EXECUTION COPY
XL CAPITAL LTD,
U.S. BANK TRUST NATIONAL ASSOCIATION, as
Collateral Agent, Custodial Agent and Securities Intermediary
AND
U.S. BANK NATIONAL ASSOCIATION,
as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of March 23, 2004
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.............................................................................................2
SECTION 1.1 Definitions................................................................................2
ARTICLE II PLEDGE; CONTROL AND PERFECTION.........................................................................4
SECTION 2.1 The Pledge.................................................................................4
SECTION 2.2 Delivery, Control and Perfection...........................................................6
ARTICLE III PAYMENTS ON COLLATERAL................................................................................8
SECTION 3.1 Payments...................................................................................8
SECTION 3.2 Application of Payments....................................................................9
ARTICLE IV SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES................................................9
SECTION 4.1 Collateral Substitution and the Creation of Stripped Units.................................9
SECTION 4.2 Collateral Substitution and the Re-Creation of Normal Units...............................10
SECTION 4.3 Termination Event.........................................................................10
SECTION 4.4 Early Settlement; Merger Early Settlement; Cash Settlement................................11
SECTION 4.5 Remarketing; Application of Proceeds; Settlement..........................................11
ARTICLE V VOTING RIGHTS -- NOTES.................................................................................13
SECTION 5.1 Exercise by Purchase Contract Agent.......................................................13
ARTICLE VI RIGHTS AND REMEDIES; SPECIAL EVENT REDEMPTION.........................................................14
SECTION 6.1 Rights and Remedies of the Collateral Agent...............................................14
SECTION 6.2 Substitutions.............................................................................15
SECTION 6.3 Special Event Redemption..................................................................15
SECTION 6.4 Cash Received from Holders of Normal Units not Participating in the Remarketing...........15
ARTICLE VII REPRESENTATIONS AND WARRANTIES; COVENANTS............................................................16
SECTION 7.1 Representations and Warranties of the Holders.............................................16
SECTION 7.2 Representations and Warranties of the Collateral Agent, Custodial Agent and
Securities Intermediary.................................................................17
SECTION 7.3 Covenants.................................................................................17
ARTICLE VIII THE COLLATERAL AGENT................................................................................18
SECTION 8.1 Appointment, Powers and Immunities........................................................18
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SECTION 8.2 Instructions of the Company...............................................................19
SECTION 8.3 Reliance..................................................................................20
SECTION 8.4 Rights in Other Capacities................................................................20
SECTION 8.5 Non-Reliance on Collateral Agent..........................................................20
SECTION 8.6 Compensation and Indemnity................................................................21
SECTION 8.7 Failure to Act............................................................................21
SECTION 8.8 Resignation; Replacement of Collateral Agent, Custodial Agent or Securities
Intermediary............................................................................22
SECTION 8.9 Right to Appoint Agent or Advisor.........................................................23
SECTION 8.10 Survival.................................................................................23
SECTION 8.11 Exculpation..............................................................................23
ARTICLE IX AMENDMENT.............................................................................................24
SECTION 9.1 Amendment Without Consent of Holders......................................................24
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..........................................................................................25
SECTION 10.1 No Waiver................................................................................25
SECTION 10.2 GOVERNING LAW............................................................................26
SECTION 10.3 Judgment Currency........................................................................26
SECTION 10.4 Notices..................................................................................27
SECTION 10.5 Successors and Assigns...................................................................27
SECTION 10.6 Counterparts.............................................................................27
SECTION 10.7 Severability.............................................................................27
SECTION 10.8 Expenses, Etc............................................................................28
SECTION 10.9 Security Interest Absolute...............................................................28
SECTION 10.10 Waiver of Jury Trial.....................................................................28
SECTION 10.11 Incorporation by Reference...............................................................28
EXHIBIT A Instruction from Purchase Contract Agent to Collateral Agent
EXHIBIT B Instruction to Purchase Contract Agent
EXHIBIT C Instruction to Custodial Agent Regarding Remarketing
EXHIBIT D Instruction to Custodial Agent Regarding Withdrawal from Remarketing
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of March 23, 2004 (this
"Agreement"), among XL Capital Ltd, a Cayman Islands exempted limited company
(the "Company"), U.S. Bank Trust National Association, a national banking
association, not individually but solely as collateral agent (in such capacity,
together with its successors in such capacity, the "Collateral Agent"), as
custodial agent (in such capacity, together with its successors in such
capacity, the "Custodial Agent") and as "securities intermediary" as defined in
Section 8-102(a)(14) of the Code (as defined herein) (in such capacity, together
with its successors in such capacity, the "Securities Intermediary"), and U.S.
Bank National Association, a national banking association, not individually but
solely as purchase contract agent and as attorney-in-fact of the Holders from
time to time of the Units (in such capacity, together with its successors in
such capacity, the "Purchase Contract Agent") under the Purchase Contract
Agreement (as defined herein).
RECITALS
WHEREAS, the Company and the Purchase Contract Agent are
parties to the Purchase Contract Agreement, dated as of the date hereof (as
modified, amended or supplemented and in effect from time to time, the "Purchase
Contract Agreement"), pursuant to which there may be issued Units having a
Stated Amount of $25 per Unit, all of which will initially be Normal Units.
WHEREAS, each Normal Unit will be comprised of (a) a Purchase
Contract and (b) either beneficial ownership of (i) a 1/40, or 2.5%, beneficial
ownership interest in a Note having a $1,000 principal amount or (ii) following
a Special Event Redemption in accordance with the Purchase Contract Agreement
and the terms of the Notes, beneficial ownership of the Treasury Consideration.
WHEREAS, in accordance with the terms of the Purchase Contract
Agreement, a Holder of Normal Units may separate the Notes or the Treasury
Consideration, as applicable, from the related Purchase Contracts by
substituting for such Notes or the Treasury Consideration, as the case may be,
Treasury Securities that will pay in the aggregate an amount equal to the
aggregate Stated Amount of such Normal Units. Upon such separation, the Normal
Units will become Stripped Units. Each Stripped Unit will be comprised of (a) a
Purchase Contract and (b) a 1/40 undivided beneficial interest in a Treasury
Security, or, in the case of an opt-out pursuant to Section 6.4, the Cash
Consideration.
WHEREAS, pursuant to the terms of the Purchase Contract
Agreement and the Purchase Contracts, the Holders, from time to time, of the
Units have irrevocably authorized the Purchase Contract Agent, as
attorney-in-fact of such Holders, among other things, to execute and deliver
this Agreement on behalf of such Holders and to grant the pledge provided hereby
of the Notes, any Treasury Consideration and any Treasury Securities delivered
in exchange therefor to secure each Holder's obligations under the related
Purchase Contract, as provided herein and subject to the terms hereof.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the
Company, the Collateral Agent, the Securities Intermediary, the Custodial Agent
and the Purchase Contract Agent, on its own behalf and as attorney-in-fact of
the Holders from time to time of the Units, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) capitalized terms used but not defined herein are used as
defined in the Purchase Contract Agreement;
(b) the defined terms in this Agreement have the meanings
assigned to them in this Article and include the plural as well as the singular;
and
(c) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
"AGREEMENT" means this agreement as originally executed or as
it may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"CASH CONSIDERATION" has the meaning specified in the Purchase
Contract Agreement.
"CODE" has the meaning specified in Section 6.1 hereof.
"COLLATERAL" has the meaning specified in Section 2.1(a)
hereof.
"COLLATERAL ACCOUNT" means the securities account (number
785068000) maintained at U.S. Bank Trust National Association, 000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, in the name of "U.S. Bank
National Association, as Purchase Contract Agent on behalf of the holders of
certain securities of XL Capital Ltd, Collateral Account subject to the security
interest of U.S. Bank Trust National Association, as Collateral Agent, for the
benefit of XL Capital Ltd, as pledgee" and any successor account.
"COLLATERAL AGENT" has the meaning specified in the first
paragraph of this Agreement.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such pursuant to
the applicable provisions of the Purchase Contract Agreement, and thereafter
"Company" shall mean such successor.
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"CUSTODIAL AGENT" has the meaning specified in the first
paragraph of this Agreement.
"INDENTURE" means the Indenture dated as of January 23, 2003
between the Company and U.S. Bank National Association, as trustee, as
supplemented by the First Supplemental Indenture, dated as of March 23, 2004.
"INTERMEDIARY" means any entity that in the ordinary course of
its business maintains securities accounts for others and is acting in that
capacity.
"PLEDGE" has the meaning specified in Section 2.1(c) hereof.
"PLEDGED NOTES" has the meaning specified in Section 2.1(c)
hereof.
"PLEDGED TREASURY CONSIDERATION" has the meaning specified in
Section 2.1(c) hereof.
"PLEDGED TREASURY SECURITIES" has the meaning specified in
Section 2.1(c) hereof.
"PROCEEDS" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, collection or disposition of the Collateral or any
proceeds thereof.
"PURCHASE CONTRACT AGENT" has the meaning specified in the
first paragraph of this Agreement.
"PURCHASE CONTRACT AGREEMENT" has the meaning specified in the
Recitals.
"SECURITIES INTERMEDIARY" has the meaning specified in the
first paragraph of this Agreement.
"SECURITY ENTITLEMENT" has the meaning set forth in Section
8-102(a)(17) of the Code.
"SEPARATE NOTES" means any Notes that are not Pledged Notes.
"TRADES REGULATIONS" means the regulations of the United
States Department of the Treasury, published at 31 C.F.R. Part 357, as amended
from time to time. Unless otherwise defined herein, all terms defined in the
TRADES Regulations are used herein as therein defined.
"TRANSFER" means, with respect to the Collateral and in
accordance with the instructions of the Collateral Agent, the Purchase Contract
Agent or the Holder, as applicable:
(i) in the case of Collateral consisting of certificated
securities, delivery as provided in 8-301(a) of the UCC in appropriate
physical form to the recipient accompanied by any duly executed
instruments of transfer, assignments in blank,
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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 security
entitlements relating to securities maintained in book-entry form, by
causing a "securities intermediary" (as defined in Section
8-102(a)(14) of the Code) to (a) credit such "security entitlement"
(as defined in Section 8-102(a)(17) of the Code) to a "securities
account" (as defined in Section 8-501(a) of the Code) maintained by or
on behalf of the recipient and (b) to issue a confirmation to the
recipient with respect to such credit. In the case of Collateral to be
delivered to the Collateral Agent, the securities intermediary shall
be the Securities Intermediary and the securities account shall be the
Collateral Account. In addition, any Transfer of Treasury Securities
and Treasury Consideration hereunder shall be made in accordance with
the TRADES Regulations and other applicable law.
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
SECTION 2.1 THE PLEDGE. (a) The Holders from time to time
acting through the Purchase Contract Agent, as their attorney-in-fact hereby
pledge and grant to the Collateral Agent, for the benefit of the Company, as
collateral security for the payment and performance when due by such Holders of
their respective obligations to the Company under the related Purchase
Contracts, a security interest in, and right of set-off against, all of the
right, title and interest of the Purchase Contract Agent and such Holders in:
(i) the Notes constituting a part of the Units that have not
been released by the Collateral Agent, other than a release to the
Remarketing Agent in connection with a remarketing under Section 4.5
hereof, to such Holders under the provisions of this Agreeement;
(ii) (A) the Treasury Consideration or Treasury Securities
constituting a part of the Units, (B) any Treasury Securities
delivered in exchange for any Notes or Treasury Consideration, as
applicable, in accordance with Section 4.1 hereof, and (C) any Notes
or Treasury Consideration, as applicable, delivered in exchange for
any Treasury Securities in accordance with Section 4.2 hereof, in each
case that have been Transferred to or otherwise received by the
Collateral Agent and not released by the Collateral Agent, other than
a release to the Remarketing Agent in connection with a remarketing
under Section 4.5 hereof, to such Holders under the provisions of this
Agreement;
(iii) the Collateral Account and all securities, financial
assets, security entitlements, cash and other property credited
thereto and all Security Entitlements related thereto;
(iv) upon the occurrence of a Special Event Redemption, the
Treasury Portfolio Transferred to the Collateral Account;
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(v) all Proceeds of the foregoing; and
(vi) all powers and rights now owned or hereafter acquired
under or with respect to any of the foregoing (all of the foregoing,
collectively, the "COLLATERAL").
(b) Prior to or concurrently with the execution and delivery
of this Agreement, the Purchase Contract Agent, on behalf of the initial Holders
of the Units, shall cause the Notes comprising a part of the Normal Units, which
will be subject to the Pledge set forth in this Section 2.1, to be Transferred
to the Collateral Agent for the benefit of the Company.
(c) The pledge provided in this Section 2.1 is herein referred
to as the "Pledge" and the Notes (including any Notes that are delivered
pursuant to Section 6.2 hereof), Treasury Consideration and Treasury Securities
subject to the Pledge, excluding any Notes, Treasury Consideration or Treasury
Securities released from the Pledge as provided in Sections 4.1, 4.2 and 4.3
hereof, respectively, are hereinafter referred to as "Pledged Notes," "Pledged
Treasury Consideration" and "Pledged Treasury Securities," respectively. Subject
to the Pledge and the provisions of Section 2.2 hereof, the Holders from time to
time shall have full beneficial ownership of the Collateral. For purposes of
perfecting the Pledge under applicable law, including, to the extent applicable,
the TRADES Regulations or the Uniform Commercial Code as adopted and in effect
in any applicable jurisdiction, the Collateral Agent shall be the agent of the
Company as provided herein. Whenever directed by the Collateral Agent acting on
behalf of the Company, the Securities Intermediary shall have the right to
reregister in its name the Notes or any other securities held in physical form.
(d) Except as may be required in order to release Notes or
Treasury Consideration, as applicable, in connection with a Special Event
Redemption or with a Holder's election to convert its investment from a Normal
Unit to a Stripped Unit, or except as may be required in order to release
Treasury Securities in connection with a Holder's election to convert its
investment from a Stripped Unit to a Normal Unit, or except as otherwise
required to release Notes, Treasury Consideration or Treasury Securities as
specified herein, the Collateral Agent, shall not relinquish physical possession
of any certificate evidencing Notes, Treasury Securities or Treasury
Consideration, as applicable, prior to the termination of this Agreement. If it
becomes necessary for the Collateral Agent to relinquish physical possession of
a certificate in order to release a portion of the Notes evidenced thereby from
the Pledge, the Company shall use its commercially reasonable best efforts to
arrange for the Securities Intermediary to obtain physical possession of a
replacement certificate evidencing any Notes remaining subject to the Pledge
hereunder registered to the Securities Intermediary or endorsed in blank (or
accompanied by a bond power endorsed in blank) within fifteen calendar days of
the date the Securities Intermediary relinquished possession. The Securities
Intermediary shall promptly notify the Company and the Collateral Agent of its
inability to obtain possession of any such replacement certificate as required
hereby.
(e) Notwithstanding anything contained herein to the contrary,
for avoidance of doubt, (i) the cash payments at the rate of 2.53% per year of
the Stated Amount of the Notes and (ii) after a Special Event Redemption, the
quarterly payments with respect to the Treasury Consideration (as specified in
clause (B) of the definition of Treasury Consideration) that are a
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part of the Normal Units to Holders of Normal Units shall not be subject to the
Pledge and therefore are not part of the Collateral.
SECTION 2.2 DELIVERY, CONTROL AND PERFECTION. (a) The Purchase
Contract Agent shall immediately deliver to the Collateral Agent all
certificates or instruments representing the Collateral accompanied by stock or
bond powers duly executed in blank or other instruments of reasonable
satisfaction to the Collateral Agent.
(b) Except as provided in Section 5.1, at all times prior to
the termination of the Pledge, the Collateral Agent shall have sole control of
the Collateral Account, and the Securities Intermediary shall take instructions
and directions with respect to the Collateral Account solely from the Collateral
Agent. 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 may deliver pursuant to the terms hereof or upon the written
direction of the Company with respect to the Collateral Account, the Collateral
credited thereto and any Security Entitlements with respect thereto. Such
instructions and entitlement orders may, without limitation, direct the
Securities Intermediary to transfer, redeem, assign, or otherwise deliver the
Notes, the Treasury Consideration and the Treasury Securities, and any Security
Entitlements with respect thereto, or sell, liquidate or dispose of such assets
through a broker designated by the Company, and to pay and deliver any income,
proceeds or other funds derived therefrom to the Company. The Collateral Agent
shall be the agent of the Company and shall act only in accordance with the
terms hereof or as otherwise directed in writing by the Company. Without
limiting the generality of the foregoing, the Collateral Agent shall issue
entitlement orders to the Securities Intermediary when and as required by the
terms hereof or as otherwise directed in writing by the Company.
(c) The Securities Intermediary hereby confirms and agrees
that:
(i) all securities or other property underlying any financial
assets credited to the Collateral Account shall be registered in the
name of the Securities Intermediary, or its nominee, endorsed to the
Securities Intermediary, or its nominee, or in blank or credited to
another Collateral Account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to the
Collateral Account be registered in the name of the Purchase Contract
Agent, the Collateral Agent, the Company or any Holder, payable to the
order of, or specially indorsed to, the Purchase Contract Agent, the
Collateral Agent, the Company or any Holder except to the extent the
foregoing have been specially endorsed to the Securities Intermediary
or in blank;
(ii) all property delivered to the Securities Intermediary
pursuant to this Agreement (including, without limitation, any Notes,
Treasury Consideration or Treasury Securities) will be promptly
credited to the Collateral Account;
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(iii) the Collateral Account is an account to which financial
assets are or may be credited, and the Securities Intermediary shall,
subject to the terms of this Agreement, treat the Purchase Contract
Agent as entitled to exercise the rights of any financial asset
credited to the Collateral Account;
(iv) the Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into, any
agreement with any other Person relating to the Collateral Account
and/or any financial assets credited thereto pursuant to which it has
agreed to comply with entitlement orders (as defined in Section
8-102(a)(8) of the Code) of such other Person; and
(v) the Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into, any
agreement with the Company, the Collateral Agent or the Purchase
Contract Agent purporting to limit or condition the obligation of the
Securities Intermediary to comply with entitlement orders as set forth
in this Section 2.2 hereof.
(d) 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.
(e) 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, as may be amended pursuant to Article IX
hereof, shall prevail.
(f) The Purchase Contract Agent hereby irrevocably constitutes
and appoints the Collateral Agent and the Company, with full power of
substitution, as the Purchase Contract Agent's attorney-in-fact to take on
behalf of, and in the name, place and stead of the Purchase Contract Agent and
the Holders, any action necessary or desirable to perfect and to keep perfected
the security interest in the Collateral referred to in Section 2.1. The grant of
such power-of-attorney shall not be deemed to require of the Collateral Agent
any specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder. Notwithstanding the foregoing, in no event shall the Collateral
Agent, the Custodial Agent, the Securities Intermediary or the Purchase Contract
Agent be responsible for the preparation or filing of any financing or
continuation statements in the appropriate jurisdictions or responsible for
maintenance or perfection of any security interest hereunder.
(g) The Purchase Contract Agent shall file with the United
States Internal Revenue Service and deliver to the Holders Forms 1099 (or
successor or comparable forms), to the extent required by law, with respect to
payments to the Holders.
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ARTICLE III
PAYMENTS ON COLLATERAL
SECTION 3.1 PAYMENTS. So long as the Purchase Contract Agent
is the registered owner of the Pledged Notes, Pledged Treasury Consideration or
Pledged Treasury Securities, it shall receive all payments thereon. If the
Pledged Notes are reregistered such that the Collateral Agent becomes the
registered holder, all payments of the principal of, or interest or other
amounts on, the Pledged Notes and all payments of the principal of, or cash
distributions on, any Pledged Treasury Consideration or Pledged Treasury
Securities, that are received by the Collateral Agent and that are properly
payable hereunder shall be paid by the Collateral Agent by wire transfer in same
day funds:
(i) in the case of (A) any interest payments with respect to
the Pledged Notes or Pledged Treasury Consideration (including as
specified in clause (B) of the definition of Treasury Consideration),
as the case may be, with respect to Normal Units and (B) any payments
with respect to any Notes or Treasury Consideration (including as
specified in clause (A) of the definition of Treasury Consideration),
as the case may be, that have been released from the Pledge pursuant
to Section 4.3 hereof, to the Purchase Contract Agent, for the benefit
of the relevant Holders of the Normal Units, to the account designated
by the Purchase Contract Agent for such purpose no later than 11:00
a.m., New York City time, on the Business Day such payment is received
by the Collateral Agent (provided that in the event such payment or
payment instructions are received by the Collateral Agent on a day
that is not a Business Day or after 10:30 a.m., New York City time, on
a Business Day, then such payment shall be made no later than 9:30
a.m., New York City time, on the next succeeding Business Day);
(ii) in the case of any payments with respect to any Treasury
Securities that have been released from the Pledge pursuant to Section
4.3 hereof to the Holders of the Stripped Units, to the accounts and
in such amounts designated by the Purchase Contract Agent (subject to
the Purchase Contract Agent receiving such information from the
Holders) in writing for such purpose no later than 2:00 p.m., New York
City time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment or payment
instructions are received by the Collateral Agent on a day that is not
a Business Day or after 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); any payment to
be made directly to the Holders of such Stripped Units shall be
subject to applicable federal withholding law, including the
requirement that a Holder shall have provided to the Collateral Agent
its certified taxpayer identification number by furnishing appropriate
Forms W-9 (or such other forms as shall be applicable); and
(iii) in the case of payments in respect of any Pledged Notes,
Pledged Treasury Consideration (as specified in clause (A) of the
definition of Treasury Consideration) or Pledged Treasury Securities,
as the case may be, to be paid upon settlement of such Holder's
obligations to purchase Ordinary Shares under the Purchase Contract,
to the Company on the Stock Purchase Date in accordance with the
procedure set forth in
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Section 4.5(a) or 4.5(b) hereof, in full satisfaction of the
respective obligations of the Holders under the related Purchase
Contracts and, to the extent such payments exceed the Purchase Price,
to the Purchase Contract Agent for the benefit of the Holders.
SECTION 3.2 APPLICATION OF PAYMENTS. All payments received by
the Purchase Contract Agent as provided herein shall be applied by the Purchase
Contract Agent pursuant to the provisions of the Purchase Contract Agreement.
If, notwithstanding the foregoing, the Purchase Contract Agent shall receive any
payments of principal on account of any Notes or Treasury Consideration (which,
shall be as specified in clause (A) of the definition of Treasury
Consideration), as applicable, that, at the time of such payments, are Pledged
Notes or Pledged Treasury Consideration (which, shall be as specified in clause
(A) of the definition of Treasury Consideration), as the case may be, or a
Holder of a Stripped Unit shall receive any payments of principal on account of
any Treasury Securities that, at the time of such payment, are Pledged Treasury
Securities, the Purchase Contract Agent or such Holder shall hold the same as
trustee of an express trust for the benefit of the Company (and promptly deliver
the same over to the Company) for application to the obligations of the Holders
under the related Purchase Contracts, and the Holders shall acquire no right,
title or interest in any such payments of principal so received.
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES
SECTION 4.1 COLLATERAL SUBSTITUTION AND THE CREATION OF
STRIPPED UNITS. At any time on or prior to the thirteenth Business Day
immediately preceding the Stock Purchase Date, a Holder of Normal Units shall
have the right to substitute Treasury Securities for the Pledged Notes or
Pledged Treasury Consideration, as the case may be, securing such Holder's
obligations under the Purchase Contracts comprising a part of such Normal Units,
in integral multiples of 40 Normal Units, or after a Special Event Redemption,
in integral multiples of Normal Units so that Treasury Securities to be
deposited and the Treasury Consideration, as the case may be, to be released are
in integral multiples of $1,000, by (a) Transferring to the Collateral Agent
Treasury Securities having an aggregate principal amount equal to the aggregate
Stated Amount of such Normal Units and (b) delivering such Normal Units to the
Purchase Contract Agent, accompanied by a notice, substantially in the form of
EXHIBIT B hereto, to the Purchase Contract Agent, with a copy of such notice to
the Company, stating that such Holder has Transferred Treasury Securities to the
Collateral Agent pursuant to clause (a) above (stating the principal amount, the
maturities and the CUSIP numbers of the Treasury Securities Transferred by such
Holder) and requesting that the Purchase Contract Agent instruct the Collateral
Agent to release from the Pledge the Pledged Notes or Pledged Treasury
Consideration related to such Normal Units, whereupon the Purchase Contract
Agent shall promptly give such instruction to the Collateral Agent, with a copy
of such instruction to the Company, in the form provided in EXHIBIT A. Upon
receipt of Treasury Securities from a Holder of Normal Units and the related
instruction from the Purchase Contract Agent, the Collateral Agent shall release
the Pledged Notes or Pledged Treasury Consideration and shall promptly Transfer
such Pledged Notes or Pledged Treasury Consideration free and clear of any lien,
pledge or security interest created hereby, to the Purchase Contract Agent. All
items Transferred and/or substituted by any Holder
9
pursuant to this Section 4.1, Section 4.2 or any other Section of this Agreement
shall be Transferred and/or substituted free and clear of all liens, claims and
encumbrances, except as otherwise set forth herein.
SECTION 4.2 COLLATERAL SUBSTITUTION AND THE RE-CREATION OF
NORMAL UNITS.
(a) At any time on or prior to the thirteenth Business Day
immediately preceding the Stock Purchase Date, a Holder of Stripped Units shall
have the right to reestablish Normal Units (a) consisting of the Purchase
Contracts and Notes in integral multiples of 40 Normal Units, or (b) after a
Special Event Redemption, consisting of the Purchase Contracts and the Treasury
Consideration (identified and calculated by reference to the Treasury
Consideration then comprising Normal Units) or the appropriate portion of the
Treasury Portfolio in integral multiples of Stripped Units so that the Treasury
Consideration to be deposited and the Treasury Securities to be released are in
integral multiples of $1,000, by (x) Transferring to the Collateral Agent Notes
or the Treasury Consideration, as the case may be, then comprising such number
of Normal Units as is equal to such Stripped Units and (y) delivering such
Stripped Units to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of EXHIBIT B hereto, to the Purchase Contract Agent,
with a copy of such notice to the Company, stating that such Holder has
transferred Notes or Treasury Consideration to the Collateral Agent pursuant to
clause (a) above and requesting that the Purchase Contract Agent instruct the
Collateral Agent to release from the Pledge the Pledged Treasury Securities
related to such Stripped Units, whereupon the Purchase Contract Agent shall give
such instruction to the Collateral Agent, with a copy of such instruction to the
Company, in the form provided in EXHIBIT A. Upon receipt of the Notes or the
Treasury Consideration, as the case may be, from such Holder and the instruction
from the Purchase Contract Agent, the Collateral Agent shall release the Pledged
Treasury 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.
(b) Holders of Stripped Units who reestablish Normal Units
shall be responsible for any fees or expenses payable to the Collateral Agent
for its services as Collateral Agent in respect of the substitution, and the
Company shall not be responsible for any such fees or expenses.
SECTION 4.3 TERMINATION EVENT. (a) Upon receipt by the
Collateral Agent of written notice from the Company or the Purchase Contract
Agent that there has occurred a Termination Event and identifying the nature of
the Termination Event, the Collateral Agent shall release all Collateral from
the Pledge and shall promptly Transfer any Pledged Notes or Pledged Treasury
Consideration, as the case may be, and Pledged Treasury Securities to the
Purchase Contract Agent for the benefit of the Holders of the Normal Units and
the Stripped Units, respectively, free and clear of any lien, pledge or security
interest or other interest created in favor of the Collateral Agent hereby.
(b) If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code or becoming subject to a petition
under clause (ii) of the definition of Bankruptcy Law, and if the Collateral
Agent shall fail for any reason to promptly effectuate, the release and Transfer
of all Pledged Notes, Pledged Treasury Consideration or
10
Pledged Treasury Securities, as the case may be, as provided by this Section
4.3, the Purchase Contract Agent, shall:
(i) use its best efforts to obtain, at the expense of the
Company, an opinion of a nationally recognized law firm reasonably
acceptable to the Collateral Agent to the effect that, as a result of
the Company's being the debtor in such a bankruptcy case or becoming
subject to a petition under clause (ii) of the definition of
Bankruptcy Law, the Collateral Agent will not be prohibited from
releasing or Transferring the Collateral as provided in this Section
4.3, and shall deliver such opinion to the Collateral Agent within ten
days after the occurrence of such Termination Event, and if (y) the
Purchase Contract Agent shall be unable to obtain such opinion within
ten days after the occurrence of such Termination Event or (z) the
Collateral Agent shall continue, after delivery of such opinion, to
refuse to effectuate the release and Transfer of all Pledged Notes,
Pledged Treasury Consideration or Pledged Treasury Securities, as the
case may be, as provided in this Section 4.3, then the Purchase
Contract Agent shall within fifteen days after the occurrence of such
Termination Event commence an action or proceeding in the court with
jurisdiction of the Company's case under the applicable Bankruptcy Law
seeking an order requiring the Collateral Agent to effectuate the
release and transfer of all Pledged Notes, Pledged Treasury
Consideration or Pledged Treasury Securities, as the case may be, as
provided by this Section 4.3; or
(ii) commence an action or proceeding like that described in
subsection (i)(z) hereof within ten days after the occurrence of such
Termination Event.
SECTION 4.4 EARLY SETTLEMENT; MERGER EARLY SETTLEMENT; CASH
SETTLEMENT. Upon written notice to the Collateral Agent by the Purchase Contract
Agent that one or more Holders of Units have elected to effect Early Settlement,
Merger Early Settlement or Cash Settlement of their respective obligations under
the Purchase Contracts forming a part of such Units in accordance with the terms
of the Purchase Contracts and the Purchase Contract Agreement (setting forth the
number of such Purchase Contracts as to which such Holders have elected to
effect Early Settlement, Merger Early Settlement or Cash Settlement), and that
the Purchase Contract Agent has received from such Holders, and paid to the
Company as confirmed by written notice to the Collateral Agent by the Company,
the related Early Settlement Amounts, Merger Early Settlement Amounts or Cash
Settlement Amounts, as the case may be, pursuant to the terms of the Purchase
Contracts and the Purchase Contract Agreement and that all conditions to such
Early Settlement, Merger Early Settlement or Cash Settlement, as the case may
be, have been satisfied, then the Collateral Agent shall release from the Pledge
(a) Pledged Notes or Pledged Treasury Consideration, as the case may be, in the
case of a Holder of Normal Units or (b) Pledged Treasury Securities, in the case
of a Holder of Stripped Units, identified by the Purchase Contract Agent as
relating to such Purchase Contracts as to which such Holders have paid such
Early Settlement Amounts, Merger Early Settlement Amounts or Cash Settlement
Amounts, and shall Transfer all such Pledged Notes, Pledged Treasury
Consideration or Pledged Treasury Securities, as the case may be, free and clear
of the Pledge created hereby, to the Purchase Contract Agent for the benefit of
the Holders.
SECTION 4.5 REMARKETING; APPLICATION OF PROCEEDS; SETTLEMENT.
(a) Pursuant to the Purchase Contract Agreement, the Purchase Contract Agent
shall notify, by 10:00 a.m.,
11
New York City time, on the second Business Day immediately preceding the
Remarketing Date, the Remarketing Agent and the Collateral Agent of the
aggregate principal amount of Notes comprising part of Normal Units to be
remarketed. The Collateral Agent shall, by 10:00 a.m., New York City time, on
the Business Day immediately preceding the Remarketing Date, without any
instruction from Holders of Normal Units, deliver (i) the Pledged Notes to be
remarketed to the Remarketing Agent for remarketing and (ii) the remaining
Pledged Notes to the Purchase Contract Agent for distribution to the Holders
that have elected not to participate in the remarketing in accordance with the
Purchase Contract Agreement. Upon completion of a successful remarketing, after
deducting as the remarketing fee an amount not exceeding 25 basis points (0.25%)
of the Remarketing Value of such Pledged Notes, the Remarketing Agent will
deliver the proceeds of such remarketing to the Collateral Agent for the benefit
of the Company to be held in Trust for the Company. Upon receipt of the proceeds
following a successful remarketing, (i) the Collateral Agent, for the benefit of
the Company, shall thereupon apply such proceeds in an amount equal to the
aggregate Stated Amount of the related Normal Units in direct settlement and
satisfaction in full of such Normal Units Holders' obligations to pay to the
Company the Purchase Price under the Purchase Contracts on the Stock Purchase
Date and (ii) the remaining portion, if any, of the proceeds of such successful
remarketing shall be distributed by the Remarketing Agent to the Purchase
Contract Agent for payment on a pro rata basis to such Normal Units Holders
participating in such remarketing.
(b) The Remarketing Agent shall agree to make one or more
attempts to remarket the Notes in accordance with the procedures set forth in
the Purchase Contract Agreement and the Remarketing Agreement between the
Remarketing Date and the last Subsequent Remarketing Date. If by 4:00 p.m., New
York City time, on the third Business Day immediately preceding the Stock
Purchase Date the Remarketing Agent has failed to remarket the Notes at a price
equal to 100.25% of the aggregate principal amount of the Notes participating in
the remarketing, the "Last Failed Remarketing" shall be deemed to have occurred.
In this case, the Remarketing Agent will agree to advise the Collateral Agent in
writing that it cannot remarket the related Pledged Notes of such Holders of
Normal Units and the Remarketing Agent will agree pursuant to the Remarketing
Agreement to return to the Collateral Agent the Notes delivered to it pursuant
to Section 4.5(a) within three Business Days of the Last Failed Remarketing. The
Collateral Agent, for the benefit of the Company will, at the written direction
of the Company, deliver or dispose of the Pledged Notes in accordance with the
Company's written instructions to satisfy in full, from any such disposition or
retention, such Holders' obligations to pay the Purchase Price for the Ordinary
Shares; provided that if upon the Last Failed Remarketing, the Collateral Agent
delivers or disposes of the Pledged Notes in accordance with the written
instructions of the Company, any accumulated and unpaid interest on such Notes
will become payable by the Company to the Purchase Contract Agent for payment to
the Holder of the Normal Units to which such Notes relate in accordance with the
Purchase Contract Agreement.
(c) In the event a Holder of Stripped Units has not made an
Early Settlement, Merger Early Settlement or Cash Settlement of the Purchase
Contracts underlying its Stripped Units, such Holder shall be deemed to have
elected to pay for the Ordinary Shares to be issued under such Purchase
Contracts from the payments received in respect of the related Pledged Treasury
Securities. Without receiving any instruction from any such Holder of Stripped
Units, the Collateral Agent shall apply such payments to the Company in
settlement of such Purchase
12
Contracts on the Stock Purchase Date pursuant to written instructions from the
Purchase Contract Agent. In the event the payments received in respect of the
related Pledged Treasury Securities are in excess of the aggregate Purchase
Price of the Purchase Contracts being settled thereby, the Collateral Agent
shall distribute such excess, when received, to the Purchase Contract Agent for
payment to such Holders of Stripped Units.
(d) Pursuant to the Remarketing Agreement and the Purchase
Contract Agreement, on or prior to the thirteenth Business Day immediately
preceding the Stock Purchase Date, but no earlier than the sixteenth Business
Day immediately preceding the Stock Purchase Date, holders of Separate Notes may
elect to have their Separate Notes remarketed by delivering their Separate
Notes, together with a notice of such election, substantially in the form of
EXHIBIT C hereto, to the Custodial Agent. On the second Business Day immediately
prior to the Remarketing Date, by 10:00 a.m., New York City time, the Custodial
Agent shall notify the Remarketing Agent of the aggregate principal amount of
such Separate Notes to be remarketed. The Custodial Agent will hold such
Separate Notes in an account separate from the Collateral Account. A holder of
Separate Notes electing to have its Separate Notes remarketed will also have the
right to withdraw such election by written notice to the Custodial Agent,
substantially in the form of EXHIBIT D hereto, on or prior to the thirteenth
Business Day immediately preceding the Stock Purchase Date, upon which notice
the Custodial Agent will return such Separate Notes to such holder. On the
Business Day immediately preceding the Remarketing Date, the Custodial Agent at
the written direction of the Remarketing Agent will deliver to the Remarketing
Agent for remarketing all Separate Notes delivered to the Custodial Agent
pursuant to this Section 4.5(d) and not withdrawn pursuant to the terms hereof
prior to such date. In the event of a successful remarketing, after deducting as
the remarketing fee an amount not exceeding 25 basis points (0.25%) of the
Remarketing Value of such Separate Notes, the Remarketing Agent will remit to
the Custodial Agent, for the benefit of the holders of such Separate Notes, the
portion of the proceeds from such remarketing equal to the amount calculated in
respect of such Separate Notes as set forth in Section 5.4(b) of the Purchase
Contract Agreement. If, despite using reasonable best efforts, the Remarketing
Agent advises the Custodial Agent in writing that there has been a Last Failed
Remarketing, the Remarketing Agent will promptly return such Notes to the
Custodial Agent for redelivery to the holders of such Separate Notes. For
purposes of this Section 4.5(d), a "holder" of Separate Notes shall mean the
Person in whose name such Separate Notes are registered on the books of the
registrar for the Notes.
ARTICLE V
VOTING RIGHTS -- NOTES
SECTION 5.1 EXERCISE BY PURCHASE CONTRACT AGENT. The Purchase
Contract Agent may exercise, or refrain from exercising, any and all voting and
other consensual rights pertaining to the Pledged Notes or any part thereof for
any purpose not inconsistent with the terms of this Agreement and in accordance
with the terms of the Purchase Contract Agreement; provided that the Purchase
Contract Agent shall not exercise or, as the case may be, shall not refrain from
exercising such right if, in the judgment of the Company, such action would
impair or otherwise have a material adverse effect on the value of all or any of
the Pledged Notes; and provided, further, that the Purchase Contract Agent shall
give the Company and the Collateral
13
Agent at least five Business Days' prior written notice of the manner in which
it intends to exercise, or its reasons for refraining from exercising, any such
right. Upon receipt of any notices and other communications in respect of any
Pledged Notes, including notice of any meeting at which holders of Notes are
entitled to vote or solicitation of consents, waivers or proxies of holders of
Notes, the Collateral Agent shall use reasonable efforts to send promptly to the
Purchase Contract Agent such notice or communication, and as soon as reasonably
practicable after receipt of a written request therefor from the Purchase
Contract Agent, execute and deliver to the Purchase Contract Agent such proxies
and other instruments in respect of such Pledged Notes (in form and substance
satisfactory to the Collateral Agent) as are prepared by the Purchase Contract
Agent with respect to the Pledged Notes.
ARTICLE VI
RIGHTS AND REMEDIES; SPECIAL EVENT REDEMPTION
SECTION 6.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT. (a)
In addition to the rights and remedies available at law or in equity, after an
event of default under any of the Purchase Contracts by a Holder thereof, 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, at the direction of the Company (i)
retention of the Pledged Notes or other Collateral in full satisfaction of the
Holders' obligations under the Purchase Contracts or (ii) sale of the Pledged
Notes or other Collateral in one or more public or private sales or otherwise at
the written direction of the Company.
(b) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, in the event the Collateral Agent is
unable to make payments to the Company on account of any Pledged Treasury
Consideration or Pledged Treasury Securities as provided in Article III hereof
in full satisfaction of the obligations of the Holder of the Units of which such
Pledged Treasury Consideration or Pledged Treasury Securities, as applicable, is
a part under the related Purchase Contracts, any such inability to make a
payment shall constitute an event of default under the Purchase Contracts and
the Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities or such Pledged Treasury Consideration, as applicable, and
such obligations of such Holder, any and all of the rights and remedies
available to a secured party under the Code and the TRADES Regulations after
default by a debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, the Collateral Agent is hereby
irrevocably authorized to receive and
14
collect all payments of (i) the principal amount of, or interest on, the Pledged
Notes, or (ii) the principal amount of the Pledged Treasury Consideration or
Pledged Treasury Securities, subject, in each case, to the provisions of Article
III.
(d) The Purchase Contract Agent, individually and as
attorney-in-fact for each Holder of Units, agrees that, from time to time, upon
the written request of the Company or the Collateral Agent (acting upon the
written request of the Company), the Purchase Contract Agent or such Holder
shall execute and deliver such further documents and do such other acts and
things as may be necessary, including as the Company or the Collateral Agent
(acting upon the written request of the Company) may reasonably request in order
to maintain the Pledge, and the perfection and priority thereof, and to confirm
the rights of the Collateral Agent hereunder. The Purchase Contract Agent shall
have no liability to any Holder for executing any documents or taking any such
acts requested by the Company or the Collateral Agent (acting upon the written
request of the Company) hereunder, except for liability for its own grossly
negligent act, its own grossly negligent failure to act, its own bad faith or
its own willful misconduct.
SECTION 6.2 SUBSTITUTIONS. Whenever a Holder has the right to
substitute Treasury Securities, Notes, or Treasury Consideration, as the case
may be, for Collateral held by the Collateral Agent, such substitution shall not
constitute a novation of the security interest created hereby.
SECTION 6.3 SPECIAL EVENT REDEMPTION. Upon the occurrence of a
Special Event Redemption prior to the Stock Purchase Date and the receipt of the
Redemption Price of the Pledged Notes by the Collateral Agent, the Collateral
Agent will, at the written direction of the Company, apply the Redemption Price
to purchase on behalf of the Holders of Normal Units the Treasury Portfolio. The
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account
to secure the obligation of all Holders of Normal Units to purchase Ordinary
Shares of the Company under the Purchase Contracts constituting a part of such
Normal Units, in substitution for the Pledged Notes. Thereafter, the Collateral
Agent shall have such security interests, rights and obligations with respect to
the Treasury Portfolio as it had in respect of the Pledged Notes as provided in
Articles II, III, IV, V and VI, and any reference herein to the Notes shall be
deemed to be reference to such Treasury Portfolio, and any reference herein to
interest on the Notes shall be deemed to be a reference to corresponding
distributions on such Treasury Portfolio. Upon the occurrence of a Special Event
Redemption and the satisfaction of all terms and conditions related thereto as
forth in the Indenture, including receipt of the Redemption Price, the
Collateral Agent shall be authorized to surrender the Notes in accordance with
the provisions of the Indenture.
SECTION 6.4 CASH RECEIVED FROM HOLDERS OF NORMAL UNITS NOT
PARTICIPATING IN THE REMARKETING.
If a Holder of Normal Units shall opt not to participate in
the remarketing in accordance with the Purchase Contract Agreement and upon the
receipt by the Collateral Agent of the Cash Consideration paid by such Holder
sufficient to satisfy the Holder's obligations to the Company under the related
Purchase Contracts in full, the Collateral Agent shall transfer such Cash
Consideration to the Collateral Account to secure and be applied in direct
settlement and satisfaction in full of the obligations of such Holder to
purchase Ordinary Shares of the
15
Company under the Purchase Contracts constituting a part of such Normal Units.
Thereupon, the Collateral Agent shall deliver the related Pledged Notes to the
Purchase Contract Agent on the Business Day immediately preceding the first day
of the Remarketing Period, free and clear of any lien, claim and security
interest created hereby. Thereafter, such Units will be Stripped Units and the
Collateral Agent shall have a first priority perfected security interest in such
Cash Consideration paid by such Holder. In such event, all references in this
Agreement, including for purposes of Section 4.3, to the Treasury Securities or
Pledged Treasury Securities shall be deemed to include such Cash Consideration
(the Cash Consideration subject to the Pledge referred to as the "Pledged Cash
Consideration") or Pledged Cash Consideration, as the case may be, in addition
to the Treasury Securities or Pledged Treasury Securities, as the case may be,
with respect to the applicable Units.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF THE HOLDERS. The
Holders from time to time, acting through the Purchase Contract Agent as their
attorney-in-fact (it being understood that the Purchase Contract Agent shall not
be liable for any representation or warranty made by or on behalf of a Holder),
hereby represent and warrant to the Collateral Agent, which representations and
warranties shall be deemed repeated on each day a Holder Transfers Collateral,
and on each day a person becomes a Holder, that:
(a) such Holder has the power to grant a security interest in
and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral
and, in the case of Collateral delivered in physical form, is the sole
holder of such Collateral and is the sole beneficial owner of, or has
the right to Transfer, the Collateral it Transfers to the Collateral
Agent, free and clear of any security interest, lien, encumbrance,
call, liability to pay money or other restriction other than the
security interest and lien granted under Section 2.1;
(c) upon the Transfer of the Collateral to the Collateral
Account, the Collateral Agent, for the benefit of the Company, will
have a valid and perfected first priority security interest therein
(assuming that any central clearing operation or any Intermediary or
other entity not within the control of the Holder involved in the
Transfer of the Collateral, including the Collateral Agent, gives the
notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the
establishment and exercise of control pursuant to Section 2.2); and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result in the creation of
any security interest, lien or other encumbrance on the Collateral
other than the security interest and lien granted under Section 2.1 or
violate any provision of any existing law or regulation applicable to
it or of
16
any mortgage, charge, pledge, indenture, contract or undertaking to
which it is a party or which is binding on it or any of its assets.
SECTION 7.2 REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL
AGENT, CUSTODIAL AGENT AND SECURITIES INTERMEDIARY. The Collateral Agent,
Custodial Agent and Securities Intermediary (each an "Agent") hereby represents
and warrants:
(a) The Collateral Agent, Custodial Agent and Securities
Intermediary is a national banking association duly organized and
existing under the laws of the United States of America;
(b) The Securities Intermediary is a "securities intermediary"
as defined in Article 8-102(a)(14) of the Code and the Collateral
Account is a "securities account" as such term is defined in Section
8-501(a) of the Code;
(c) The execution, delivery and performance by the Collateral
Agent, the Custodial Agent and the Securities Intermediary of this
Agreement have each been duly authorized by all necessary corporate
action on the part of each such Agent; this Agreement has been duly
executed and delivered by the Collateral Agent, the Custodial Agent
and the Securities Intermediary and constitutes a valid and legally
binding obligation of each of the Agents, enforceable against such
Agents in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles;
(d) The execution, delivery and performance by the Collateral
Agent, the Custodial Agent and the Securities Intermediary of this
Agreement do not violate or constitute a breach of the Articles of
Incorporation or By-Laws of any of such Agents; and
(e) No consent of any federal or state banking authority
having regulatory authority over the Agents in their individual
capacity is required for the execution and delivery of, or performance
by the Agents of their respective obligations under, this Agreement.
SECTION 7.3 COVENANTS. The Holders from time to time, acting
through the Purchase Contract Agent as their attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any covenant
made by or on behalf of a Holder), hereby covenant to the Collateral Agent that
for so long as the Collateral remains subject to the Pledge:
(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
17
beneficial interest therein, subject to the pledge hereunder,
transferred in connection with the Transfer of the Units.
ARTICLE VIII
THE COLLATERAL AGENT
SECTION 8.1 APPOINTMENT, POWERS AND IMMUNITIES. (a) The
Collateral Agent, the Custodial Agent or the Securities Intermediary shall act
as agent for the Company hereunder with such powers as are specifically vested
in the Collateral Agent, the Custodial Agent or the Securities Intermediary, as
the case may be, by the terms of this Agreement, together with such other powers
as are reasonably incidental thereto. Each of the Collateral Agent, the
Custodial Agent and the Securities Intermediary:
(i) shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants or
obligations shall be inferred from this Agreement against any of them,
nor shall any of them be bound by the provisions of any agreement by
any party hereto beyond the specific terms hereof;
(ii) shall not be responsible for any recitals contained in
this Agreement, or in any certificate or other document referred to or
provided for in, or received by it under, this Agreement, the Units or
the Purchase Contract Agreement, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement (other than as against the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be), the Units
or the Purchase Contract Agreement or any other document referred to
or provided for herein or therein or for any failure by the Company or
any other Person (except the Collateral Agent, the Custodial Agent or
the Securities Intermediary, as the case may be) to perform any of its
obligations hereunder or thereunder or, except as expressly required
hereby, for the existence, validity, perfection, priority or
maintenance of any security interest created hereunder;
(iii) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder (except in the case of
the Collateral Agent, pursuant to written directions furnished under
Section 8.2 hereof, subject to Section 8.6 hereof);
(iv) shall not be responsible for any action taken or omitted
to be taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith or
therewith, except for its own gross negligence, bad faith or willful
misconduct;
(v) shall not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with respect
to, the Units or other property deposited hereunder;
(vi) may perform any of their duties hereunder directly or by
or through agents or attorneys appointed with due care;
18
(vii) shall be entitled to consult with counsel and to act in
full reliance upon the advice of such counsel concerning matters
pertaining to the agencies created hereby and its duties hereunder,
and shall not be liable for any action taken or omitted to be taken by
it in good faith and in reliance upon and in accordance with the
reasonable advice of counsel selected by it;
(viii) shall not be liable with respect to any action taken by
it in good faith in accordance with any direction of the Company or
its agents except for its own gross negligence or willful misconduct;
and
(ix) shall not be liable for any failure or delay in the
performance of its obligations hereunder because of circumstances
beyond its control, including, but not limited to, acts of God, flood,
war (whether declared or undeclared), terrorism, fire, riot, embargo,
government action, including any laws, ordinances, regulations,
governmental action or the like which delay, restrict or prohibit the
providing of services contemplated by this Agreement.
Subject to the foregoing, during the term of this Agreement,
each of the Collateral Agent, the Custodial Agent and the Securities
Intermediary, in connection with the safekeeping and preservation of the
Collateral hereunder, shall use the same standard of care it applies for similar
property held for its own account.
(b) No provision of this Agreement shall require the
Collateral Agent, the Custodial Agent or the Securities Intermediary to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. In no event shall the Collateral
Agent, the Custodial Agent or the Securities Intermediary be liable for any
amount in excess of the value of the Collateral. Notwithstanding the foregoing,
the Collateral Agent, the Custodial Agent, the Purchase Contract Agent and
Securities Intermediary, each in its individual capacity, hereby waive any right
of set-off, banker's lien, liens or perfection rights as securities intermediary
or any counterclaim with respect to any of the Collateral.
(c) The Collateral Agent, Custodial Agent and Securities
Intermediary shall have no liability whatsoever for the action or inaction of
any Clearing Agency or any book-entry system thereof. In no event shall any
Clearing Agency or any book-entry system thereof be deemed an agent or
subcustodian of the Collateral Agent, Custodial Agent and Securities
Intermediary.
SECTION 8.2 INSTRUCTIONS OF THE COMPANY. The Company shall
have the right, by one or more instruments in writing executed and delivered to
the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, to direct the time, method and place of conducting any proceeding
for the realization of any right or remedy available to the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, or of
exercising any power conferred on the Collateral Agent, the Custodial Agent or
the Securities Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this Agreement; provided that
(i) such direction shall be in writing and shall not conflict with the
provisions of any law or of this Agreement and (ii) the Collateral Agent, the
Custodial Agent and the Securities Intermediary shall each receive indemnity
reasonably
19
satisfactory to it as provided herein. Nothing in this Section 8.2 shall impair
the right of each of the Collateral Agent, the Custodial Agent or the Securities
Intermediary 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, in absence of bad faith, shall be
entitled conclusively to rely upon any certification, order, judgment,
instructions, opinion, notice or other communication (including, without
limitation, any thereof by telephone or facsimile) reasonably believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons (without being required to determine the correctness of
any fact stated therein), and upon advice and written 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 written
instructions given by the Company in accordance with this Agreement.
SECTION 8.4 RIGHTS IN OTHER CAPACITIES. The Collateral Agent,
the Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any Holder of Units
and any holder of Separate Notes (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be, and the Collateral
Agent, the Custodial Agent and the Securities Intermediary and their affiliates
may accept fees and other consideration from the Purchase Contract Agent, any
Holder of Units or any holder of Separate Notes without having to account for
the same to the Company; provided that each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent covenants and agrees with the Company
that it shall not accept, receive or permit there to be created in favor of
itself (and waives any right of set-off or banker's lien with respect to) and
shall take no affirmative action to permit there to be created in favor of any
other Person, any security interest, lien or other encumbrance of any kind in or
upon the Collateral and the Collateral shall not be commingled with any other
assets of any such Person.
SECTION 8.5 NON-RELIANCE ON COLLATERAL AGENT. None of the
Securities Intermediary, the Custodial Agent or the Collateral Agent shall be
required to keep itself informed as to the performance or observance by the
Purchase Contract Agent or any Holder of Units of this Agreement, the Purchase
Contract Agreement, the Units or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Purchase Contract
Agent or any Holder of Units. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall not have any duty or responsibility to provide the
Company or the Remarketing Agent with any credit or other information concerning
the affairs, financial condition or business of the Purchase Contract Agent, any
Holder of Units or any holder of Separate Notes (or any of their respective
subsidiaries or affiliates) that may come into the possession of the Collateral
Agent, the Custodial Agent or the Securities Intermediary or any of their
respective affiliates.
20
SECTION 8.6 COMPENSATION AND INDEMNITY. The Company agrees:
(a) to pay each of the Collateral Agent, the Custodial Agent
and the Securities Intermediary from time to time such compensation as shall be
agreed in writing between the Company and the Collateral Agent, Custodial Agent
or the Securities Intermediary, as the case may be, for all services rendered by
each of them hereunder; and
(b) to indemnify the Collateral Agent, the Custodial Agent and
the Securities Intermediary and their officers, directors and agents for, and to
hold each of them harmless from and against, any loss, liability or reasonable
out-of-pocket expense incurred without 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 one counsel) of defending itself against any claim or liability in
connection with the exercise or performance of such powers and duties or
collecting such amounts. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall each promptly notify the Company of any third
party claim which may give rise to the indemnity hereunder and give the Company
the opportunity to control the defense of such claim with counsel reasonably
satisfactory to the indemnified party, provided no conflict of interest exists
(if such a conflict of interests exists, the Collateral Agent, the Custodial
Agent and the Securities Intermediary will be entitled to one separate counsel
payable by the Company), and if the Company so elects to assume such defense,
the Company shall in good faith defend the Collateral Agent, the Custodial Agent
or the Securities Intermediary (in which case all attorney's fees and expenses
shall be borne by the Company). No compromise or settlement of any claims may be
effected by any party without the other parties' consent (which consent shall
not be unreasonably withheld) unless (i) there is no finding or omission of any
violation of law and no effect on any other claims that may be made against any
of such other parties and (ii) the sole relief provided is monetary damages that
are paid in full by the party seeking the compromise or settlement. The
provisions of this Section 8.6(b) shall survive the termination of this
Agreement or the resignation or removal of the Collateral Agent, the Custodial
Agent or the Securities Intermediary.
SECTION 8.7 FAILURE TO ACT. In the event of any ambiguity in
the provisions of this Agreement or any dispute between or conflicting claims by
or among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent, Custodial Agent and the
Securities Intermediary shall be entitled, after prompt notice to the Company
and the Purchase Contract Agent, at its sole option, to refuse to comply with
any and all claims, demands or instructions with respect to such property or
funds so long as such dispute or conflict shall continue, and neither the
Collateral Agent, Custodial Agent nor the Securities Intermediary shall be or
become liable in any way to any of the parties hereto for its failure or refusal
to comply with such conflicting claims, demands or instructions. The Collateral
Agent, Custodial Agent and the Securities Intermediary shall be entitled to
refuse to act until either (i) such conflicting or adverse claims or demands
shall have been finally determined by a court of competent jurisdiction or
settled by agreement between the conflicting parties as evidenced in a writing,
reasonably satisfactory to the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, or (ii) the Collateral Agent, the
Custodial Agent or the Securities Intermediary,
21
as the case may be, shall have received security or an indemnity reasonably
satisfactory to the Collateral Agent, Custodial Agent or the Securities
Intermediary, as the case may be, sufficient to save the Collateral Agent,
Custodial Agent or the Securities Intermediary, as the case may be, harmless
from and against any and all loss, liability or reasonable out-of-pocket expense
which the Collateral Agent, Custodial Agent or the Securities Intermediary, as
the case may be, may incur by reason of its acting without bad faith, willful
misconduct or negligence. The Collateral Agent, Custodial Agent or the
Securities Intermediary may, but shall not be required, in addition elect to
commence an interpleader action or seek other judicial relief or orders at the
expense of the Company as the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, may deem necessary. Notwithstanding
anything contained herein to the contrary, neither the Collateral Agent,
Custodial Agent nor the Securities Intermediary shall be required to take any
action that is in the reasonable opinion of its counsel contrary to law or to
the terms of this Agreement, or which would in its reasonable opinion subject it
or any of its officers, employees or directors to liability.
SECTION 8.8 RESIGNATION; REPLACEMENT OF COLLATERAL AGENT,
CUSTODIAL AGENT OR SECURITIES INTERMEDIARY. Subject to the appointment and
acceptance of a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as provided below, (a) the Collateral Agent, Custodial Agent or
the Securities Intermediary may resign at any time by giving notice thereof to
the Company and the Purchase Contract Agent as attorney-in-fact for the Holders
of Units, (b) the Collateral Agent, Custodial Agent or the Securities
Intermediary may be removed at any time by the Company (with or without cause)
by notice to the Purchase Contract Agent and the Collateral Agent, the Custodial
Agent and the Securities Intermediary and (c) if the Collateral Agent, Custodial
Agent or the Securities Intermediary fails to perform any of its material
obligations hereunder in any material respect for a period of not less than 20
days after receiving written notice of such failure by the Purchase Contract
Agent and such failure shall be continuing, the Collateral Agent, Custodial
Agent or the Securities Intermediary may be removed by the Purchase Contract
Agent. The Purchase Contract Agent shall promptly notify the Company of any
removal of the Collateral Agent, the Custodial Agent or the Securities
Intermediary pursuant to clause (c) of the immediately preceding sentence. Upon
notice of any such resignation or removal, the Company shall have the right to
appoint a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be. If no successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be, shall have been so
appointed and shall have accepted such appointment within 30 days after any
notice of such resignation or such removal, then the retiring Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, may at the
Company's expense petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be. Upon removal of the Collateral Agent,
Custodial Agent or Securities Intermediary, no fees paid to the retiring
Collateral Agent, Custodial Agent or Securities Intermediary pursuant to Section
8.6(a) of this Agreement shall be refunded. Each successor Collateral Agent,
Custodial Agent and the Securities Intermediary shall be a bank which has an
office or agency in New York, New York with a combined capital and surplus of at
least $50,000,000 or any affiliate of a bank holding company having such capital
and surplus. Upon the acceptance of any appointment as Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, hereunder by a
successor Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, such successor shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, and the retiring
Collateral Agent, Custodial Agent or Securities Intermediary, as the case may
be, upon payment of any of its
22
unpaid fees and expenses, shall take all appropriate action to transfer any
money and property held by it hereunder (including the Collateral) to such
successor. The retiring Collateral Agent, Custodial Agent or Securities
Intermediary shall, upon such succession, be discharged from its duties and
obligations as Collateral Agent, Custodial Agent or Securities Intermediary
hereunder. After any retiring Collateral Agent's, Custodial Agent's or
Securities Intermediary's resignation hereunder as Collateral Agent, Custodial
Agent or Securities Intermediary, the provisions of this Section 8.8, and
Section 8.6 hereof, shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Collateral
Agent, Custodial Agent or Securities Intermediary. Any resignation or removal of
the Collateral Agent hereunder shall be deemed for all purposes of this
Agreement as the simultaneous resignation or removal of the Custodial Agent and
the Securities Intermediary hereunder.
So long as it meets the requirements of this Section 8.8, any
corporation into which the Collateral Agent, the Custodial Agent or the
Securities Intermediary, in its individual capacity, may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Collateral Agent in its
individual capacity shall be a party, or any corporation to which substantially
all the corporate trust business of the Collateral Agent in its individual
capacity may be transferred, shall be the Collateral Agent, the Custodial Agent,
or the Securities Intermediary, as the case may be, respectively, under this
Agreement without further act.
SECTION 8.9 RIGHT TO APPOINT AGENT OR ADVISOR. The Collateral
Agent shall have the right to appoint agents or advisors in connection with any
of its duties hereunder, and the Collateral Agent shall not be liable for any
action taken or omitted by, or in reliance upon the advice of, such agents or
advisors reasonably selected in good faith. The appointment of agents (other
than legal counsel) pursuant to this Section 8.9 shall be subject to prior
written consent of the Company.
SECTION 8.10 SURVIVAL. The provisions of this Article VIII
shall survive termination of this Agreement and the resignation or removal of
the Collateral Agent, the Custodial Agent or the Securities Intermediary.
SECTION 8.11 EXCULPATION. Anything in this Agreement to the
contrary notwithstanding, in no event shall any of the Collateral Agent, the
Custodial Agent or the Securities Intermediary or their 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 or loss of business, relating to, arising from or in connection with
this Agreement, whether or not the likelihood of such loss or damage was known
to the Collateral Agent, the Custodial Agent or the Securities Intermediary, or
any of them, incurred without any act or deed that is found to be attributable
to negligence, bad faith or willful misconduct on the part of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.
23
ARTICLE IX
AMENDMENT
SECTION 9.1 AMENDMENT WITHOUT CONSENT OF HOLDERS. Without the
consent of any Holders or the holders of any Separate Notes, the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
for any of the following purposes:
(i) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company; or
(ii) to add covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company so long as such covenants or such surrender do not adversely
affect the validity, perfection or priority of the security interests
granted or created hereunder; or
(iii) to evidence and provide for the acceptance of
appointment hereunder by a successor Collateral Agent, Custodial
Agent, Securities Intermediary or Purchase Contract Agent; or
(iv) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such
provisions herein, or to make any other provisions with respect to
such matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
SECTION 9.2 AMENDMENT WITH CONSENT OF HOLDERS. With the
consent of the Holders of not less than a majority of the Purchase Contracts at
the time outstanding, by Act of said Holders delivered to the Company, the
Purchase Contract Agent or the Collateral Agent, as the case may be, the
Company, the Purchase Contract Agent, the Collateral Agent, the Custodial Agent
and the Securities Intermediary may amend this Agreement for the purpose of
modifying in any manner the provisions of this Agreement or the rights of the
Holders in respect of the Units; provided that no such amendment shall, as to
any Holder of an Outstanding Unit adversely affected thereby, without the
consent of such Holder,
(i) change the amount or type of Collateral underlying a Unit
(except for the rights of holders of Normal Units to substitute the
Treasury Securities for the Pledged Notes or the Pledged Treasury
Consideration, as the case may be, or the rights of Holders of
Stripped Units to substitute Notes or the Treasury Consideration, as
applicable, for the Pledged Treasury Securities), impair the right of
the Holder of any Unit to receive distributions on the underlying
Collateral or otherwise adversely affect the Holder's rights in or to
such Collateral; or
(ii) otherwise effect any action that would require the
consent of the Holder of each Outstanding Unit affected thereby
pursuant to the Purchase Contract Agreement if such action were
effected by an agreement supplemental thereto; or
24
(iii) reduce the percentage of Purchase Contracts the consent
of whose Holders is required for any such amendment;
provided that if any amendment or proposal referred to above would
adversely affect only the Normal Units or the Stripped Units, then only the
affected class of Holders as of the record date for the Holders entitled to vote
thereon will be entitled to vote on or consent to such amendment or proposal.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
SECTION 9.3 EXECUTION OF AMENDMENTS. In executing any
amendment permitted by this Article IX, the Collateral Agent, the Custodial
Agent, the Securities Intermediary and the Purchase Contract Agent shall be
entitled to receive and (subject to Section 8.1 hereof, with respect to the
Collateral Agent, and Section 7.1 of the Purchase Contract Agreement, with
respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent, if
any, to the execution and delivery of such amendment have been satisfied and, in
the case of an amendment pursuant to Section 9.1, that such amendment does not
adversely affect the validity, perfection or priority of the security interests
granted or created hereunder.
SECTION 9.4 EFFECT OF AMENDMENTS. Upon the execution of any
amendment under this Article IX, this Agreement shall be modified in accordance
therewith, and such amendment shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered under the
Purchase Contract Agreement shall be bound thereby.
SECTION 9.5 REFERENCE TO AMENDMENTS. Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Article IX may, and shall if
required by the Collateral Agent or the Purchase Contract Agent, bear a notation
in form approved by the Purchase Contract Agent and the Collateral Agent as to
any matter provided for in such amendment. If the Company shall so determine,
new Certificates so modified as to conform, in the opinion of the Collateral
Agent, the Purchase Contract Agent and the Company, to any such amendment may be
prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in accordance with the
Purchase Contract Agreement in exchange for outstanding Certificates.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 NO WAIVER. No failure on the part of any party
hereto or any of its agents to exercise, and no course of dealing with respect
to, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial
25
exercise by any party hereto or any of its agents of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
SECTION 10.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without
limiting the foregoing, the above choice of law is expressly agreed to by the
Securities Intermediary, the Collateral Agent, the Custodial Agent and the
Holders from time to time acting through the Purchase Contract Agent, as their
attorney-in-fact, in connection with the establishment and maintenance of the
Collateral Account, which law, for purposes of the Code, shall be deemed to be
the law governing all Security Entitlements related thereto. In addition, such
parties agree that, for purposes of the Code, New York shall be the Securities
Intermediary's jurisdiction. The Company, the Collateral Agent and the Holders
from time to time of the Units, acting through the Purchase Contract Agent as
their attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York state court sitting in the Borough of Manhattan in New York City for
the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Company, the Collateral
Agent and the Holders from time to time of the Units, acting through the
Purchase Contract Agent as their attorney-in-fact, irrevocably waive, to the
fullest extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum. The Company hereby designates and appoints CT
Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its
authorized agent upon which process may be served in any legal suit, action or
proceeding arising out of or relating to this Agreement which may be instituted
in any federal or state court in the Borough of Manhattan, The City of New York,
New York, and agrees that service of process upon such agent, and written notice
of said service to the Company by the Person serving the same, shall be deemed
in every respect effective service of process upon the Company in any such suit,
action or proceeding and further designates its domicile, the domicile of CT
Corporation System specified above and any domicile CT Corporation System may
have in the future as its domicile to receive any notice hereunder (including
service of process). If for any reason CT Corporation System (or any successor
agent for this purpose) shall cease to act as agent for service of process as
provided above, the Company will promptly appoint a successor agent for this
purpose reasonably acceptable to the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent. The Company agrees to
take any and all actions as may be necessary to maintain such designation and
appointment of such agent in full force and effect.
SECTION 10.3 JUDGMENT CURRENCY. The Company agrees, to the
fullest extent that it may effectively do so under applicable law, that (a) if
for the purpose of obtaining judgment in any court it is necessary to convert
the sum due (the "Required Currency") into a currency in which a judgment will
be rendered (the "Judgment Currency"), the rate of exchange used shall be the
rate at which in accordance with normal banking procedures the Purchase Contract
Agent could purchase in The City of New York the requisite amount of the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which a final unappealable judgment is given and (b) its
obligations under this Agreement to make payments in the Required Currency (i)
shall not be discharged or satisfied by any tender, or
26
any recovery pursuant to any judgment (whether or not entered in accordance with
clause (a)), in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the actual receipt, by the
payee, of the full amount of the Required Currency expressed to be payable in
respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Agreement. For purpose of the foregoing, "New York Banking Day" means any
day except a Saturday, Sunday or a legal holiday in The City of New York or a
day on which banking institutions in The City of New York are authorized or
obligated by law, regulation or executive order to be closed.
SECTION 10.4 NOTICES. Unless otherwise stated herein, all
notices, requests, instructions, 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) and, if sent to the Company, will be mailed,
delivered or telecopied to XX Xxxxx, Xxx Xxxxxxxxxx Xxxx, Xxxxxxxx XX00,
Xxxxxxx, Xxxxxxxxx: Xxxx X. Xxxxxxxx (fax no.: (000) 000-0000); or if sent to
the Purchase Contract Agent as attorney-in-fact of the Holders from time to time
of the Units, will be mailed, delivered or telefaxed to 000 Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: Xxxxxx Xxxxxxxxx (fax no.: (503)
000-0000); or if sent to the Collateral Agent, Custodial Agent and Securities
Intermediary, will be mailed, delivered or telefaxed to 000 Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: Xxxxxxxxx Xxxxxx (fax no.: (860)
000-0000), or as to any party, at such other address as shall be designated by
such party in a notice to the other parties. Except as otherwise provided in
this Agreement, all such communications shall be deemed to have been duly given
when personally delivered or, in the case of a mailed notice or notice
transmitted by telecopier, upon receipt, in each case given or addressed as
aforesaid.
SECTION 10.5 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Company, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent, and the Holders from time to time
of the Units, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.
SECTION 10.6 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 10.7 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.
27
SECTION 10.8 EXPENSES, ETC. The Company agrees to reimburse
the Collateral Agent, the Securities Intermediary and the Custodial Agent for:
(a) all reasonable out-of-pocket costs and all reasonable
expenses of the Collateral Agent, the Custodial Agent and the Securities
Intermediary (including, without limitation, the reasonable fees and expenses of
one counsel to the Collateral Agent, the Custodial Agent and the Securities
Intermediary), in connection with (i) the negotiation, preparation, execution
and delivery or performance of this Agreement and (ii) any modification,
supplement or waiver of any of the terms of this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent,
the Custodial Agent and the Securities Intermediary (including, without
limitation, reasonable fees and expenses of one counsel) in connection with (i)
any enforcement or proceedings resulting or incurred in connection with causing
any Holder of Units to satisfy its obligations under the Purchase Contracts
forming a part of the Units and (ii) the enforcement of this Section 10.7; and
(c) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any other document referred to herein and all
costs, expenses, taxes, assessments and other charges, if any, incurred in
connection with any filing, registration, recording or perfection of any
security interest to the extent contemplated hereby.
SECTION 10.9 SECURITY INTEREST ABSOLUTE. All rights of the
Collateral Agent and security interests hereunder, and all obligations of the
Holders from time to time hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any provision of
the Purchase Contracts or the Units or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or
any other term of, or any increase in the amount of, all or any of the
obligations of Holders of Units under the related Purchase Contracts, or any
other amendment or waiver of any term of, or any consent to any departure from
any requirement of, the Purchase Contract Agreement or any Purchase Contract or
any other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a pledgor.
SECTION 10.10 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES
AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY
TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 10.11 INCORPORATION BY REFERENCE. Each of the Company,
the Collateral Agent and the Securities Intermediary agrees that the Purchase
Contract Agent is, in
28
acting hereunder with respect to the Company, entitled to all rights,
privileges, benefits, protections, immunities and indemnities provided to it
under the Purchase Contract Agreement.
29
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
XL CAPITAL LTD
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President,
General Counsel and Secretary
U.S. BANK NATIONAL ASSOCIATION,
as Purchase Contract Agent and
as attorney-in-fact of the Holders
from time to time of the Units
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Collateral Agent, Custodial Agent and
Securities Intermediary
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
U.S. Bank Trust National Association
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Trust Administration
Re: 6.50% EQUITY SECURITY UNITS
OF XL CAPITAL LTD (THE "COMPANY")
We hereby notify you in accordance with Section [4.1] [4.2] of
the Pledge Agreement, dated as of March 23, 2004 (the "Pledge Agreement"), among
the Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Normal Units] [Stripped Units] from time to time, that the
holder of Units listed below (the "Holder") has elected to substitute [$________
aggregate principal amount of Treasury Securities (CUSIP No. 912820 BX 4)]
[$________ aggregate principal amount of Notes or $__________ aggregate
principal amount of Treasury Consideration (CUSIP No. ___________)] in exchange
for the related [Pledged Notes or Pledged Treasury Consideration] [Pledged
Treasury Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Notes or the Treasury Consideration] to you, as Collateral Agent.
We hereby instruct you, upon receipt of such [Pledged Treasury Securities]
[Pledged Notes or Pledged Treasury Consideration], to release the [Notes or the
Treasury Consideration] [Treasury Securities] related to such [Normal Units]
[Stripped Units] to us in accordance with the Holder's instructions. Capitalized
terms used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Date: _____________________
U.S. Bank National Association,
as Purchase Contract Agent
By: ___________________________________
Name:
Title:
A-1
Please print name and address of Registered Holder electing to
substitute [Treasury Securities] [Notes or Treasury Consideration] for the
[Pledged Notes or the Pledged Treasury Consideration] [Pledged Treasury
Securities]:
Name:
Social Security or other Taxpayer
Identification Number, if any:
Address:
A-2
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
U.S. Bank National Association,
as Purchase Contract Agent
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Institutional Trust Services
Re: 6.50% EQUITY SECURITY UNITS
OF XL CAPITAL LTD (THE "COMPANY")
The undersigned Holder hereby notifies you that it has
delivered to U.S. Bank Trust National Association, as Collateral Agent,
[$_________ aggregate principal amount of Treasury Securities (CUSIP No. 912820
BX 4)] [$_________ aggregate principal amount of Notes or $___________ principal
amount of Treasury Consideration (CUSIP No. _________)] in exchange for the
related [Pledged Notes or Pledged Treasury Consideration] [Pledged Treasury
Securities] held by the Collateral Agent, in accordance with Section [4.1][4.2]
of the Pledge Agreement, dated as of March 23, 2004 (the "Pledge Agreement"),
between you, the Company and the Collateral Agent. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Notes or the Pledged Treasury Consideration]
[Pledged Treasury Securities] related to such [Normal Units] [Stripped Units].
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date: ___________________
Signature: _______________________________________
Signature Guarantee: _____________________________
Please print name and address of Registered Holder:
Name:
Social Security or other Taxpayer
Identification Number, if any:
Address:
B-1
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
U.S. Bank Trust National Association
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Trust Administration
Re: NOTES OF XL CAPITAL LTD
The undersigned hereby notifies you in accordance with Section
4.5(d) of the Pledge Agreement, dated as of March 23, 2004 (the "Pledge
Agreement"), among XL Capital Ltd, yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent, and U.S. Bank National Association, as
Purchase Contract Agent and as attorney-in-fact for the Holders of Normal Units
and Stripped Units from time to time, that the undersigned elects to deliver on
the fourth Business Day immediately preceding the Remarketing Date commencing on
____________, 2007 $__________ aggregate principal amount of Notes for delivery
to the Remarketing Agent for remarketing pursuant to Section 4.5(d) of the
Pledge Agreement. The undersigned will, upon request of the Remarketing Agent,
execute and deliver any additional documents deemed by the Remarketing Agent or
by the Company to be necessary or desirable to complete the sale, assignment and
transfer of the Notes tendered hereby.
The undersigned hereby instructs you, upon receipt of the
proceeds of such remarketing from the Remarketing Agent, net of amounts payable
to the Remarketing Agent in accordance with the Pledge Agreement, to deliver
such proceeds to the undersigned in accordance with the instructions indicated
herein under "A. Payment Instructions." The undersigned hereby instructs you, in
the event of the Last Failed Remarketing upon receipt of the Notes tendered
herewith from the Remarketing Agent, to deliver such Notes to the person(s) and
the address(es) indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and
warrants that the undersigned has full power and authority to tender, sell,
assign and transfer the Notes tendered hereby and that the undersigned is the
record owner of any Notes tendered herewith in physical form or a participant in
The Depository Trust Company ("DTC") and the beneficial owner of any Notes
tendered herewith by book-entry transfer to your account at DTC and (ii) agrees
to be bound by the terms and conditions of Section 4.5(d) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
C-1
Date: _________________
Signature: _______________________________
Signature Guarantee: ______________________
Name: __________________________________
(Please Print)
Address: __________________________________
(Please Print)
Zip Code:
Country:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Tax Identification or Social Security Number):
A. PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
Name(s): __________________________________
(Please Print)
Address: __________________________________
(Please Print)
Zip Code:
Country:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Special Identification or Social Security Number):
B. DELIVERY INSTRUCTIONS
In the event of the Last Failed Remarketing, Notes which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.
C-2
Name(s): __________________________________
(Please Print)
Address: __________________________________
(Please Print)
Zip Code:
Country:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Special Identification or Social Security Number):
In the event of [a/the Last] Failed Remarketing, Notes which are in book-entry
form should be credited to the account at The Depository Trust Company set forth
below.
Name of Account Party:
DTC Account Number:
C-3
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
U.S. Bank Trust National Association
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Trust Administration
Re: NOTES OF XL CAPITAL LTD
The undersigned hereby notifies you in accordance with Section
4.5(d) of Pledge Agreement, dated as of March 23, 2004 (the "Pledge Agreement"),
among XL Capital Ltd, yourselves, as Collateral Agent, Securities Intermediary
and Custodial Agent, and U.S. Bank National Association, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Normal Units and Stripped Units
from time to time, that the undersigned elects to withdraw the $__________
aggregate principal amount of Notes delivered to the Custodial Agent on
_________, 2007 for remarketing pursuant to Section 4.5(d) of the Pledge
Agreement. The undersigned hereby instructs you to return such Notes to the
undersigned in accordance with the undersigned's instructions. With this notice,
undersigned hereby agrees to be bound by the terms and conditions 4.5(d) of the
Pledge Agreement. Capitalized terms used herein but shall have the meaning set
forth in the Pledge Agreement.
Date: _________________
Signature: _______________________________
Signature Guarantee: ______________________
Name: __________________________________
(Please Print)
Address: __________________________________
(Please Print)
Zip Code:
Country:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Tax Identification or Social Security Number):
D-1
A. DELIVERY INSTRUCTIONS
In the event of [a/the Last] Failed Remarketing, Notes which are in physical
form should be delivered to the person(s) set forth below and mailed to the
address set forth below.
Name: __________________________________
(Please Print)
Address: __________________________________
(Please Print)
Zip Code:
Country:
Telecopy (include country code if outside U.S.):
Telephone (include country code if outside U.S.):
(Tax Identification or Social Security Number):
In the event of [a/the Last] Failed Remarketing, Notes which are in book-entry
form should be credited to the account at The Depository Trust Company set forth
below.
Name of Account Party:
DTC Account Number:
D-2
