EXHIBIT 4(i)
FORM OF PLEDGE AGREEMENT
TXU CORP.
--------------,
as Collateral Agent, Custodial Agent
and Securities Intermediary
AND
----------------,
as Purchase Contract Agent
FORM OF PLEDGE AGREEMENT
Dated as of _________ __, ______
TABLE OF CONTENTS
Page
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RECITALS......................................................................1
SECTION 1. Definitions.......................................................2
SECTION 2. Pledge; Control and Perfection....................................5
SECTION 2.1. The Pledge....................................................5
SECTION 2.2. Control and Perfection........................................6
SECTION 3. Distributions on Pledged Collateral...............................8
SECTION 4. Substitution, Release, Repledge and Settlement of
Debt Securities...................................................9
SECTION 4.1. Substitution for Debt Securities and the Creation of
Type B Securities.............................................9
SECTION 4.2. Substitution of Treasury Securities and the Creation of
Type A Securities............................................10
SECTION 4.3. Termination Event............................................10
SECTION 4.4. Cash Settlement..............................................11
SECTION 4.5. Early Settlement.............................................12
SECTION 4.6. Application of Proceeds Settlement...........................13
SECTION 5. Voting Rights -- Debt Securities.................................14
SECTION 6. Rights and Remedies; Distribution of the Debentures; Tax
Event Redemption.................................................15
SECTION 6.1. Rights and Remedies of the Collateral Agent..................15
SECTION 6.2. Tax Event Redemption.........................................16
SECTION 7. Representations and Warranties; Covenants........................17
SECTION 7.1. Representations and Warranties...............................17
SECTION 7.2. Covenants....................................................18
SECTION 8. The Collateral Agent.............................................18
SECTION 8.1. Appointment, Powers and Immunities...........................18
SECTION 8.2. Instructions of the Company..................................19
SECTION 8.3. Reliance by Collateral Agent.................................19
SECTION 8.4. Rights in Other Capacities...................................20
SECTION 8.5. Non-Reliance on Collateral Agent.............................20
SECTION 8.6. Compensation and Indemnity...................................20
SECTION 8.7. Failure to Act...............................................21
SECTION 8.8. Resignation of Collateral Agent..............................21
SECTION 8.9. Right to Appoint Agent or Advisor............................22
SECTION 8.10. Survival....................................................22
SECTION 8.11. Exculpation.................................................22
SECTION 9. Amendment........................................................23
SECTION 9.1. Amendment Without Consent of Holders.........................23
SECTION 9.2. Amendment with Consent of Holders............................23
SECTION 9.3. Execution of Amendments......................................24
SECTION 9.4. Effect of Amendments.........................................24
SECTION 9.5. Reference to Amendments......................................24
SECTION 10. Miscellaneous...................................................24
SECTION 10.1. No Waiver...................................................24
SECTION 10.2. Governing Law...............................................25
SECTION 10.3. Notices.....................................................25
SECTION 10.4. Successors and Assigns......................................25
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SECTION 10.5. Counterparts................................................26
SECTION 10.6. Severability................................................26
SECTION 10.7. Expenses, etc...............................................26
SECTION 10.8. Security Interest Absolute..................................26
EXHIBIT A Instruction 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
FORM OF PLEDGE AGREEMENT, dated as of _________, ________ (this
"Agreement"), among TXU Corp., a Texas corporation (the "Company"), ___________,
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 in its capacity as a "securities intermediary" as defined in Section
8-102(a)(14) of the Code (as defined herein) (in such capacity, together with
its successors in such capacity, the "Securities Intermediary"), and
___________, not individually but solely as purchase contract agent and as
attorney-in-fact of the Holders (as defined in the Purchase Contract Agreement)
from time to time of the Securities (as hereinafter defined) (in such capacity,
together with its successors in such capacity, the "Purchase Contract Agent")
under the Purchase Contract Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued up to __________ New
Securities of the Company, having a stated amount of $____ (the "Stated Amount")
per New Security.
The New Securities will initially consist of (A) _______ units
(referred to as "Type A Securities") with a face amount, per Type A Security,
equal to the Stated Amount and (B) _________ units (referred to as "Type B
Securities" and, together with the Type A Securities, the "Securities") with a
face amount, per Type B Security, equal to the Stated Amount. Each Type A
Security will initially be comprised of (a) a stock purchase contract (a
"Purchase Contract") under which the holder will purchase from the Company on
_________ (the "Purchase Contract Settlement Date"), for an amount of cash equal
to the Stated Amount, a number of newly issued shares of common stock, no par
value per share (the "Common Stock"), of the Company equal to the Settlement
Rate (as defined below) and (b) either beneficial ownership of a Debt Security
(as defined below) or upon the occurrence of a Tax Event Redemption the
Applicable Ownership Interest in the Treasury Portfolio. Each Type B Security
will initially be comprised of (a) a Purchase Contract under which (i) the
holder will purchase from the Company on the Purchase Contract Settlement Date,
for an amount in cash equal to the Stated Amount, a number of newly issued
shares of Common Stock of the Company, equal to the Settlement Rate, and (ii)
the Company will pay the Holder Contract Adjustment Payments (as defined below)
at the rate of __% of the Stated Amount per annum, and (b) a [1/100] undivided
beneficial interest in a zero-coupon U.S. Treasury Security (CUSIP No. ________)
having a principal amount equal to [$1,000] and maturing on ________ (the
"Treasury Securities").
Pursuant to the terms of the Indenture (as defined below), the Company
will issue _____ __% Series ___ Senior Notes due _______ (the "Debt Securities")
in an aggregate principal amount equal to the aggregate Stated Amount of all
Type A Securities.
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Debt Securities, any
Applicable Ownership Interest in the Treasury Portfolio and any Treasury
Securities to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof. Upon such pledge,
the Debt Securities will be beneficially owned by the Holders but will be owned
of record by the Purchase Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own
behalf and as attorney-in-fact of the Holders from time to time of the
Securities, agree as follows:
SECTION 1. DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(b) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(c) terms not otherwise defined herein are used herein with the
meanings ascribed to them in the Purchase Contract Agreement.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State of
New York) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
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"Collateral Account" means the securities account (number _____)
maintained at _____________ in the name "___________, as Purchase Contract Agent
on behalf of the holders of Securities subject to the security interest of the
Pledge Agreement, of __________ as Collateral Agent, for the benefit of TXU
Corp., as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this instrument.
"Common Stock" has the meaning specified in the Recitals.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Custodial Agent" has the meaning specified in the first paragraph of
this Agreement.
"Debt Securities" has the meaning specified in the Recitals.
"Indenture" means the Indenture, dated __________, between the Company
and the Trustee under which the Debt Securities are to be issued.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Permitted Investments" means any one of the following which shall
mature not later than the next succeeding Business Day (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US $200 million at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which commercial paper has a
rating at the time of purchase at least equal to "A-1" by Standard & Poor's
Ratings Services ("S&P") or at least equal to "P-1" by Xxxxx'x Investors
Service, Inc. ("Moody's"); and (v) investments in money market funds registered
under the Investment Company Act of 1940, as amended, rated in the highest
applicable rating category by S&P or Moody's.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
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"Pledged Debt Securities" has the meaning specified in Section 2.1
hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, collection or disposition of the Collateral or any
proceeds thereof.
"Purchase Contract" has the meaning specified in the Recitals.
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the
Recitals.
"Remaining Stated Amount" means $_____.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section
8-102(a)(17) of the Code.
"Separate Debt Securities" means any Debt Securities that are not
Pledged Debt Securities.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance
with the instructions of the Collateral Agent, the Purchase Contract Agent or
the Holder, as applicable:
(i) except as otherwise provided in Section 2.1 hereof, in the case
of Collateral consisting of securities which cannot be delivered
by book-entry or which the parties agree are to be delivered in
physical form, delivery in appropriate physical form to the
recipient accompanied by any duly executed instruments of
transfer, assignments in blank, transfer tax stamps and any other
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documents necessary to constitute a legally valid transfer to the
recipient;
(ii) in the case of Collateral consisting of securities maintained in
book-entry form by causing a "securities intermediary" (as
defined in Section 8-102(a)(14) of the Code) to (i) credit a
"security entitlement" (as defined in Section 8-102(a)(17) of the
Code) with respect to such securities to a "securities account"
(as defined in Section 8-501(a) of the Code) maintained by or on
behalf of the recipient and (ii) to issue a confirmation to the
recipient with respect to such credit. In the case of Collateral
to be delivered to the Collateral Agent, the securities
intermediary shall be the Securities Intermediary and the
securities account shall be the Collateral Account.
"Treasury Security" means a zero-coupon U.S. Treasury Security (Cusip
Number ________) which are the principal strips of the U.S. Treasury Securities
which mature on _____ .
"Trustee" means ____________, as trustee under the Indenture until a
successor is appointed thereunder, and thereafter means such successor trustee.
"Value" with respect to any item of Collateral on any date means, as
to (i) Debt Securities, the aggregate principal amount thereof, (ii) Cash, the
face amount thereof and (iii) Treasury Securities, the aggregate principal
amount thereof at maturity.
SECTION 2. PLEDGE; CONTROL AND PERFECTION.
SECTION 2.1. THE PLEDGE.
The Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, and the Purchase Contract Agent, as such
attorney-in-fact, hereby pledge and grant to the Collateral Agent, for the
benefit of the Company, as collateral security for the performance when due by
such Holders of their respective obligations under the related Purchase
Contracts, a security interest in (i) all of the right, title and interest of
such Holders and the Purchase Contract Agent (a) in the Debt Securities and
Treasury Securities constituting a part of the Securities and any Treasury
Securities delivered in exchange for any Debt Securities, and any Debt
Securities delivered in exchange for any Treasury Securities, in accordance with
Section 4 hereof, in each case that have been Transferred to or received by the
Collateral Agent and not released by the Collateral Agent to such Holders under
the provisions of this Agreement; (b) in payments made by Holders pursuant to
Section 4.4; (c) in the Collateral Account and all securities, financial assets,
Cash and other property credited thereto and all Security Entitlements related
thereto; (d) in the Treasury Portfolio purchased on behalf of the Holders of
Type A Securities by the Collateral Agent upon the occurrence of a Tax Event
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Redemption as provided in Section 6.2 and (e) all Proceeds of the foregoing (all
of the foregoing, collectively, the "Collateral"). Prior to or concurrently with
the execution and delivery of this Agreement, the Purchase Contract Agent, on
behalf of the initial Holders of the Securities, shall cause the Debt Securities
comprising a part of the Type A Securities, and the Treasury Securities
comprising a part of the Type B Securities, to be Transferred to the Collateral
Agent for the benefit of the Company. Such Debt Securities shall be Transferred
by physically delivering such Debt Securities to Collateral Agent endorsed in
blank. Treasury Securities and the Treasury Portfolio, as applicable, shall be
Transferred to the Collateral Account maintained by the Collateral Agent at the
Securities Intermediary by book-entry transfer to the Collateral Account in
accordance with the TRADES Regulations and other applicable law and by the
notation by the Securities Intermediary on its books that a Security Entitlement
with respect to such Treasury Securities or Treasury Portfolio, has been
credited to the Collateral Account. For purposes of perfecting the Pledge under
applicable law, including, to the extent applicable, the TRADES Regulations or
the Uniform Commercial Code as adopted and in effect in any applicable
jurisdiction, the Collateral Agent shall be the agent of the Company as provided
herein. The pledge provided in this Section 2.1 is herein referred to as the
"Pledge" and the Debt Securities, Treasury Securities or Treasury Portfolio
subject to the Pledge, excluding any Debt Securities or Treasury Securities or
interest in the Treasury Portfolio released from the Pledge as provided in
Section 4 hereof, are hereinafter referred to as "Pledged Debt Securities", the
"Pledged Treasury Securities," or "Pledged Applicable Ownership Interest in the
Treasury Portfolio," respectively, and collectively, the "Pledged Securities."
Subject to the Pledge and the provisions of Section 2.2 hereof, the Holders from
time to time shall have full beneficial ownership of the Collateral. The
Collateral Agent shall have the right to have the Debt Securities or any other
Securities held in physical form.
Except as may be required in order to release Debt Securities (or if a
Tax Event Redemption has occurred, the Applicable Ownership Interest in the
Treasury Portfolio) or Treasury Securties in connection with a Holder's election
to convert its investment from Type A Securities to Type B Securities, as the
case may be, or except as otherwise required to release Pledged Securities as
specified herein, neither the Collateral Agent nor the Securities Intermediary
shall relinquish physical possession of any certificate evidencing Debt
Securities (or if a Tax Event Redemption has occurred, the Applicable Ownership
Interest in the Treasury Portfolio) or Treasury Securities prior to the
termination of this Agreement. If it becomes necessary for the Collateral Agent
to relinquish physical possession of a certificate in order to release a portion
of the Debt Securities evidenced thereby from the Pledge, the Collateral Agent
shall use its best efforts to obtain physical possession of a replacement
certificate evidencing any Debt Securities remaining subject to the Pledge
hereunder registered to it or endorsed in blank within ten days of the date it
relinquished possession. The Collateral Agent shall promptly notify the Company
of its failure to obtain possession of any such replacement certificate as
required hereby.
SECTION 2.2. CONTROL AND PERFECTION.
(a) In connection with the Pledge granted in Section 2.1, and subject
to the other provisions of this Agreement, the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, hereby authorize
and direct the Securities Intermediary (without the necessity of obtaining the
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further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent on behalf of the Company may give in writing with respect to
the Collateral Account, the Collateral credited thereto and any security
entitlements with respect to any thereof. Such instructions and entitlement
orders may, without limitation, direct the Securities Intermediary to transfer,
redeem, sell, liquidate, assign, deliver or otherwise dispose of the Debt
Securities, the Treasury Securities, the Treasury Portfolio, and any Security
Entitlements with respect thereto and to pay and deliver any income, proceeds or
other funds derived therefrom to the Company. The Purchase Contract Agent and
the Holders from time to time, acting through the Purchase Contract Agent, each
hereby further authorize and direct the Collateral Agent, as Agent of the
Company, to itself issue instructions and entitlement orders, and to otherwise
take action, with respect to the Collateral Account, the Collateral credited
thereto and any security entitlements with respect thereto, pursuant to the
terms and provisions hereof, all without the necessity of obtaining the further
consent of the Purchase Contract Agent or any of the Holders. The Collateral
Agent shall be the Agent of the Company and shall act as directed in writing by
the Company. Without limiting the generality of the foregoing, the Collateral
Agent shall issue entitlement orders to the Securities Intermediary when and as
directed by the Company.
(b) The Securities Intermediary hereby confirms and agrees that: (i)
all securities or other property underlying any financial assets credited to the
Collateral Account shall be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in blank or credited to
another Collateral Account maintained in the name of the Securities Intermediary
and in no case will any financial asset credited to the Collateral Account be
registered in the name of the Purchase Contract Agent, the Company or any
Holder, payable to the order of, or specially indorsed to, the Purchase Contract
Agent, the Collateral Agent, the Company or any Holder except to the extent the
foregoing have been specially indorsed to the Securities Intermediary or in
blank; (ii) all property delivered to the Securities Intermediary pursuant to
this Pledge Agreement (including, without limitation, any Debt Securities, the
Treasury Portfolio or Treasury Securities) will be promptly credited to the
Collateral Account; (iii) the Collateral Account is an account to which
financial assets are or may be credited, and the Securities Intermediary shall,
subject to the terms of this Agreement, treat the Purchase Contract Agent as
entitled to exercise the rights of any financial asset credited to the
Collateral Account; (iv) the Securities Intermediary has not entered into, and
until the termination of the this Agreement will not enter into, any agreement
with any other Person relating to the Collateral Account and/or any financial
assets credited thereto pursuant to which it has agreed to comply with
entitlement orders (as defined in Section 8-102(a)(8) of the Code) of such other
Person; and (v) the Securities Intermediary has not entered into, and until the
termination of this Agreement will not enter into, any agreement with the
Company, the Collateral Agent or the Purchase Contract Agent purporting to limit
or condition the obligation of the Securities Intermediary to comply with
entitlement orders as set forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item of
property (whether investment property, financial asset, security, instrument or
cash) credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
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(d) In the event of any conflict between this Agreement (or any
portion thereof) and any other agreement now existing or hereafter entered into,
the terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, and each of them severally, with
full power of substitution, as the Purchase Contract Agent's attorney-in-fact to
take on behalf of, and in the name, place and stead of the Purchase Contract
Agent and the Holders, any action necessary or desirable to perfect and to keep
perfected the security interest in the Collateral referred to in Section 2.1.
The grant of such power-of-attorney shall not be deemed to require of the
Collateral Agent any specific duties or obligations not otherwise assumed by the
Collateral Agent hereunder.
SECTION 3. DISTRIBUTIONS ON PLEDGED COLLATERAL.
So long as the Purchase Contract Agent is the registered owner of the
Pledged Debt Securities, it shall receive all payments thereon. If the Pledged
Debt Securities are reregistered, such that the Collateral Agent becomes the
registered holder, all payments of principal or interest on such Pledged Debt
Securities, together with any payments of principal or interest or cash
distributions in respect of any other Pledged Securities received by the
Collateral Agent that are properly payable hereunder shall be paid by the
Collateral Agent by wire transfer in same day funds:
(i) In the case of (A) payment of interest with respect to the
Pledged Debt Securities or cash distributions on the appropriate
Applicable Ownership Interest (as specified in clause ___________
of the definition of such term) in the Treasury Portfolio, as the
case may be, and (B) any payments of principal with respect to
any Debt Securities or the appropriate Applicable Ownership
Interest (as specified in clause _______ of the definition of
such term) in the Treasury Portfolio, as the case may be, that
have been released from the Pledge pursuant to Section 4.3
hereof, to the Purchase Contract Agent, for the benefit of the
relevant Holders of Type A Securities, to the account designated
by the Purchase Contract Agent for such purpose, no later than
2:00 p.m., New York City time, on the Business Day such payment
is received by the Collateral Agent (provided that in the event
such payment is received by the Collateral Agent on a day that is
not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30
a.m., New York City time, on the next succeeding Business Day);
(ii) In the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge
pursuant to Section 4.3 hereof, to the Holders of the Type B
Securities to the accounts designated by them in writing for such
purpose no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral Agent
(provided that in the event such payment is received by the
Collateral Agent on a day that is not a Business Day or after
12:30 p.m., New York City time, on a Business Day, then such
payment shall be made no later than 10:30 a.m., New York City
time, on the next succeeding Business Day); and
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(iii) In the case of payments of the principal of any Pledged Debt
Securities or on the appropriate Applicable Ownership Interest
(as specified in clause ________ of the definition of such term)
in the Treasury Portfolio, as the case may be, or the principal
of any Pledged Treasury Securities, to the Company on the
Purchase Contract Settlement Date in accordance with the
procedure set forth in Section 4.6(a) or 4.6(b) hereof, in full
satisfaction of the respective obligations of the Holders under
the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein shall be
applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the principal on account of any
Debt Security or, if applicable, the appropriate Applicable Ownership Interest
(as specified in clause _________ of the definition of such term) that, at the
time of such payment, is a Pledged Debt Security or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, or a Holder of
a Type B Securities shall receive any payments of principal on account of any
Treasury Securities that, at the time of such payment, are Pledged Treasury
Securities, the Purchase Contract Agent or such Holder shall, as the case may
be, shall transfer the Proceeds of such payment of principal on such Pledged
Debt Security, appropriate Applicable Ownership Interest in the Treasury
Portfolio so pledged, or Pledged Treasury Securities, as the case may be, to the
Collateral Agent and the Collateral Agent shall hold such Proceeds for the
benefit of the Company as Collateral Security for the Performance when due by
such Holder of its obligations under the related Purchase Contracts.
SECTION 4. SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF DEBT
SECURITIES.
SECTION 4.1. SUBSTITUTION FOR DEBT SECURITIES AND THE CREATION OF TYPE
B SECURITIES.
At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (unless a Tax Event Redemption
has occurred), a Holder of Type A Securities shall have the right to substitute
Treasury Securities for the Pledged Debt Securities securing such Holder's
obligations under the Purchase Contract(s) comprising a part of its Type A
Securities in integral multiples of 100 by (a) Transferring to the Collateral
Agent Treasury Securities having a Value equal to the aggregate Stated Amount of
the Pledged Debt Securities to be released and (b)(i) in the event that Contract
Adjustment Payments are at a higher rate for Type B Securities than for Type A
Securities, delivering to the Purchase Contract Agent Cash in an amount equal to
the excess of the Contract Adjustment Payments that would have accrued since the
last Payment Date through the date of substitution on the Type B Securities
being created by the Holder, over the Contract Adjustment Payments that have
accrued over the same time period on the related Type A Securities, which amount
the Purchase Contract Agent shall promptly remit to the Company, and (ii)
delivering the related Type A Securities to the Purchase Contract Agent,
accompanied by a notice, substantially in the form of Exhibit B hereto, to the
Purchase Contract Agent stating that such Holder has Transferred Treasury
Securities to the Collateral Agent pursuant to clause (a) above (stating the
Value of the Treasury Securities Transferred by such Holder) and requesting that
the Purchase Contract Agent instruct the Collateral Agent to release from the
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Pledge the Pledged Debt Securities related to such Type A Securities. The
Purchase Contract Agent shall instruct the Collateral Agent in the form provided
in Exhibit A; provided, however, that if a Tax Event Redemption has occurred and
the Treasury Portfolio has become a component of the Type A Securities, Holders
of Type A Securities may make such substitution only in integral multiples of
______ at any time on or prior to the second Business Day immediately preceding
the Purchase Contract Settlement Date. Upon receipt of Treasury Securities from
a Holder of and the related instruction from the Purchase Contract Agent, the
Collateral Agent shall release the Pledged Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and
shall promptly Transfer such Pledged Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
free and clear of any lien, pledge or security interest created hereby, to the
Purchase Contract Agent.
SECTION 4.2. SUBSTITUTION OF TREASURY SECURITIES AND THE CREATION OF
TYPE A SECURITIES.
At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (unless a Tax Event Redemption
has occurred), a Holder of Type B Securities shall have the right to establish
or reestablish Type A Securities consisting of the Purchase Contracts and Debt
Securities in integral multiples of 100 Type A Securities by (a) Transferring to
the Collateral Agent Debt Securities having a Value equal to the Value of the
Pledged Treasury Securities to be released and (b) delivering the related Type B
Securities to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of Exhibit B hereto, to the Purchase Contract Agent
stating that such Holder has transferred Debt Securities to the Collateral Agent
pursuant to clause (a) above and requesting that the Purchase Contract Agent
instruct the Collateral Agent to release from the Pledge the Pledged Treasury
Securities related to such Type B Securities. The Purchase Contract Agent shall
instruct the Collateral Agent in the form provided in Exhibit A; provided,
however, that if a Tax Event Redemption has occurred and the Treasury Portfolio
has become a component of the Type A Securities, Holders of Type B Securities
may make such substitution only in integral multiples of ______ Type B
Securities, at any time on or prior to the Business Day immediately preceding
the Purchase Contract Settlement Date. Upon receipt of the Debt Securities or
the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, from such Holder and the instruction from the Purchase Contract
Agent, the Collateral Agent shall release the Treasury Securities and shall
promptly Transfer such Treasury Securities, free and clear of any lien, pledge
or security interest created hereby, to the Purchase Contract Agent.
SECTION 4.3. TERMINATION EVENT.
Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from the Pledge and
shall promptly Transfer any Pledged Debt Securities (or the Applicable Ownership
Interest in the Treasury Portfolio if a Tax Event Redemption has occurred) and
Pledged Treasury Securities to the Purchase Contract Agent for the benefit of
the Holders of the Type A Securities and the Type B Securities, respectively,
free and clear of any lien, pledge or security interest or other interest
created hereby.
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If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged Debt
Securities, the Treasury Portfolio or of the Pledged Treasury Securities, as the
case may be, as provided by this Section 4.3, any Holder may, and the Purchase
Contract Agent shall, upon receipt from the Holders of reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by
the Purchase Contract Agent in compliance with this paragraph, (i) use its
reasonable best efforts to obtain an opinion of a nationally recognized law firm
reasonably acceptable to the Collateral Agent to the effect that, as a result of
the Company's being the debtor in such a bankruptcy case, the Collateral Agent
will not be prohibited from releasing or Transferring the Collateral as provided
in this Section 4.3, and shall deliver such opinion to the Collateral Agent
within ten days after the occurrence of such Termination Event, and if (y) any
such Holder or the Purchase Contract Agent shall be unable to obtain such
opinion within ten days after the occurrence of such Termination Event or (z)
the Collateral Agent shall continue, after delivery of such opinion, to refuse
to effectuate the release and Transfer of all Pledged Debt Securities, the
Treasury Portfolio or the Pledged Treasury Securities, as the case may be, as
provided in this Section 4.3, then any Holder may, and the Purchase Contract
Agent shall within fifteen days after the occurrence of such Termination Event
commence an action or proceeding in the court with jurisdiction of the Company's
case under the Bankruptcy Code seeking an order requiring the Collateral Agent
to effectuate the release and transfer of all Pledged Debt Securities, the
Treasury Portfolio or of the Pledged Treasury Securities, as the case may be, as
provided by this Section 4.3 or (ii) commence an action or proceeding in the
court with jurisdiction of the Company's case under the Bankruptcy Code like
that described in subsection (i)(z) hereof within ten days after the occurrence
of such Termination Event.
SECTION 4.4. CASH SETTLEMENT.
(a) Upon receipt by the Collateral Agent of (i) a notice from the
Purchase Contract Agent promptly after the receipt by the Purchase Contract
Agent of such notice that a Holder of an Type A Securities or Type B Securities
has elected, in accordance with the procedures specified in Section 5.4(a)(i) or
(d)(i) of the Purchase Contract Agreement, respectively, to settle its Purchase
Contract with Cash and (ii) payment by such Holder on or prior to 11:00 a.m.,
New York City time, on the Business Day immediately preceding the Purchase
Contract Settlement Date in lawful money of the United States by certified or
cashiers' check or wire transfer in immediately available funds payable to or
upon the order of the Company, then the Collateral Agent shall, promptly invest
any Cash received from a Holder in connection with a Cash Settlement in
Permitted Investments. Upon receipt of the proceeds upon the maturity of the
Permitted Investments on the Purchase Contract Settlement Date, the Collateral
Agent shall pay the portion of such proceeds and deliver any certified or
cashiers' checks received, in an aggregate amount equal to the Purchase Price,
to the Company on the Purchase Contract Settlement Date, and shall distribute
any funds in respect of the interest earned from the Permitted Investments to
the Purchase Contract Agent for payment to the relevant Holders.
(b) If a Holder of Type A Securities fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
Section 5.4(a)(i) of the Purchase Contract Agreement, such failure shall
constitute an event of default under the Purchase Contract Agreement and
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hereunder, and the Holder shall be deemed to have consented to the disposition
of the pledged Debt Securities pursuant to the remarketing as described in
Section 5.4(b) of the Purchase Contract Agreement, which is incorporated herein
by reference. If a Holder of Type A Securities does notify the Agent as provided
in Section 5.4(a)(i) of the Purchase Contract Agreement of its intention to make
a Cash Settlement, but fails to make such payment as required by Section
5.4(a)(ii) of the Purchase Contract Agreement, the Debt Securities of such a
Holder will not be remarketed but instead the Collateral Agent, for the benefit
of the Company, will exercise its rights as a secured party with respect to such
Debt Securities at the direction of the Company to retain or dispose of the
Collateral in accordance with applicable law. In addition, in the event of a
Failed Remarketing as described in Section 5.4(b) of the Purchase Contract
Agreement, such Failed Remarketing shall constitute an event of default
hereunder by such Holder and the Collateral Agent, for the benefit of the
Company, will also exercise its rights as a secured party with respect to such
Debt Securities at the direction of the Company to retain or dispose of the
Collateral in accordance with applicable law.
(c) If a Holder of a Type B Securities fails to notify the Purchase
Contract Agent of such Holder's intention to make a Cash Settlement in
accordance with Section 5.4(d)(i) of the Purchase Contract Agreement, or if a
Holder of a Type B Securities does notify the Agent as provided in paragraph
5.4(d)(i) of the Purchase Contract Agreement of its intention to make a Cash
Settlement, but fails to make such payment as required by paragraph 5.4(d)(ii)
of the Purchase Contract Agreement, such failure shall constitute an event of
default hereunder by such Holder and upon the maturity of any Pledged Treasury
Securities or the Treasury Portfolio, if any, held by the Collateral Agent on
the Business Day immediately preceding the Purchase Contract Settlement Date,
the principal amount of the Pledged Treasury Securities or the Treasury
Portfolio received by the Collateral Agent shall, upon written direction of the
Company, be invested promptly in Permitted Investments. On the Purchase Contract
Settlement Date, an amount equal to the Purchase Price will be remitted to the
Company as payment thereof. In the event the sum of the proceeds from the
related Pledged Treasury Securities or the Treasury Portfolio, as the case may
be, and the investment earnings earned from such investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being settled thereby, the
Collateral Agent will distribute such excess to the Purchase Contract Agent for
the benefit of the Holder of the related Type B Securities or Type A Securities
when received.
SECTION 4.5. EARLY SETTLEMENT.
Upon written notice to the Collateral Agent by the Purchase Contract
Agent that one or more Holders of Securities have elected to effect Early
Settlement of their respective obligations under the Purchase Contracts forming
a part of such Securities in accordance with the terms of the Purchase Contracts
and the Purchase Contract Agreement (setting forth the number of such Purchase
Contracts as to which such Holders have elected to effect Early Settlement), and
that the Purchase Contract Agent has received from such Holders, and paid to the
Company as confirmed in writing by the Company, the related Early Settlement
Amounts pursuant to the terms of the Purchase Contracts and the Purchase
Contract Agreement and that all conditions to such Early Settlement have been
satisfied, then the Collateral Agent shall release from the Pledge, (a) Pledged
Debt Securities or the appropriate Applicable Ownership Interest in the Treasury
Portfolio in the case of a Holder of Type A Securities or (b) Pledged Treasury
Securities in the case of a Holder of Type B Securities in each case with a
principal amount equal to the product of (i) the Stated Amount times (ii) the
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number of such Purchase Contracts as to which such Holders have elected to
effect Early Settlement and shall Transfer all such Pledged Debt Securities or
the appropriate Applicable Ownership Interest in the Treasury Portfolio or
Pledged Treasury Securities, as the case may be, free and clear of the Pledge
created hereby, to the Purchase Contract Agent for the benefit of the Holders.
SECTION 4.6. APPLICATION OF PROCEEDS SETTLEMENT.
(a) In the event a Holder of (if a Tax Event Redemption has not
occurred) has not elected to make an effective Cash Settlement by notifying the
Purchase Contract Agent in the manner provided for in paragraph 5.4(a)(i) in the
Purchase Contract Agreement or has not made an Early Settlement of the Purchase
Contract(s) underlying its Type A Securities, such Holder shall be deemed to
have elected to pay for the shares of Common Stock to be issued under such
Purchase Contract(s) from the Proceeds of the related Pledged Debt Securities.
The Collateral Agent shall, by 10:00 a.m., New York City time, on the fourth
Business Day immediately preceding the Purchase Contract Settlement Date,
without any instruction from such Holder of Type A Securities, present the
related Pledged Debt Securities to the Remarketing Agent for remarketing. Upon
receiving such Pledged Debt Securities, the Remarketing Agent, pursuant to the
terms of the Remarketing Agreement and the Remarketing Underwriting Agreement,
will use its reasonable efforts to remarket such Pledged Debt Securities on such
date at a price not less than approximately [100.5%] of the aggregate Value of
such Pledged Debt Securities, plus accrued and unpaid distributions (including
deferred distributions), if any, thereon. After deducting as the Remarketing Fee
an amount not exceeding [25] basis points [(.25%)] of the aggregate Value of the
Pledged Debt Securities from any amount of such Proceeds in excess of the
aggregate Value, plus such accrued and unpaid distributions (including deferred
distributions) of the remarketed Pledged Debt Securities, the Remarketing Agent
will remit the entire amount of the Proceeds of such remarketing to the
Collateral Agent. On the Purchase Contract Settlement Date, the Collateral Agent
shall apply that portion of the Proceeds from such remarketing equal to the
aggregate Value, plus such accrued and unpaid distributions (including deferred
distributions) of such Pledged Debt Securities, to satisfy in full the
obligations of such Holders of Type A Securities to pay the Purchase Price to
purchase the Common Stock under the related Purchase Contracts. The remaining
portion of such Proceeds, if any, shall be distributed by the Collateral Agent
to the Purchase Contract Agent for payment to the Holders. If the Remarketing
Agent advises the Collateral Agent in writing that it cannot remarket the
related Pledged Debt Securities of such Holders of Type A Securities at a price
not less than [100%] of the aggregate Value of such Pledged Debt Securities plus
any accrued and unpaid distributions (including deferred distributions), thus
resulting in a Failed Remarketing and an event of default under the Purchase
Contract Agreement and hereunder, the Collateral Agent, for the benefit of the
Company will, at the written direction of the Company, retain or dispose of the
Pledged Debt Securities in accordance with applicable law and satisfy in full,
from any such disposition or retention, such Holder's obligation to pay the
Purchase Price for the Common Stock.
(b) In the event a Holder of Type B Securities or Type A Securities
(if a Tax Event Redemption has occurred) has not made an Early Settlement of the
Purchase Contract(s) underlying its Type B Securities or Type A Securities, such
Holder shall be deemed to have elected to pay for the shares of Common Stock to
be issued under such Purchase Contract(s) from the Proceeds of the related
Pledged Treasury Securities or the Treasury Portfolio, as the case may be. On
13
the Business Day immediately prior to the Purchase Contract Settlement Date, the
Collateral Agent shall, at the written direction of the Purchase Contract Agent,
invest the Cash proceeds of the maturing Pledged Treasury Securities or the
Treasury Portfolio, as the case may be, in overnight Permitted Investments.
Without receiving any instruction from any such Holder of Type B Securities or
Type A Securities, the Collateral Agent shall apply the Proceeds of the related
Pledged Treasury Securities or Treasury Portfolio to the settlement of such
Purchase Contracts on the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities or Treasury Portfolio and the investment earnings from the investment
in overnight Permitted Investments is in excess of the aggregate Purchase Price
of the Purchase Contracts being settled thereby, the Collateral Agent shall
distribute such excess, when received, to the Purchase Contract Agent for the
benefit of the Holders.
(c) Pursuant to the Remarketing Agreement and subject to the terms of
the Remarketing Underwriting Agreement, on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, but no earlier than
the Payment Date immediately preceding the Purchase Contract Settlement Date,
holders of Separate Debt Securities may elect to have their Separate Debt
Securities remarketed by delivering their Separate Debt Securities, together
with a notice of such election, substantially in the form of Exhibit C hereto,
to the Custodial Agent. The Custodial Agent will hold such Separate Debt
Securities in an account separate from the Collateral Account. A holder of
Separate Debt Securities electing to have its Separate Debt Securities
remarketed will also have the right to withdraw such election by written notice
to the Custodial Agent, substantially in the form of Exhibit D hereto, on or
prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, upon which notice the Custodial Agent will return such Separate
Debt Securities to such holder. On the fourth Business Day immediately preceding
the Purchase Contract Settlement Date, the Custodial Agent will deliver to the
Remarketing Agent for remarketing all separate Debt Securities delivered to the
Custodial Agent pursuant to this Section 4.6(c) and not withdrawn pursuant to
the terms hereof prior to such date. The portion of the proceeds from such
remarketing equal to the aggregate Value of such Separate Debt Securities will
automatically be remitted by the Remarketing Agent to the Custodial Agent for
the benefit of the holders of such Separate Debt Securities. In addition, after
deducting as the Remarketing Fee an amount not exceeding [25] basis points
[(.25%)] of the Value of the remarketed Separate Debt Securities, from any
amount of such proceeds in excess of the aggregate Value of the remarketed
Separate Debt Securities plus any accrued and unpaid distributions (including
deferred distributions, if any), the Remarketing Agent will remit to the
Custodial Agent the remaining portion of the proceeds, if any, for the benefit
of such holders. If, despite using its reasonable efforts, the Remarketing Agent
advises the Custodial Agent in writing that it cannot remarket the related
Separate Debt Securities of such holders at a price not less than [100%] of the
aggregate Value of such Separate Debt Securities plus accrued and unpaid
distributions (including deferred distributions) and thus resulting in a Failed
Remarketing, the Remarketing Agent will promptly return such Separate Debt
Securities to the Custodial Agent for redelivery to such holders.
SECTION 5. VOTING RIGHTS -- DEBT SECURITIES.
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The Purchase Contract Agent may exercise, or refrain from exercising, any and
all voting and other consensual rights pertaining to the Pledged Debt Securities
or any part thereof for any purpose not inconsistent with the terms of this
Agreement and in accordance with the terms of the Purchase Contract Agreement;
provided, that the Purchase Contract Agent shall not exercise or, as the case
may be, shall not refrain from exercising such right if, in the judgment of the
Company, such action would impair or otherwise have a material adverse effect on
the value of all or any of the Pledged Debt Securities; and provided, further,
that the Purchase Contract Agent shall give the Company and the Collateral Agent
at least five days' prior written notice of the manner in which it intends to
exercise, or its reasons for refraining from exercising, any such right. Upon
receipt of any notices and other communications in respect of any Pledged Debt
Securities, including notice of any meeting at which holders of Debt Securities
are entitled to vote or solicitation of consents, waivers or proxies of holders
of Debt Securities, the Collateral Agent shall use reasonable efforts to send
promptly to the Purchase Contract Agent such notice or communication, and as
soon as reasonably practicable after receipt of a written request therefor from
the Purchase Contract Agent, execute and deliver to the Purchase Contract Agent
such proxies and other instruments in respect of such Pledged Debt Securities
(in form and substance satisfactory to the Collateral Agent) as are prepared by
the Purchase Contract Agent with respect to the Pledged Debt Securities.
SECTION 6. RIGHTS AND REMEDIES; DISTRIBUTION OF THE DEBENTURES; TAX
EVENT REDEMPTION
SECTION 6.1. RIGHTS AND REMEDIES OF THE COLLATERAL AGENT.
(a) In addition to the rights and remedies specified in Section 4.4
hereof or otherwise available at law or in equity, after an event of default
hereunder, the Collateral Agent shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform Commercial Code
(or any successor thereto) as in effect in the State of New York from time to
time (the "Code") (whether or not the Code is in effect in the jurisdiction
where the rights and remedies are asserted) and the TRADES Regulations and such
additional rights and remedies to which a secured party is entitled under the
laws in effect in any jurisdiction where any rights and remedies hereunder may
be asserted. Wherever reference is made in this Agreement to any section of the
Code, such reference shall be deemed to include a reference to any provision of
the Code which is successor to, or amendment of, such section. Without limiting
the generality of the foregoing, such remedies may include, to the extent
permitted by applicable law, (i) retention of the Pledged Debt Securities or
other Collateral in full satisfaction of the Holders' obligations under the
Purchase Contracts or (ii) sale of the Pledged Debt Securities or other
Collateral in one or more public or private sales and application of the
proceeds in full satisfaction of the Holders' obligations under the Purchase
Contracts.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause ________ of the definition of such
term) of the Treasury Portfolio or on account of principal payments of any
Pledged Treasury Securities as provided in Section 3 hereof in satisfaction of
the obligations of the Holder of the Securities of which such Pledged Treasury
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause ________ of the definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities, or such appropriate Applicable Ownership Interest (as
specified in clause _____ of the definition of such term) of the Treasury
15
Portfolio, as applicable, and such obligations of such Holder, any and all of
the rights and remedies available to a secured party under the Code and the
TRADES Regulations after default by a debtor, and as otherwise granted herein or
under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) principal of, or interest
on, the Pledged Debt Securities, (ii) the principal amount of the Pledged
Treasury Securities, or (iii) the appropriate Applicable Ownership Interest in
the Treasury Portfolio, subject, in each case, to the provisions of Section 3,
and as otherwise granted herein.
(d) The Purchase Contract Agent individually and as attorney-in-fact
for each Holder of Securities, in the event such Holder becomes the Holder of
Type B Securities, agree that, from time to time, upon the written request of
the Collateral Agent, the Purchase Contract Agent or such Holder shall execute
and deliver such further documents and do such other acts and things as the
Collateral Agent may reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the Collateral
Agent hereunder. The Purchase Contract Agent shall have no liability to any
Holder for executing any documents or taking any such acts requested by the
Collateral Agent hereunder, except for liability for its own negligent act, its
own negligent failure to act or its own willful misconduct.
SECTION 6.2. TAX EVENT REDEMPTION.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Collateral Agent will, upon the written
instruction of the Company and the Purchase Contract Agent, deliver the
Applicable Principal Amount of Pledged Debt Securities to the Trustee for
payment of the Redemption Price. The Collateral Agent shall, or in the event the
Pledged Debt Securities are registered in the name of the Purchase Contract
Agent, the Purchase Contract Agent shall, direct the Trustee to pay the
Redemption Price therefor payable on the Tax Event Redemption Date on or prior
to 12:30 p.m., New York City time, such Redemption Price to be paid by check or
wire transfer in immediately available funds at such place and at such account
as may be designated by the Collateral Agent. In the event the Collateral Agent
receives such Redemption Price, the Collateral Agent will, at the written
direction of the Company, apply an amount equal to the Redemption Amount of such
Redemption Price to purchase from the Quotation Agent, the Treasury Portfolio
and promptly remit the remaining portion of such Redemption Price to the
Purchase Contract Agent for payment to the Holders of Type A Securities. The
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account
in the manner specified herein for Pledged Debt Securities to secure the
obligation of all Holders of Type A Securities to purchase Common Stock of the
Company under the Purchase Contracts constituting a part of such Type A
Securities, in substitution for the Pledged Debt Securities. Thereafter the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Treasury Portfolio as it had in respect of the Pledged Debt
Securities, as provided in Sections 2, 3, 4, 5 and 6, and any reference herein
16
to the Pledged Debt Securities shall be deemed to be a reference to such
Treasury Portfolio.
SECTION 6.3. SUBSTITUTIONS.
Whenever a Holder has the right to substitute Treasury Securities,
Debt Securities or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, for Collateral held by the Collateral Agent, such
substitution shall not constitute a novation of the security interest created
hereby.
SECTION 7. REPRESENTATIONS AND WARRANTIES; COVENANTS.
SECTION 7.1. REPRESENTATIONS AND WARRANTIES.
The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any representation or warranty made by or on
behalf of a Holder), hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each day a Holder
Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and
lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and,
in the case of Collateral delivered in physical form, is the sole
holder of such Collateral and is the sole beneficial owner of, or
has the right to Transfer, the Collateral it Transfers to the
Collateral Agent, free and clear of any security interest, lien,
encumbrance, call, liability to pay money or other restriction
other than the security interest and lien granted under Section 2
hereof;
(c) upon the Transfer of the Collateral to the Collateral Account or
physical delivery of the Debt Securities to the Collateral Agent,
the Collateral Agent, for the benefit of the Company, will have a
valid and perfected first priority security interest therein
(assuming that any central clearing operation or any Intermediary
or other entity not within the control of the Holder involved in
the Transfer of the Collateral, including the Collateral Agent,
gives the notices and takes the action required of it hereunder
and under applicable law for perfection of that interest and
assuming the establishment and exercise of control pursuant to
Section 2.2 hereof); and
17
(d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any
security interest, lien or other encumbrance on the Collateral
other than the security interest and lien granted under Section 2
hereof or violate any provision of any existing law or regulation
applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is
binding on it or any of its assets.
SECTION 7.2. COVENANTS.
The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any covenant made by or on behalf of a Holder),
hereby covenant to the Collateral Agent that for so long as the Collateral
remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will create
or purport to create or allow to subsist any mortgage, charge,
lien, pledge or any other security interest whatsoever over the
Collateral or any part of it other than pursuant to this
Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or
any part of it except for the beneficial interest therein,
subject to the pledge hereunder, transferred in connection with
the Transfer of the Securities.
SECTION 8. THE COLLATERAL AGENT. It is hereby agreed as follows:
SECTION 8.1. APPOINTMENT, POWERS AND IMMUNITIES.
The Collateral Agent shall act as Agent for the Company hereunder with
such powers as are specifically vested in the Collateral Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Each of the Collateral Agent, the Custodial Agent and the Securities
Intermediary: (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants or obligations
shall be inferred from this Agreement against any of them, nor shall any of them
be bound by the provisions of any agreement by any party hereto beyond the
specific terms hereof; (b) shall not be responsible for any recitals contained
in this Agreement, or in any certificate or other document referred to or
provided for in, or received by it under, this Agreement, the Securities or the
Purchase Contract Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement (other than as
against the Collateral Agent), the Securities or the Purchase Contract Agreement
18
or any other document referred to or provided for herein or therein or for any
failure by the Company or any other Person (except the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may be) to perform
any of its obligations hereunder or thereunder or for the perfection, priority
or, except as expressly required hereby, maintenance of any security interest
created hereunder; (c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder (except in the case of the
Collateral Agent, pursuant to directions furnished under Section 8.2 hereof,
subject to Section 8.6 hereof); (d) shall not be responsible for any action
taken or omitted to be taken by it hereunder or under any other document or
instrument referred to or provided for herein or in connection herewith or
therewith, except for its own negligence or willful misconduct; and (e) shall
not be required to advise any party as to selling or retaining, or taking or
refraining from taking any action with respect to, the Securities or other
property deposited hereunder. Subject to the foregoing, during the term of this
Agreement, the Collateral Agent shall take all reasonable action in connection
with the safekeeping and preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the Value of
the Collateral. Notwithstanding the foregoing, the Collateral Agent, the
Custodial Agent and Securities Intermediary, each in its individual capacity,
hereby waive any right of setoff, bankers lien, liens or perfection rights as
securities intermediary or any counterclaim with respect to any of the
Collateral.
SECTION 8.2. INSTRUCTIONS OF THE COMPANY.
The Company shall have the right, by one or more instruments in
writing executed and delivered to the Collateral Agent, the Custodial Agent or
the Securities Intermediary, as the case may be, to direct the time, method and
place of conducting any proceeding for the realization of any right or remedy
available to the Collateral Agent, or of exercising any power conferred on the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, or to direct the taking or refraining from taking of any action
authorized by this Agreement; provided, however, that (i) such direction shall
not conflict with the provisions of any law or of this Agreement and (ii) the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall be
adequately indemnified as provided herein. Nothing in this Section 8.2 shall
impair the right of the Collateral Agent in its discretion to take any action or
omit to take any action which it deems proper and which is not inconsistent with
such direction.
SECTION 8.3. RELIANCE BY COLLATERAL AGENT.
Each of the Securities Intermediary, the Custodial Agent and the
Collateral Agent shall be entitled conclusively to rely upon any
certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent,
19
the Custodial Agent or the Securities Intermediary, as the case may be. As to
any matters not expressly provided for by this Agreement, the Collateral Agent,
the Custodial Agent and the Securities Intermediary shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.
SECTION 8.4. RIGHTS IN OTHER CAPACITIES.
The Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may (without having to account therefor to the
Company) accept deposits from, lend money to, make their investments in and
generally engage in any kind of banking, trust or other business with the
Purchase Contract Agent and any Holder of Securities (and any of their
respective subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, and the Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent and any Holder of Securities without having to
account for the same to the Company; provided that each of the Securities
Intermediary, the Custodial Agent and the Collateral Agent covenants and agrees
with the Company that it shall not accept, receive or permit there to be created
in favor of itself and shall take no affirmative action to permit there to be
created in favor of any other Person, any security interest, lien or other
encumbrance of any kind in or upon the Collateral.
SECTION 8.5. NON-RELIANCE ON COLLATERAL AGENT.
None of the Securities Intermediary, the Custodial Agent or the
Collateral Agent shall be required to keep itself informed as to the performance
or observance by the Purchase Contract Agent or any Holder of Securities of this
Agreement, the Purchase Contract Agreement, the Securities or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Purchase Contract Agent or any Holder of Securities. The Collateral
Agent, the Custodial Agent and the Securities Intermediary shall not have any
duty or responsibility to provide the Company with any credit or other
information concerning the affairs, financial condition or business of the
Purchase Contract Agent or any Holder of Securities (or any of their respective
affiliates) that may come into the possession of the Collateral Agent, the
Custodial Agent or the Securities Intermediary or any of their respective
affiliates.
SECTION 8.6. COMPENSATION AND INDEMNITY.
The Company agrees: (i) to pay each of the Collateral Agent and the
Custodial Agent from time to time such compensation as shall be agreed in
writing between the Company and the Collateral Agent or the Custodial Agent, as
the case may be, for all services rendered by each of them hereunder and (ii) to
indemnify the Collateral Agent, the Custodial Agent and the Securities
Intermediary for, and to hold each of them harmless from and against, any loss,
liability or reasonable out-of-pocket expense incurred without negligence,
willful misconduct or bad faith on its part, arising out of or in connection
with the acceptance or administration of its powers and duties under this
Agreement, including the reasonable out-of-pocket costs and expenses (including
reasonable fees and expenses of counsel) of defending itself against any claim
20
or liability in connection with the exercise or performance of such powers and
duties. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall each promptly notify the Company of any third party claim
which may give rise to indemnity hereunder and give the Company the opportunity
to participate in the defense of such claim with counsel reasonably satisfactory
to the indemnified party, and no such claim shall be settled without the written
consent of the Company, which consent shall not be unreasonably withheld.
SECTION 8.7. FAILURE TO ACT.
In the event of any ambiguity in the provisions of this Agreement or
any dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent and the Custodial Agent shall be entitled, after prompt notice
to the Company and the Purchase Contract Agent, at its sole option, to refuse to
comply with any and all claims, demands or instructions with respect to such
property or funds so long as such dispute or conflict shall continue, and
neither the Collateral Agent nor the Custodial Agent shall be or become liable
in any way to any of the parties hereto for its failure or refusal to comply
with such conflicting claims, demands or instructions. The Collateral Agent and
the Custodial Agent shall be entitled to refuse to act until either (i) such
conflicting or adverse claims or demands shall have been finally determined by a
court of competent jurisdiction or settled by agreement between the conflicting
parties as evidenced in a writing, satisfactory to the Collateral Agent or the
Custodial Agent, as the case may be, or (ii) the Collateral Agent or the
Custodial Agent, as the case may be, shall have received security or an
indemnity satisfactory to the Collateral Agent or the Custodial Agent, as the
case may be, sufficient to save the Collateral Agent or the Custodial Agent, as
the case may be, harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which the Collateral Agent or the Custodial
Agent, as the case may be, may without negligence, willful misconduct, or bad
faith on its part incur by reason of its acting. The Collateral Agent or the
Custodial Agent may in addition elect to commence an interpleader action or seek
other judicial relief or orders as the Collateral Agent or the Custodial Agent,
as the case may be, may deem necessary. Notwithstanding anything contained
herein to the contrary, neither the Collateral Agent nor the Custodial Agent
shall be required to take any action that is in its opinion contrary to law or
to the terms of this Agreement, or which would in its opinion subject it or any
of its officers, employees or directors to liability.
SECTION 8.8. RESIGNATION OF COLLATERAL AGENT.
Subject to the appointment and acceptance of a successor Collateral
Agent or Custodial Agent as provided below, (a) the Collateral Agent and the
Custodial Agent may resign at any time by giving notice thereof to the Company
and the Purchase Contract Agent as attorney-in-fact for the Holders of
Securities, (b) the Collateral Agent and the Custodial Agent may be removed at
any time by the Company and (c) if the Collateral Agent or the Custodial Agent
fails to perform any of its material obligations hereunder in any material
respect for a period of not less than 20 days after receiving written notice of
such failure by the Purchase Contract Agent and such failure shall be
continuing, the Collateral Agent or the Custodial Agent may be removed by the
Purchase Contract Agent. The Purchase Contract Agent shall promptly notify the
Company of any removal of the Collateral Agent pursuant to clause (c) of the
21
immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent or
Custodial Agent, as the case may be. If no successor Collateral Agent or
Custodial Agent, as the case may be, shall have been so appointed and shall have
accepted such appointment within 30 days after the retiring Collateral Agent's
or Custodial Agent's giving of notice of resignation or such removal, then the
retiring Collateral Agent or Custodial Agent, as the case may be, may petition
any court of competent jurisdiction for the appointment of a successor
Collateral Agent or Custodial Agent, as the case may be. Each of the Collateral
Agent and the Custodial Agent shall be a bank which has an office in New York,
New York with a combined capital and surplus of at least $75,000,000. Upon the
acceptance of any appointment as Collateral Agent or Custodial Agent, as the
case may be, hereunder by a successor Collateral Agent or Custodial Agent, as
the case may be, such successor shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent or Custodial Agent, as the case may be, and the retiring Collateral Agent
or Custodial Agent, as the case may be, shall take all appropriate action to
transfer any money and property held by it hereunder (including the Collateral)
to such successor. The retiring Collateral Agent or Custodial Agent shall, upon
such succession, be discharged from its duties and obligations as Collateral
Agent or Custodial Agent hereunder. After any retiring Collateral Agent's or
Custodial Agent's resignation hereunder as Collateral Agent or Custodial Agent,
the provisions of this Section 8 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Collateral Agent or Custodial Agent. Any resignation or removal of the
Collateral Agent hereunder shall be deemed for all purposes of this Agreement as
the simultaneous resignation or removal of the Custodial Agent and the
Securities Intermediary.
SECTION 8.9. RIGHT TO APPOINT AGENT OR ADVISOR.
The Collateral Agent shall have the right to appoint agents or
advisors in connection with any of its duties hereunder, and the Collateral
Agent shall not be liable for any action taken or omitted by, or in reliance
upon the advice of, such agents or advisors selected in good faith. The
appointment of agents pursuant to this Section 8.9 shall be subject to prior
consent of the Company, which consent shall not be unreasonably withheld.
SECTION 8.10. SURVIVAL.
The provisions of this Section 8 shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent or the
Custodial Agent.
SECTION 8.11. EXCULPATION.
Anything in this Agreement to the contrary notwithstanding, in no
event shall any of the Collateral Agent, the Custodial Agent or the Securities
Intermediary or their officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Collateral Agent, the
Custodial Agent or the Securities Intermediary, or any of them, incurred without
any act or deed that is found to be attributable to gross negligence or willful
misconduct on the part of the Collateral Agent, the Custodial Agent or the
Securities Intermediary.
22
SECTION 9. AMENDMENT.
SECTION 9.1. AMENDMENT WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders or the holders of any Separate Debt
Securities, the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, at any time and from
time to time, may amend this Agreement, in form satisfactory to the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, for any of the following purposes:
(1) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the
Company; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company so long as such covenants or such surrender do not adversely
affect the validity, perfection or priority of the security interests
granted or created hereunder; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Custodial Agent, Securities
Intermediary or Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such
provisions herein, or to make any other provisions with respect to
such matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
SECTION 9.2. AMENDMENT WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of said Holders delivered to
the Company, the Purchase Contract Agent or the Collateral Agent, as the case
may be, the Company, when duly authorized, the Purchase Contract Agent, the
Collateral Agent, the Custodial Agent and the Securities Intermediary may amend
this Agreement for the purpose of modifying in any manner the provisions of this
Agreement or the rights of the Holders in respect of the Securities; provided,
however, that no such supplemental agreement shall, without the consent of the
Holder of each Outstanding Security adversely affected thereby,
(1) change the amount or type of Collateral underlying a Security
(except for the rights of holders of Type A Securities to substitute
the Treasury Securities for the Pledged Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, or the rights of Holders of Type B Securities to
substitute Debt Securities or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as applicable, for the Pledged
Treasury Securities), impair the right of the Holder of any Security
to receive distributions on the underlying Collateral or otherwise
adversely affect the Holder's rights in or to such Collateral; or
23
(2) otherwise effect any action that would require the consent of
the Holder of each Outstanding Security affected thereby pursuant to
the Purchase Contract Agreement if such action were effected by an
agreement supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
SECTION 9.3. EXECUTION OF AMENDMENTS.
In executing any amendment permitted by this Section, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent shall be entitled to receive and (subject to Section 6.1 hereof,
with respect to the Collateral Agent, and Section 7.1 of the Purchase Contract
Agreement, with respect to the Purchase Contract Agent) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such amendment have been
satisfied.
SECTION 9.4. EFFECT OF AMENDMENTS.
Upon the execution of any amendment under this Section 9, this
Agreement shall be modified in accordance therewith, and such amendment shall
form a part of this Agreement for all purposes; and every Holder of Certificates
theretofore or thereafter authenticated, executed on behalf of the Holders and
delivered under the Purchase Contract Agreement shall be bound thereby.
SECTION 9.5. REFERENCE TO AMENDMENTS.
Security Certificates authenticated, executed on behalf of the Holders
and delivered after the execution of any amendment pursuant to this Section may,
and shall if required by the Collateral Agent or the Purchase Contract Agent,
bear a notation in form approved by the Purchase Contract Agent and the
Collateral Agent as to any matter provided for in such amendment. If the Company
shall so determine, new Security Certificates so modified as to conform, in the
opinion of the Collateral Agent, the Purchase Contract Agent and the Company, to
any such amendment may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Purchase
Contract Agent in accordance with the Purchase Contract Agreement in exchange
for Outstanding Security Certificates.
SECTION 10. MISCELLANEOUS.
SECTION 10.1. NO WAIVER.
24
No failure on the part of the Collateral Agent or any of its agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Collateral Agent or any of its
agents of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.
SECTION 10.2. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. Without limiting the foregoing, the above
choice of law is expressly agreed to by the Company, the Securities
Intermediary, the Custodial Agent, the Collateral Agent and the Holders from
time to time acting through the Purchase Contract Agent, as their
attorney-in-fact, in connection with the establishment and maintenance of the
Collateral Account. The Company, the Collateral Agent and the Holders from time
to time of the Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Company, the Collateral Agent and the Holders from time to time of
the Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 10.3. NOTICES.
All notices, requests, consents and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing (including,
without limitation, by telecopy) delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof (or
in the case of Holders, may be made and deemed given as provided in Sections 1.5
and 1.6 of the Purchase Contract Agreement) or, as to any party, at such other
address as shall be designated by such party in a notice to the other parties.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid (except as aforesaid).
SECTION 10.4. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
and the Holders from time to time of the Securities, by their acceptance of the
same, shall be deemed to have agreed to be bound by the provisions hereof and to
have ratified the agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.
25
SECTION 10.5. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
SECTION 10.6. SEVERABILITY.
If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7. EXPENSES, ETC.
The Company agrees to reimburse the Collateral Agent and the Custodial
Agent for: (a) all reasonable out-of-pocket costs and expenses of the Collateral
Agent and the Custodial Agent (including, without limitation, the reasonable
fees and expenses of the necessary services of a Securities Intermediary and of
counsel to the Collateral Agent and the Custodial Agent), in connection with (i)
the negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
SECTION 10.8. SECURITY INTEREST ABSOLUTE.
All rights of the Collateral Agent and security interests hereunder,
and all obligations of the Holders from time to time hereunder, shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of
the Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the
obligations of Holders of Securities under the related Purchase
Contracts, or any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the Purchase
Contract Agreement or any Purchase Contract or any other agreement or
instrument relating thereto; or
26
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
TXU CORP.
By:______________________________
Name:
Title:
Address for Notices:
TXU Corp.
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Treasurer
Telecopy:
,
-------------------------
as Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By:______________________________
Name:
Title:
Address for Notices:
,
---------------------
as Collateral Agent, Custodial
Agent and as Securities Intermediary
By:______________________________
Name:
Title:
Address for Notices:
29
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
Re: Securities of TXU Corp. (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of __________, ______, (the "Pledge Agreement") among
the Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Type A Securities] [Type B Securities] from time to time,
that the holder of Securities listed below (the "Holder") has elected to
substitute [$_____ principal amount of Treasury Securities] [$_______ principal
amount of Debt Securities or Stated Amount of the appropriate Applicable
Ownership Interest in the Treasury Portfolio] in exchange for an equal Value of
[Pledged Debt Securities or the appropriate Applicable Ownership Interest in the
Treasury Portfolio] [Pledged Treasury Securities] held by you in accordance with
the Pledge Agreement and has delivered to us a notice stating that the Holder
has Transferred [Treasury Securities] [Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio] to you, as Collateral
Agent. We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Debt Securities or the appropriate Applicable Ownership
Interest in the Treasury Portfolio], to release the [Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury Portfolio] [Treasury
Securities] related to such [Type A Securities] [Type B Securities] to us in
accordance with the Holder's instructions. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Date:____________________ _________________________________
By:_____________________________
Name:
Title:
Signature
Guarantee:_______________
A-1
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Debt Securities or the appropriate Applicable Ownership
Interest in the Treasury Portfolio] for the [Pledged Debt Securities or the
Treasury Portfolio] [Pledged Treasury Securities]:
------------------------------ ------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
--------------------------------
--------------------------------
--------------------------------
A-2
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
Re: Securities of TXU Corp. (the "Company")
The undersigned Holder hereby notifies you that it has delivered to
_________________________, as Collateral Agent, [$_______ principal amount of
Treasury Securities] [$_______ principal amount of Debt Securities or Stated
Amount of the appropriate Applicable Ownership Interest in the Treasury
Portfolio] in exchange for an equal Value of [Pledged Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury Portfolio] [Pledged
Treasury Securities] held by the Collateral Agent, in accordance with Section
4.1 of the Pledge Agreement, dated ________, _____ (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 Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio] [Pledged Treasury
Securities] related to such [Type A Securities] [Type B Securities]. Capitalized
terms used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Dated:______________________________ _________________________________
Signature
Signature Guarantee:______________
B-1
Please print name and address of Registered Holder:
------------------------------- --------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
-------------------------------
-------------------------------
-------------------------------
B-2
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
Re: Securities of TXU Corp. (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of ________, _____ (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and ______________, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Type A Securities and Type B Securities from
time to time, that the undersigned elects to deliver $________ principal amount
of Debt Securities for delivery to the Remarketing Agent on the fourth Business
Day immediately preceding the Purchase Contract Settlement Date for remarketing
pursuant to Section 4.6(c) of the Pledge Agreement. The undersigned will, upon
request of the Remarketing Agent, execute and deliver any additional documents
deemed by the Remarketing Agent or by the Company to be necessary or desirable
to complete the sale, assignment and transfer of the Debt Securities tendered
hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions". The undersigned hereby instructs you, in the event of
Failed Remarketing, upon receipt of the Debt Securities tendered herewith from
the Remarketing Agent, to deliver such Debt Securities 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 Debt Securities tendered hereby and that the undersigned is the
record owner of any Debt Securities tendered herewith in physical form or a
participant in The Depositary Trust Company ("DTC") and the beneficial owner of
any Debt Securities tendered herewith by book-entry transfer to your account at
DTC and (ii) agrees to be bound by the terms and conditions of Section 4.6(c) of
the Pledge Agreement. Capitalized terms used herein but not defined shall have
the meaning set forth in the Pledge Agreement.
Date:___________________________ ____________________________________
By:______________________________
Name:
Title:
Signature
Guarantee:_____________
C-1
Please print name and address:
---------------------------------- -----------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
---------------------------------
---------------------------------
---------------------------------
C-2
A. PAYMENT INSTRUCTIONS B. DELIVERY INSTRUCTIONS
Proceeds of the remarketing should In the event of a Failed Remarketing,
be paid by check in the name of the Debt Securities which are in physical
person(s) set forth below and mailed form should be delivered to the
to the address set forth below. person(s) set forth below and mailed to
the address set forth below.
Name(s) Name(s)
____________________________________ ________________________________
(Please Print) (Please Print)
Address Address
___________________________________ ___________________________________
___________________________________ ___________________________________
(Please Print) (Please Print)
___________________________________ ___________________________________
(Zip Code) (Zip Code)
___________________________________ ___________________________________
(Tax Identification or Social (Tax Identification or Social
Security Number) Security Number)
In the event of a Failed Remarketing,
Debt Securities which are in book-entry
form should be credited to the account
at The Depositary Trust Company set
forth below.
___________________________________
DTC Account Number
Name of Account
Party:_________________________
C-3
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
Re: Securities of TXU Corp. (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of _________, _____ (the "Pledge Agreement")
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and , as Purchase Contract Agent and as attorney-in-fact for the
Holders of Type A Securities and Type B Securities from time to time, that the
undersigned elects to withdraw the $_____ principal amount of Debt Securities
delivered to the Custodial Agent on ____________ for remarketing pursuant to
Section 4.6(c) of the Pledge Agreement. The undersigned hereby instructs you to
return such Debt Securities to the undersigned in accordance with the
undersigned's instructions. With this notice, the Undersigned hereby agrees to
be bound by the terms and conditions of Section 4.6(c) of the Pledge Agreement.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date:___________________________ ____________________________________
By:______________________________
Name:
Title:
Signature
Guarantee:_____________
D-1
Please print name and address:
------------------------------- --------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
-------------------------------
-------------------------------
-------------------------------
D-2
