telecopy, telex or facsimile) believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons (without being required to determine the correctness of
any fact stated therein), and upon advice and statements of legal counsel and
other experts selected by the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be. As to any matters not expressly
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.
20
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 and any Holder of Securities (and any of their respective
subsidiaries or affiliates) as if it were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary and their
affiliates may accept fees and other consideration from the Purchase Contract
Agent and any Holder of Securities without having to account for the same to the
Company; provided that each of the Securities Intermediary, the Custodial Agent
and the Collateral Agent covenants and agrees with the Company that it shall not
accept, receive or permit there to be created in favor of itself and shall take
no affirmative action to permit there to be created in favor of any other
Person, any security interest, lien or other encumbrance of any kind in or upon
the Collateral.
SECTION 8.5 NON-RELIANCE
None of the Securities Intermediary, the Custodial Agent or the Collateral
Agent shall be required to keep itself informed as to the performance or
observance by the Purchase Contract Agent or any Holder of Securities of this
Agreement, the Purchase Contract Agreement, the Securities or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Purchase Contract Agent or any Holder of Securities. The Collateral
Agent, the Custodial Agent and the Securities Intermediary shall not have any
duty or responsibility to provide the Company with any credit or other
information concerning the affairs, financial condition or business of the
Purchase Contract Agent or any Holder of Securities (or any of their respective
affiliates) that may come into the possession of the Collateral Agent, the
Custodial Agent or the Securities Intermediary or any of their respective
affiliates.
SECTION 8.6 COMPENSATION AND INDEMNITY
The Company agrees: (i) to pay each of the Collateral Agent and the
Custodial Agent from time to time such compensation as shall be agreed in
writing between the Company and the Collateral Agent or the Custodial Agent, as
the case may be, for all services rendered by each of them hereunder and (ii) to
indemnify the Collateral Agent, the Custodial Agent and the Securities
Intermediary for, and to hold each of them harmless from and against, any loss,
liability or reasonable out-of-pocket expense incurred without negligence,
willful misconduct or bad faith on its part, arising out of or in connection
with the acceptance or administration of its powers and duties under this
Agreement, including the reasonable out-of-pocket costs and expenses (including
reasonable fees and expenses of counsel) of defending itself against any claim
or liability in connection with the exercise or performance of such powers and
duties. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall each promptly notify the Company of any third party claim
which may give rise to indemnity hereunder and give the Company the opportunity
to participate in the defense of such claim with counsel reasonably satisfactory
to the indemnified party, and no such claim shall be settled without the written
consent of the Company, which consent shall not be unreasonably withheld.
21
SECTION 8.7 FAILURE TO ACT
In the event of any ambiguity in the provisions of this Agreement or any
dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent and the Custodial Agent shall be entitled, after prompt notice
to the Company and the Purchase Contract Agent, at its sole option, to refuse to
comply with any and all claims, demands or instructions with respect to such
property or funds so long as such dispute or conflict shall continue, and
neither the Collateral Agent nor the Custodial Agent shall be or become liable
in any way to any of the parties hereto for its failure or refusal to comply
with such conflicting claims, demands or instructions. The Collateral Agent and
the Custodial Agent shall be entitled to refuse to act until either (i) such
conflicting or adverse claims or demands shall have been finally determined by a
court of competent jurisdiction or settled by agreement between the conflicting
parties as evidenced in a writing, satisfactory to the Collateral Agent or the
Custodial Agent, as the case may be, or (ii) the Collateral Agent or the
Custodial Agent, as the case may be, shall have received security or an
indemnity satisfactory to the Collateral Agent or the Custodial Agent, as the
case may be, sufficient to save the Collateral Agent or the Custodial Agent, as
the case may be, harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which the Collateral Agent or the Custodial
Agent, as the case may be, may without negligence, willful misconduct, or bad
faith on its part incur by reason of its acting. The Collateral Agent or the
Custodial Agent may in addition elect to commence an interpleader action or seek
other judicial relief or orders as the Collateral Agent or the Custodial Agent,
as the case may be, may deem necessary. Notwithstanding anything contained
herein to the contrary, neither the Collateral Agent nor the Custodial Agent
shall be required to take any action that is in its opinion contrary to law or
to the terms of this Agreement, or which would in its opinion subject it or any
of its officers, employees or directors to liability.
SECTION 8.8 RESIGNATION OF COLLATERAL AGENT
Subject to the appointment and acceptance of a successor Collateral Agent
or Custodial Agent as provided below, (a) the Collateral Agent and the Custodial
Agent may resign at any time by giving notice thereof to the Company and the
Purchase Contract Agent as attorney-in-fact for the Holders of Securities, (b)
the Collateral Agent and the Custodial Agent may be removed at any time by the
Company and (c) if the Collateral Agent or the Custodial Agent fails to perform
any of its material obligations hereunder in any material respect for a period
of not less than 20 days after receiving written notice of such failure by the
Purchase Contract Agent and such failure shall be continuing, the Collateral
Agent or the Custodial Agent may be removed by the Purchase Contract Agent. The
Purchase Contract Agent shall promptly notify the Company of any removal of the
Collateral Agent pursuant to clause (c) of the immediately preceding sentence.
Upon any such resignation or removal, the Company shall have the right to
appoint a successor Collateral Agent or Custodial Agent, as the case may be. If
no successor Collateral Agent or Custodial Agent, as the case may be, shall have
been so appointed and shall have accepted such appointment within 30 days after
the retiring Collateral Agent's or Custodial Agent's giving of notice of
resignation or such removal, then the retiring Collateral Agent or Custodial
Agent, as the case may be, may petition any court of competent jurisdiction for
the appointment of a successor Collateral Agent or Custodial Agent, as the case
may be. Each of the Collateral Agent and the Custodial Agent shall be a bank
which has an office in New York, New York with a combined capital and surplus of
at least $75,000,000. Upon the acceptance of any appointment as Collateral Agent
or Custodial Agent, as the case may
22
be, hereunder by a successor Collateral Agent or Custodial Agent, as the case
may be, such successor shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent or
Custodial Agent, as the case may be, and the retiring Collateral Agent or
Custodial Agent, as the case may be, shall take all appropriate action to
transfer any money and property held by it hereunder (including the Collateral)
to such successor. The retiring Collateral Agent or Custodial Agent shall, upon
such succession, be discharged from its duties and obligations as Collateral
Agent or Custodial Agent hereunder. After any retiring Collateral Agent's or
Custodial Agent's resignation hereunder as Collateral Agent or Custodial Agent,
the provisions of this Article VIII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Collateral Agent or Custodial Agent. Any resignation or removal of the
Collateral Agent hereunder shall be deemed for all purposes of this Agreement as
the simultaneous resignation or removal of the Custodial Agent and the
Securities Intermediary.
SECTION 8.9 RIGHT TO APPOINT AGENT OR ADVISOR
The Collateral Agent shall have the right to appoint agents or advisors in
connection with any of its duties hereunder, and the Collateral Agent shall not
be liable for any action taken or omitted by, or in reliance upon the advice of,
such agents or advisors selected in good faith. The appointment of agents
pursuant to this Section 8.9 shall be subject to prior consent of the Company,
which consent shall not be unreasonably withheld.
SECTION 8.10 SURVIVAL
The provisions of this Article VIII shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent or the
Custodial Agent.
SECTION 8.11 EXCULPATION
Anything in this Agreement to the contrary notwithstanding, in no event
shall any of the Collateral Agent, the Custodial Agent or the Securities
Intermediary or their officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Collateral Agent, the
Custodial Agent or the Securities Intermediary, or any of them, incurred without
any act or deed that is found to be attributable to negligence or willful
misconduct on the part of the Collateral Agent, the Custodial Agent or the
Securities Intermediary.
ARTICLE IX.
AMENDMENT
SECTION 9.1 AMENDMENT WITHOUT CONSENT OF HOLDERS
Without the consent of any Holders or the holders of any Separate
Debentures, the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, at any time and from
time to time, may amend this Agreement, in form
23
satisfactory to the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, for any of the
following purposes:
(a) to evidence the succession of another Person to
the Company, and the assumption by any such
successor of the covenants of the Company; or
(b) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right
or power herein conferred upon the Company so long
as such covenants or such surrender do not
adversely affect the validity, perfection or
priority of the security interests granted or
created hereunder; or
(c) to evidence and provide for the acceptance of
appointment hereunder by a successor Collateral
Agent, Custodial Agent, Securities Intermediary or
Purchase Contract Agent; or
(d) to cure any ambiguity, to correct or supplement
any provisions herein which may be inconsistent
with any other such provisions herein, or to make
any other provisions with respect to such matters
or questions arising under this Agreement,
provided such action shall not adversely affect
the interests of the Holders.
SECTION 9.2 AMENDMENT WITH CONSENT OF HOLDERS
With the consent of the Holders of not less than a majority of the Purchase
Contracts at the time outstanding, by Act of said Holders delivered to the
Company, the Purchase Contract Agent or the Collateral Agent, as the case may
be, the Company, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided, however, that no
such supplemental agreement shall, without the consent of the Holder of each
Outstanding Security adversely affected thereby,
(a) change the amount or type of Collateral underlying
a Security (except for the rights of holders of
Type A Securities to substitute the Treasury
Securities for the Pledged Debentures or the
appropriate Pledged Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, or
the rights of Holders of Type B Securities to
substitute Debentures or the appropriate
Applicable
24
Ownership Interest in the Treasury Portfolio, as
applicable, for the Pledged Treasury Securities),
impair the right of the Holder of any Security to
receive distributions on the underlying Collateral
or otherwise adversely affect the Holder's rights
in or to such Collateral; or
(b) otherwise effect any action that would require the
consent of the Holder of each Outstanding Security
affected thereby pursuant to the Purchase Contract
Agreement if such action were effected by an
agreement supplemental thereto; or
(c) reduce the percentage of Purchase Contracts the
consent of whose Holders is required for any such
amendment.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
SECTION 9.3 EXECUTION OF AMENDMENTS
In executing any amendment permitted by this Section, the Collateral Agent,
the Custodial Agent, the Securities Intermediary and the Purchase Contract Agent
shall be entitled to receive and (subject to Section 6.1 hereof, with respect to
the Collateral Agent, and Section 7.1 of the Purchase Contract Agreement, with
respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent, if
any, to the execution and delivery of such amendment have been satisfied.
SECTION 9.4 EFFECT OF AMENDMENTS
Upon the execution of any amendment under this Article IX, this Agreement
shall be modified in accordance therewith, and such amendment shall form a part
of this Agreement for all purposes; and every Holder of Certificates theretofore
or thereafter authenticated, executed on behalf of the Holders and delivered
under the Purchase Contract Agreement shall be bound thereby.
SECTION 9.5 REFERENCE TO AMENDMENTS
Security Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any amendment pursuant to this Section may, and
shall if required by the Collateral Agent or the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent and the Collateral
Agent as to any matter provided for in such amendment. If the Company shall so
determine, new Security Certificates so modified as to conform, in the opinion
of the Collateral Agent, the Purchase Contract Agent and the Company, to any
such amendment may be prepared and executed by the Company and authenticated,
25
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement in exchange for Outstanding
Security Certificates.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1 NO WAIVER
No failure on the part of the Collateral Agent 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 the Collateral Agent 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 CONFLICT OF LAWS PRINCIPLES
THEREUNDER, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY OTHER JURISDICTION SHALL
BE MANDATORILY APPLICABLE. Without limiting the foregoing, the above choice of
law is expressly agreed to by the Company, the Securities Intermediary, the
Custodial Agent, the Collateral Agent and the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account. The Company,
the Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, hereby submit to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
SECTION 10.3 NOTICES
All notices, requests, consents and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing (including,
without limitation, by telecopy) delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof (or
in the case of Holders, may be made and deemed given as provided in Sections 1.5
and 1.6 of the Purchase Contract Agreement) or, as to any party, at such other
address as shall be designated by such party in a notice to the other parties.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier or
26
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid (except as aforesaid).
SECTION 10.4 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
and the Holders from time to time of the Securities, by their acceptance of the
same, shall be deemed to have agreed to be bound by the provisions hereof and to
have ratified the agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.
SECTION 10.5 COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument, and any of the
parties hereto may execute this Agreement by signing any such counterpart.
SECTION 10.6 SEVERABILITY
If any provision hereof is invalid and unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7 EXPENSES, ETC.
The Company agrees to reimburse the Collateral Agent and the Custodial
Agent for: (a) all reasonable out-of-pocket costs and expenses of the Collateral
Agent and the Custodial Agent (including, without limitation, the reasonable
fees and expenses of the necessary services of a Securities Intermediary and of
counsel to the Collateral Agent and the Custodial Agent), in connection with
(i) the negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other 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.
27
SECTION 10.8 SECURITY INTEREST ABSOLUTE
All rights of the Collateral Agent and security interests hereunder, and
all obligations of the Holders from time to time hereunder, shall be absolute
and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the
obligations of Holders of Securities under the related Purchase Contracts,
or any other amendment or waiver of any term of, or any consent to any
departure from any requirement of, the Purchase Contract Agreement or any
Purchase Contract or any other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
28
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed as of the day and year first above written.
FPL GROUP, INC.
By:
------------------------------------
Name:
Title:
Address for Notices:
FPL Group, Inc.
000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention:
---------------------------
Telecopy:
--------------------------------------,
as Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By:
------------------------------------
Name:
Title:
Address for Notices:
--------------------------------------,
as Collateral Agent, Custodial
Agent and as Securities Intermediary
By:
------------------------------------
Name:
Title:
Address for Notices:
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
----------------------
----------------------
----------------------
Re: Securities of FPL Group, Inc. (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the Pledge
Agreement, dated as of __________, ______, (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 [Type A Securities] [Type B Securities] from time to time,
that the Holder of Securities listed below (the "Holder") has elected to
substitute [$_____ principal amount of Treasury Securities] [$_______ principal
amount of Debentures or Stated Amount of the appropriate Applicable Ownership
Interest in the Treasury Portfolio] in exchange for an equal Value of [Pledged
Debentures or the appropriate Pledged Applicable Ownership Interest in the
Treasury Portfolio] [Pledged Treasury Securities] held by you in accordance with
the Pledge Agreement and has delivered to us a notice stating that the Holder
has Transferred [Treasury Securities] [Debentures or the appropriate Applicable
Ownership Interest in the Treasury Portfolio] to you, as Collateral Agent. We
hereby instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged
Debentures or the appropriate Pledged Applicable Ownership Interest in the
Treasury Portfolio], to release the [Debentures or the appropriate Applicable
Ownership Interest in the Treasury Portfolio] [Treasury Securities] related to
such [Type A Securities] [Type B Securities] to us in accordance with the
Holder's instructions. Capitalized terms used herein but not defined shall have
the meaning set forth or incorporated by reference in the Pledge Agreement.
Date:
-------------------------------- ---------------------------------------
By:
------------------------------------
Name:
Title:
Signature Guarantee:
----------------
A-1
Please print name and address of registered Holder electing to substitute
[Treasury Securities] [Debentures or the appropriate Applicable Ownership
Interest in the Treasury Portfolio] for [Pledged Debentures or appropriate
Pledged Applicable Ownership Interest in the Treasury Portfolio] [Pledged
Treasury Securities]:
------------------------------ ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
--------------------------------
--------------------------------
--------------------------------
A-2
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
----------------------
----------------------
----------------------
Re: Securities of FPL Group, Inc. (the "Company")
The undersigned Holder hereby notifies you that it has delivered to
_________________________, as Collateral Agent, [$_______ principal amount at
maturity of Treasury Securities] [$_______ principal amount of Debentures or
Stated Amount of the appropriate Applicable Ownership Interest in the Treasury
Portfolio] in exchange for an equal Value of [Pledged Debentures or the
appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio]
[Pledged Treasury Securities] held by the Collateral Agent, in accordance with
Section [4.1][4.2] of the Pledge Agreement, dated ________, _____ (the "Pledge
Agreement"), among you, the Company and the Collateral Agent. The undersigned
Holder hereby instructs you to instruct the Collateral Agent to release to you
on behalf of the undersigned Holder the [Pledged Debentures or the appropriate
Pledged Applicable Ownership Interest in the Treasury Portfolio] [Pledged
Treasury Securities] related to such [Type A Securities] [Type B Securities].
Capitalized terms used herein but not defined shall have the meaning set forth
or incorporated by reference in the Pledge Agreement.
Dated:________________________ ____________________________________
Signature
Signature Guarantee:________________
B-1
Please print name and address of Registered Holder:
------------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
-------------------------------
-------------------------------
-------------------------------
B-2
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
----------------------
----------------------
----------------------
Re: Securities of FPL Group Capital Inc (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c) of
the Pledge Agreement, dated as of ________, _____ (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and ______________, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Type A Securities and Type B Securities from
time to time, that the undersigned elects to deliver $________ principal amount
of Debentures for delivery to the Remarketing Agent on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date for remarketing
pursuant to Section 4.6(c) of the Pledge Agreement. The undersigned will, upon
request of the Remarketing Agent, execute and deliver any additional documents
deemed by the Remarketing Agent or by the Company to be necessary or desirable
to complete the sale, assignment and transfer of the Debentures tendered hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of such
remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under
"A. Payment Instructions". The undersigned hereby instructs you, in the event of
Failed Remarketing, upon receipt of the Debentures tendered herewith from the
Remarketing Agent, to deliver such Debentures to the person(s) and the
address(es) indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and warrants that
the undersigned has full power and authority to tender, sell, assign and
transfer the Debentures tendered hereby and that the undersigned is the record
owner of any Debentures tendered herewith in physical form or a participant in
The Depositary Trust Company ("DTC") and the beneficial owner of any Debentures
tendered herewith by book-entry transfer to your account at DTC and (ii) agrees
to be bound by the terms and conditions of Section 4.6(c) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth or incorporated by reference in the Pledge Agreement.
Date:
--------------------------- ---------------------------------------
By:
------------------------------------
Name:
Title:
Signature Guarantee:
----------------
C-1
Please print name and address:
---------------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
---------------------------------
---------------------------------
---------------------------------
C-2
A. PAYMENT INSTRUCTIONS B. DELIVERY INSTRUCTIONS
Proceeds of the remarketing should be In the event of a Failed Remarketing,
paid by check in the name of the Debentures which are in physical form
person(s) set forth below and mailed should be delivered tothe person(s) set
to the address set forth below. forth below and mailed to the address
set forth below.
Name(s)
------------------------------------ Name(s)
(Please Print)
---------------------------------------
(Please Print)
Address
------------------------------------ Address
---------------------------------------
------------------------------------
(Please Print) ---------------------------------------
(Please Print)
------------------------------------
(Zip Code) ---------------------------------------
(Zip Code)
------------------------------------
(Tax Identification or Social ---------------------------------------
Security Number) (Tax Identification or Social
Security Number)
In the event of a Failed Remarketing,
Debentures which are in book-entry form
should be credited to the account at
The Depositary Trust Company set forth
below.
------------------------------
DTC Account Number
Name of Account
Party:
-------------------------------
C-3
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
----------------------
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Re: Securities of FPL Group Capital Inc (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c) of
the Pledge Agreement, dated as of _________, _____ (the "Pledge Agreement")
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and __________, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Type A Securities and Type B Securities from
time to time, that the undersigned elects to withdraw the $_____ principal
amount of Debentures delivered to the Custodial Agent on ____________ for
remarketing pursuant to Section 4.6(c) of the Pledge Agreement. The undersigned
hereby instructs you to return such Debentures to the undersigned in accordance
with the undersigned's instructions. With this notice, the Undersigned hereby
agrees to be bound by the terms and conditions of Section 4.6(c) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth or incorporated in the Pledge Agreement.
Date:
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By:
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Name:
Title:
Signature Guarantee:
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D-1
Please print name and address:
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Name Social Security or other Taxpayer
Identification Number, if any
Address
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D-2
