Exhibit 4.8
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
and
THE BANK OF NEW YORK,
as Collateral Agent, Custodial Agent and Securities Intermediary
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of September 10, 2002
TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS
SECTION 1.01. Definitions..................................................2
ARTICLE 2 PLEDGE
SECTION 2.01. Pledge.......................................................6
SECTION 2.02. Control; Financing Statement.................................7
SECTION 2.03. Termination..................................................7
ARTICLE 3 DISTRIBUTIONS ON PLEDGED COLLATERAL
SECTION 3.01. Income Distributions.........................................7
SECTION 3.02. Principal Payments Following Termination Event...............7
SECTION 3.03. Principal Payments Prior to or on Purchase Contract
Settlement Date..............................................7
SECTION 3.04. Payments to Purchase Contract Agent..........................8
SECTION 3.05. Assets Not Properly Released.................................8
ARTICLE 4 CONTROL
SECTION 4.01. Establishment of Collateral Account..........................9
SECTION 4.02. Treatment as Financial Assets................................9
SECTION 4.03. Sole Control by Collateral Agent.............................9
SECTION 4.04. Securities Intermediary's Location...........................9
SECTION 4.05. No Other Claims..............................................9
SECTION 4.06. Investment and Release......................................10
SECTION 4.07. Statements and Confirmations................................10
SECTION 4.08. Tax Allocations.............................................10
SECTION 4.09. No Other Agreements.........................................10
SECTION 4.10. Powers Coupled with an Interest.............................10
ARTICLE 5 INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY UNITS AND
REESTABLISHMENT OF CORPORATE UNITS
SECTION 5.01. Initial Deposit of Preferred Securities.....................10
SECTION 5.02. Establishment of Treasury Units.............................11
SECTION 5.03. Reestablishment of Corporate Units..........................13
SECTION 5.04. Termination Event...........................................15
SECTION 5.05. Cash Settlement.............................................16
SECTION 5.06. Early Settlement............................................17
SECTION 5.07. Application of Proceeds in Settlement of Purchase
Contracts...................................................18
SECTION 5.08. Tax Event Redemption........................................20
ARTICLE 6 VOTING RIGHTS - PLEDGED PREFERRED SECURITIES AND PLEDGED NOTES
SECTION 6.01. Voting Rights...............................................20
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ARTICLE 7 RIGHTS AND REMEDIES
SECTION 7.01. Rights and Remedies of the Collateral Agent.................21
SECTION 7.02. Substitution of Notes or Treasury Portfolio.................22
SECTION 7.03. Tax Event Redemption........................................22
SECTION 7.04. Initial Remarketing.........................................23
SECTION 7.05. Substitutions...............................................24
ARTICLE 8 REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 8.01. Representations and Warranties..............................24
SECTION 8.02. Covenants...................................................24
ARTICLE 9 THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES
INTERMEDIARY
SECTION 9.01. Appointment, Powers and Immunities..........................25
SECTION 9.02. Instructions of the Company.................................26
SECTION 9.03. Reliance....................................................26
SECTION 9.04. Rights in Other Capacities..................................26
SECTION 9.05. Non-Reliance................................................27
SECTION 9.06. Compensation and Indemnity..................................27
SECTION 9.07. Failure to Act..............................................27
SECTION 9.08. Resignation.................................................28
SECTION 9.09. Right to Appoint Agent or Advisor...........................29
SECTION 9.10. Survival....................................................30
SECTION 9.11. Exculpation.................................................30
ARTICLE 10 AMENDMENT
SECTION 10.01. Amendment without Consent of Holders........................30
SECTION 10.02. Amendment with Consent of Holders...........................30
SECTION 10.03. Execution of Amendments.....................................31
SECTION 10.04. Effect of Amendments........................................31
SECTION 10.05. Reference of Amendments.....................................31
ARTICLE 11 MISCELLANEOUS
SECTION 11.01. No Waiver...................................................32
SECTION 11.02. Governing Law...............................................32
SECTION 11.03. Notices.....................................................32
SECTION 11.04. Successors and Assigns......................................32
SECTION 11.05. Counterparts................................................33
SECTION 11.06. Severability................................................33
SECTION 11.07. Expenses, Etc...............................................33
SECTION 11.08. Security Interest Absolute..................................33
SECTION 11.09. Notice of Tax Event, Tax Event Redemption and
Termination Event...........................................34
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Exhibit A - Instruction from Purchase Contract Agent to Collateral Agent
(Establishment of Treasury Units)
Exhibit B - Instruction from Collateral Agent to Securities Intermediary
(Establishment of Treasury Units)
Exhibit C - Instruction from Purchase Contract Agent to Collateral Agent
(Reestablishment of Corporate Units)
Exhibit D - Instruction from Collateral Agent to Securities Intermediary
(Reestablishment of Corporate Units)
Exhibit E - Notice of Cash Settlement from Securities Intermediary to Purchase
Contract Agent (Cash Settlement Amounts)
Exhibit F - Instruction to Custodial Agent Regarding Remarketing
Exhibit G - Instruction to Custodial Agent Regarding Withdrawal From Remarketing
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of September 10, 2002, among Public Service
Enterprise Group Incorporated, a New Jersey corporation (the "Company"), The
Bank of New York, a New York banking corporation, not individually but solely as
collateral agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent"), as custodial agent (in such capacity,
together with its successors in such capacity, the "Custodial Agent") and as
"securities intermediary" as defined in Section 8-102(a)(14) of the UCC (as
defined herein) (in such capacity, together with its successors in such
capacity, the "Securities Intermediary"), and Wachovia Bank, National
Association, a banking association organized under the laws of the United
States, 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 defined in the Purchase Contract
Agreement) (in such capacity, together with its successors in such capacity, the
"Purchase Contract Agent") under the Purchase Contract Agreement (as defined
herein).
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 9,200,000 Corporate Units (as defined herein) will be issued.
Each Corporate Unit (as defined herein), at issuance, consists of a unit
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 (as defined herein), for an amount equal to $50 (the "Stated Amount"), a
number of shares of Public Service Enterprise Group Incorporated common stock,
no par value ("Common Stock"), equal to the Settlement Rate (as defined herein),
and (b) either beneficial ownership of a preferred trust security (a "Preferred
Security") issued by PSEG Funding Trust I, a Delaware statutory trust (the
"Trust"), having a liquidation amount equal to the Stated Amount, a Note (as
defined below) or an Applicable Ownership Interest in the Treasury Portfolio (as
defined below).
Pursuant to the terms of the Purchase Contract Agreement and the Purchase
Contracts, the Holders 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 herein of the Collateral (as defined herein) to secure
the Obligations (as defined herein).
Accordingly, the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, on its own behalf and
as attorney-in-fact of the Holders from time to time of the Securities, agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. 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, Exhibit or other subdivision;
(c) the following terms which are defined in the UCC shall have the
meanings set forth therein: "certificated security," "control," "financial
asset," "entitlement order," "investment property," "securities account" and
"security entitlement";
(d) the following terms have the meanings assigned to them in the Purchase
Contract Agreement: "Act," "Bankruptcy Code," "Board Resolution," "Business
Day," "Cash Merger," "Cash Settlement," "Certificate," "Early Settlement,"
"Early Settlement Amount," "Early Settlement Date," "Failed Initial
Remarketing," "Failed Secondary Remarketing," "Holder," "Initial Remarketing,"
"Initial Remarketing Date," "Initial Reset Date," "Notes," "Officers'
Certificate," "Opinion of Counsel," "Outstanding Securities," "Purchase
Contract," "Purchase Contract Settlement Date," "Purchase Price," "Remarketing
Agent," "Remarketing Agreement," "Remarketing Fee," "Secondary Remarketing,"
"Security," "Separate Preferred Securities or Notes," "Separate Preferred
Securities or Notes Purchase Price," "Settlement Rate," "Successful Initial
Remarketing," "Termination Event," and "Underwriting Agreement";
(e) the following terms have the meanings assigned to them in the Amended
and Restated Trust Agreement of PSEG Funding Trust I, of even date herewith (the
"Declaration"): "Applicable Ownership Interest," "Applicable Principal Amount,"
"Event of Default," "Indenture," "Indenture Trustee," "Liquidation
Distribution," "Primary Treasury Dealer," "Property Trustee," "Quotation Agent,"
"Redemption Amount," "Redemption Price," "Remarketing," "Tax Event," "Tax Event
Redemption," "Tax Event Redemption Date," "Treasury Portfolio," and Treasury
Portfolio Purchase Price; and
(f) the following terms have the meanings given to them in this Section
1.01(f):
"Agreement" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time.
"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.
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"Collateral" means the collective reference to:
(i) all investment property and other financial assets from time to
time credited to the Collateral Account, including, without limitation,
(A) the Preferred Securities and security entitlements relating thereto
which are a component of the Corporate Units from time to time, (B) the
Applicable Ownership Interests (as specified in Clause (A) of the
definition of such term) of the Holders with respect to the Treasury
Portfolio which are a component of the Corporate Units from time to time,
(C) the Notes and security entitlements relating thereto which are a
component of the Corporate Units from time to time, (D) any Treasury
Securities and security entitlements relating thereto delivered from time
to time upon establishment of Treasury Units in accordance with Section
5.02 hereof and (E) payments made by Holders pursuant to Section 5.05
hereof;
(ii) all Proceeds of any of the foregoing (whether such Proceeds
arise before or after the commencement of any proceeding under any
applicable bankruptcy, insolvency or other similar law, by or against the
pledgor or with respect to the pledgor) (Notwithstanding the foregoing,
for the avoidance of doubt, the cash payments at a rate of 6.25% per year
(or in the event of deferred and unpaid Distributions on the Pledged
Preferred Securities or Pledged Notes, 10.25% per year) of the Stated
Amount per Corporate Unit to Holders of Corporate Units, whether current
or deferred, shall not be considered as Proceeds of the Pledged Securities
and therefore are not part of the Collateral); and
(iii) all powers and rights now owned or hereafter acquired under or
with respect to the Collateral Account.
"Collateral Account" means the securities account of The Bank of New York,
as Collateral Agent, maintained by the Securities Intermediary and designated
"The Bank of New York, as Collateral Agent of Public Service Enterprise Group
Incorporated, as pledgee of Wachovia Bank, National Association, as the Purchase
Contract Agent on behalf of and as attorney-in-fact for the Holders."
"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.
"Corporate Unit" means the collective rights and obligations of a Holder
of a Corporate Units Certificate in respect of a Preferred Security, a Note or
an appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, subject in each case to the Pledge thereof, and the related
Purchase Contract; provided that the appropriate Applicable Ownership Interest
(as specified in clause (B) of the definition of such term) of the Treasury
Portfolio shall not be subject to the Pledge.
"Corporate Units Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Corporate Units
specified on such certificate.
"Obligations" means, with respect to each Holder, the collective reference
to all obligations and liabilities of such Holder under such Holder's Purchase
Contract, the Purchase
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Contract Agreement, and this Agreement or any other document made, delivered or
given in connection herewith or therewith, in each case whether on account of
principal, interest (including, without limitation, interest accruing before and
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to such Holder, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding), fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Company, the Purchase
Contract Agent, the Collateral Agent or the Securities Intermediary that are
required to be paid by the Holder pursuant to the terms of any of the foregoing
agreements).
"Permitted Investments" means any one of the following which shall mature
not later than the next succeeding Business Day:
(1) 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 of the timely payment thereof or such indebtedness
constitutes a general obligation of it);
(2) 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 $200.0 million at the time of deposit
(and which may include the Collateral Agent);
(3) 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 (2);
(4) repurchase agreements and reverse repurchase agreements relating
to marketable direct obligations issued or unconditionally guaranteed by
the United States Government or issued by any agency thereof and backed as
to timely payment by the full faith and credit of the United States
Government;
(5) 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");
(6) investments in money market funds (including, but not limited
to, money market funds managed by the Collateral Agent or an affiliate of
the Collateral Agent) registered under the Investment Company Act of 1940,
as amended, rated in the highest applicable rating category by S&P or
Moody's; and
(7) a cash escrow product offered by the Collateral Agent, which may
consist of trust funds, trust accounts or interest-bearing demand or time
deposits, including certificates of deposit, which are held by any
commercial bank having a short term deposit rating at the time of purchase
of at least "A-2" or the equivalent thereof by S&P or at least "P-2" or
the equivalent thereof by Moody's.
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"Person" means any legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Pledge" means the lien and security interest created by this Agreement.
"Pledged Applicable Ownership Interests" means the Applicable Ownership
Interests (as specified in clause (A) of the definition thereof) of the Holders
with respect to the Treasury Portfolio from time to time credited to the
Collateral Account and not then released from the Pledge.
"Pledged Notes" means Notes and security entitlements with respect thereto
from time to time credited to the Collateral Account and not then released from
the Pledge.
"Pledged Preferred Securities" means the Preferred Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.
"Preferred Securities" has the meaning specified in the paragraph
preceding the recitals of this Agreement.
"Pledged Securities" means the Pledged Preferred Securities, the Pledged
Applicable Ownership Interests, the Pledged Notes or the Pledged Treasury
Securities, collectively.
"Pledged Treasury Securities" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.
"Proceeds" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, cash, instruments, securities,
financial assets (as defined in ss.8-102(a)(9) of the UCC) and other property
received, receivable or otherwise distributed upon the sale, exchange,
collection or disposition of any financial assets from time to time held in the
Collateral Account.
"Purchase Contract Agent" has the meaning specified in the paragraph
preceding the recitals of this Agreement. "Separate Notes" means Notes which are
not components of Corporate Units.
"Separate Preferred Securities" means Preferred Securities which are not
components of Corporate Units.
"Stated Amount" has the meaning specified in the recitals of this
Agreement.
"TRADES" means the Treasury/Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.
5
"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 in the case of certificated securities in registered
form, delivery as provided in ss.8-301(a) of the UCC, endorsed to the transferee
or in blank by an effective endorsement; in the case of Treasury Securities,
registration of the transferee as the owner of such Treasury Securities on
TRADES; and in the case of security entitlements, including, without limitation,
security entitlements with respect to Treasury Securities, a securities
intermediary indicating by book entry that such security entitlement has been
credited to the transferee's securities account.
"Treasury Securities" means zero-coupon U.S. treasury securities (CUSIP
No. 000000XX0 or 000000XX0) which mature on November 15, 2005.
"Treasury Unit" means, following the substitution of Treasury Securities
for Preferred Securities or Notes as collateral to secure a Holder's obligations
under the Purchase Contract, the collective rights and obligations of a Holder
of a Treasury Units Certificate in respect of such Treasury Securities, subject
to the Pledge thereof, and the related Purchase Contract.
"Treasury Units Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Treasury Units specified on
such certificate.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York from time to time.
"Value" means, with respect to any item of Collateral on any date, as to
(1) Cash, the face amount thereof and (2) Treasury Securities or Notes, the
aggregate principal amount thereof at maturity and (3) Applicable Ownership
Interests, the appropriate percentage (as specified in clause (A) of the
definition thereof) of the aggregate principal amount at maturity of the
Treasury Portfolio and (4) the Preferred Securities, the liquidation amount
thereof.
ARTICLE 2
PLEDGE
SECTION 2.01. Pledge. Each Holder, acting through the Purchase Contract
Agent as such Holder's attorney-in-fact, hereby pledges and grants to the
Collateral Agent, as agent of and for the benefit of the Company, a continuing
first priority security interest in and to, and a lien upon and right of set-off
against, all of such Holder's right, title and interest in and to the Collateral
to secure the prompt and complete payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of the Obligations. The
Collateral Agent shall have all of the rights, remedies and recourses with
respect to the Collateral afforded a secured party by the UCC, in addition to,
and not in limitation of, the other rights, remedies and recourses afforded to
the Collateral Agent by this Agreement.
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SECTION 2.02. Control; Financing Statement.
(a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of Article 4 of this Agreement.
(b) Subsequent to the date of initial issuance of the Securities, the
Purchase Contract Agent shall deliver to the Collateral Agent a copy of the
financing statement prepared by the Company and filed in the Office of the
Secretary of State of the State of New York and any other jurisdictions which
the Company deems necessary, authorized by the Purchase Contract Agent to be
filed, as attorney-in-fact for the Holders, as Debtors, and describing the
Collateral, such filing to be undertaken by the Company.
SECTION 2.03. Termination. As to each Holder, this Agreement and the
Pledge created hereby shall terminate upon the satisfaction of such Holder's
Obligations. Upon written notice by the Company of such termination, the
Collateral Agent shall Transfer such Holder's portion of the Collateral to the
Purchase Contract Agent for distribution to such Holder in accordance with such
Holder's interest, free and clear of any lien, pledge or security interest
created hereby.
ARTICLE 3
DISTRIBUTIONS ON PLEDGED COLLATERAL
SECTION 3.01. Income Distributions. All income distributions received by
the Collateral Agent on account of the Pledged Preferred Securities, the Pledged
Applicable Ownership Interests of the Treasury Portfolio, the Pledged Notes or
Permitted Investments from time to time held in the Collateral Account shall be
distributed to the Purchase Contract Agent (at an account specified by the
Purchase Contract Agent) for the benefit of the applicable Holders as provided
in the Purchase Contracts or Purchase Contract Agreement. Notwithstanding
anything contained herein to the contrary, for the avoidance of doubt, the cash
payments at a rate of 6.25% per year (or in the event of deferred and unpaid
Distributions on the Pledged Preferred Securities or Pledged Notes, 10.25% per
year) of the Stated Amount per Corporate Unit to Holders of Corporate Units,
whether current or deferred, shall not be subject to the Pledge and therefore
are not part of the Collateral.
SECTION 3.02. Principal Payments Following Termination Event. All payments
received by the Collateral Agent following a Termination Event of (1) the
aggregate liquidation amount of Pledged Preferred Securities or securities
entitlements thereto, (2) the Applicable Ownership Interests (as specified in
clause (A) of the definition thereof) of the aggregate principal amount of the
Treasury Portfolio, (3) the aggregate principal amount of the Pledged Notes or
securities entitlements thereto, or (4) the principal amount of the Pledged
Treasury Securities, shall be distributed to the Purchase Contract Agent for the
benefit of the applicable Holders for distribution to such Holders in accordance
with their respective interests.
SECTION 3.03. Principal Payments Prior to or on Purchase Contract
Settlement Date.
(a) Subject to the provisions of Sections 5.06, 5.08 and 7.04, and except
as provided in Section 3.03(b) below, if no Termination Event shall have
occurred, all payments received by
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the Collateral Agent of (1) the aggregate liquidation amount with respect to the
Pledged Preferred Securities or security entitlements with respect thereto, (2)
the Applicable Ownership Interests (as specified in clause (A) of the definition
thereof) of the aggregate principal amount of the Treasury Portfolio, (3) the
aggregate principal amount with respect to the Pledged Notes or security
entitlements with respect thereto or (4) the principal amount of Pledged
Treasury Securities, shall be held and invested by the Collateral Agent in
Permitted Investments until the Purchase Contract Settlement Date and on the
Purchase Contract Settlement Date distributed to the Company as provided in
Section 5.07 hereof. Any balance remaining in the Collateral Account shall be
distributed to the Purchase Contract Agent for the benefit of the applicable
Holders for distribution to such Holders in accordance with their respective
interests. The Company shall instruct the Collateral Agent as to the type of
Permitted Investments in which any payments made under this Section shall be
invested, provided, however, that if the Company fails to deliver such
instructions by 10:30 a.m. (New York City time), the Collateral Agent shall
invest such payments in the Permitted Investments described in clause (7) of the
definition of Permitted Investments.
(b) All payments received by the Collateral Agent of (1) the aggregate
liquidation amount of Preferred Securities or security entitlements with respect
thereto, (2) the Applicable Ownership Interests (as specified in clause (A) of
the definition thereof) of the aggregate principal amount of the Treasury
Portfolio, (3) the aggregate principal amount with respect to the Notes or
security entitlements with respect thereto or (4) the principal amount of
Treasury Securities or security entitlements with respect thereto, that, in each
case, have been released from the Pledge shall be distributed to the Purchase
Contract Agent for the benefit of the applicable Holders for distribution to
such Holders in accordance with their respective interests.
SECTION 3.04. Payments to Purchase Contract Agent. The Collateral Agent
shall use all commercially reasonable efforts to deliver payments to the
Purchase Contract Agent hereunder to the account designated by the Purchase
Contract Agent for such purpose not later than 12:00 p.m. (New York City time)
on the Business Day such payment is received by the Collateral Agent; provided,
however, that if any such payment is received by the Collateral Agent on a day
that is not a Business Day or after 11:00 a.m. (New York City time) on a
Business Day, then the Collateral Agent shall use all commercially reasonable
efforts to deliver such payment to the Purchase Contract Agent no later than
10:30 a.m. (New York City time) on the next succeeding Business Day.
SECTION 3.05. Assets Not Properly Released. If the Purchase Contract Agent
or any Holder shall receive any principal payments on account of financial
assets credited to the Collateral Account and not released therefrom in
accordance with this Agreement, the Purchase Contract Agent or such Holder shall
hold the same as trustee of an express trust for the benefit of the Company and,
upon receipt of an Officers' Certificate of the Company so directing, promptly
deliver the same to the Collateral Agent for credit to the Collateral Account or
to the Company for application to the Obligations of the Holders, and the
Purchase Contract Agent and Holders shall acquire no right, title or interest in
any such payments of principal amounts so received.
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ARTICLE 4
CONTROL
SECTION 4.01. Establishment of Collateral Account. The Securities
Intermediary hereby confirms that:
(a) the Securities Intermediary has established the Collateral Account;
(b) the Collateral Account is a securities account;
(c) subject to the terms of this Agreement, the Securities Intermediary
shall identify in its records the Collateral Agent as the entitlement holder
entitled to exercise the rights that comprise any financial asset credited to
the Collateral Account;
(d) all property delivered to the Securities Intermediary pursuant to this
Agreement or the Purchase Contract Agreement will be credited promptly to the
Collateral Account; and
(e) all securities or other property underlying any financial assets
credited to the Collateral Account shall be registered in the name of the
Purchase Contract Agent and endorsed to the Securities Intermediary or in blank,
registered in the name of the Securities Intermediary or credited to another
securities account maintained in the name of the Securities Intermediary.
SECTION 4.02. Treatment as Financial Assets. 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.
SECTION 4.03. Sole Control by Collateral Agent. Except as provided in
Section 6.01, at all times prior to the termination of the Pledge, the
Collateral Agent shall have sole control of the Collateral Account, and the
Securities Intermediary shall take instructions and directions with respect to
the Collateral Account solely from the Collateral Agent. If at any time the
Securities Intermediary shall receive an entitlement order issued by the
Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Purchase Contract Agent or any Holder or any other Person. Until termination
of the Pledge, the Securities Intermediary will not comply with any entitlement
orders issued by the Purchase Contract Agent or any Holder.
SECTION 4.04. Securities Intermediary's Location. The Collateral Account,
and the rights and obligations of the Securities Intermediary, the Collateral
Agent, the Purchase Contract Agent and the Holders with respect thereto, shall
be governed by the laws of the State of New York. Regardless of any provision in
any other agreement, for purposes of the UCC, New York shall be deemed to be the
Securities Intermediary's location.
SECTION 4.05. No Other Claims. Except for the claims and interest of the
Collateral Agent and of the Purchase Contract Agent and the Holders in the
Collateral Account, the Securities Intermediary (without making any
investigation) does not know of any claim to, or interest in, the Collateral
Account or in any financial asset credited thereto. If any Person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against the Collateral
Account or in any financial asset
9
carried therein, the Securities Intermediary will promptly notify the Collateral
Agent and the Purchase Contract Agent in writing.
SECTION 4.06. Investment and Release. All proceeds of financial assets
from time to time deposited in the Collateral Account shall be invested and
reinvested as provided in this Agreement. At all times prior to termination of
the Pledge, no property shall be released from the Collateral Account except in
accordance with this Agreement or upon written instructions of the Collateral
Agent.
SECTION 4.07. Statements and Confirmations. The Securities Intermediary
will promptly send copies of all statements, confirmations and other
correspondence concerning the Collateral Account and any financial assets
credited thereto simultaneously to each of the Purchase Contract Agent and the
Collateral Agent at their addresses for notices under this Agreement.
SECTION 4.08. Tax Allocations. The Purchase Contract Agent shall file with
the Internal Revenue Service and deliver to the Holders Forms 1099 (or successor
or comparable forms), to the extent required by law, with respect to payments
received by the Holders. Neither the Securities Intermediary nor the Collateral
Agent shall have any tax reporting duties hereunder.
SECTION 4.09. No Other Agreements. The Securities Intermediary has not
entered into, and prior to the termination of the Pledge will not enter into,
any agreement with any other Person relating to the Collateral Account or any
financial assets credited thereto, including, without limitation, any agreement
to comply with entitlement orders of any Person other than the Collateral Agent.
SECTION 4.10. Powers Coupled with an Interest. The rights and powers
granted in this Article 4 to the Collateral Agent have been granted in order to
perfect its security interests in the Collateral Account, are powers coupled
with an interest and will be affected neither by the bankruptcy of the Purchase
Contract Agent or any Holder nor by the lapse of time. The obligations of the
Securities Intermediary under this Article 4 shall continue in effect until the
termination of the Pledge.
ARTICLE 5
INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY
UNITS AND REESTABLISHMENT OF CORPORATE UNITS
SECTION 5.01. Initial Deposit of Preferred Securities.
(a) Concurrently with the execution and delivery of this Agreement, the
Purchase Contract Agent, on behalf of the initial Holders of the Corporate
Units, shall Transfer to the Collateral Agent, for credit to the Collateral
Account, the Preferred Securities or security entitlements relating thereto, and
the Securities Intermediary shall indicate by book-entry that a securities
entitlement to such Preferred Securities has been credited to the Collateral
Account.
(b) Prior to any Event of Default, the Collateral Agent agrees to hold any
Preferred Securities or Notes or security interests relating thereto,
constituting a portion of the Collateral
10
registered in the name of the Purchase Contract Agent with appropriate
endorsement in the form delivered to it and shall not re-register such Preferred
Securities or Notes or security interests relating thereto.
SECTION 5.02. Establishment of Treasury Units.
(a) So long as the Treasury Portfolio has not replaced the Preferred
Securities as a component of Corporate Units as a result of a Successful Initial
Remarketing or a Tax Event Redemption and no dissolution or liquidation of the
Trust shall have occurred, at any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, a Holder of
Corporate Units shall have the right to establish or reestablish Treasury Units
by substitution of Treasury Securities or security entitlements with respect
thereto for the Pledged Preferred Securities comprising a part of such Holder's
Corporate Units in integral multiples of 20 Corporate Units by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Treasury Securities or security entitlements with
respect thereto having a Value equal to the aggregate liquidation amount
of the Pledged Preferred Securities to be released, accompanied by a
notice, substantially in the form of Exhibit C to the Purchase Contract
Agreement, whereupon the Purchase Contract Agent shall deliver to the
Collateral Agent a notice, substantially in the form of Exhibit A hereto,
(A) stating that such Holder has Transferred Treasury Securities or
security entitlements with respect thereto to the Collateral Agent for
credit to the Collateral Account, (B) stating the Value of the Treasury
Securities or security entitlements with respect thereto Transferred by
such Holder and (C) requesting that the Collateral Agent release from the
Pledge the Pledged Preferred Securities that are a component of such
Corporate Units; and
(ii) delivering the related Corporate Units to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Treasury Securities or
security entitlements with respect thereto have been credited to the Collateral
Account as described in such notice, the Collateral Agent shall instruct the
Securities Intermediary by a notice, substantially in the form of Exhibit B
hereto, to release such Pledged Preferred Securities from the Pledge by Transfer
to the Purchase Contract Agent for distribution to such Holder, free and clear
of any lien, pledge or security interest created hereby.
(b) If the Treasury Portfolio has replaced the Preferred Securities or
Notes as a component of Corporate Units as a result of a Successful Initial
Remarketing or a Tax Event Redemption on or at any time prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date, a
Holder of Corporate Units shall have the right to establish or reestablish
Treasury Units by substitution of Treasury Securities or security entitlements
with respect thereto for the Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio comprising
a part of such Holder's Corporate Units in integral multiples of Corporate Units
as will enable the U.S. Treasury securities comprising the Applicable Ownership
Interest of the Treasury Portfolio to be released in whole multiples by:
11
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Treasury Securities or security entitlements with
respect thereto having a Value equal to the Value of the Applicable
Ownership Interests (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio to be released, accompanied by a notice,
substantially in the form of Exhibit C to the Purchase Contract Agreement,
whereupon the Purchase Contract Agent shall deliver to the Collateral
Agent a notice, substantially in the form of Exhibit A hereto, (A) stating
that such Holder has Transferred Treasury Securities or security
entitlements with respect thereto to the Collateral Agent for credit to
the Collateral Account, (B) stating the Value of the Treasury Securities
or security entitlements with respect thereto Transferred by such Holder
and (C) requesting that the Collateral Agent release from the Pledge the
Pledged Applicable Ownership Interests of the Treasury Portfolio that are
a component of such Corporate Units; and
(ii) delivering the related Corporate Units to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Treasury Securities or
security entitlements with respect thereto have been credited to the Collateral
Account as described in such notice, the Collateral Agent shall instruct the
Securities Intermediary by a notice, substantially in the form of Exhibit B
hereto, to release such Pledged Applicable Ownership Interests of the Treasury
Portfolio from the Pledge by Transfer to the Purchase Contract Agent for
distribution to such Holder, free and clear of any lien, pledge or security
interest created hereby.
(c) If the Trust shall have been dissolved and liquidated and the Notes
have become a component of the Corporate Units and neither a Successful Initial
Remarketing nor a Tax Event Redemption Date shall have occurred, at any time on
or prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, a Holder of Corporate Units shall have the right to substitute
Treasury Securities or security entitlements with respect thereto for the
Pledged Notes comprising a part of such Holder's Corporate Units in integral
multiples of 20 Corporate Units by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Treasury Securities or security entitlements with
respect thereto having a Value equal to the aggregate principal amount of
the Pledged Notes to be released, accompanied by a notice, substantially
in the form of Exhibit C to the Purchase Contract Agreement, whereupon the
Purchase Contract Agent shall deliver to the Collateral Agent a notice,
substantially in the form of Exhibit A hereto, (A) stating that such
Holder has Transferred Treasury Securities or security entitlements with
respect thereto to the Collateral Agent for credit to the Collateral
Account, (B) stating the Value of the Treasury Securities or securities
entitlements with respect thereto Transferred by such Holder and (C)
requesting that the Collateral Agent release from the Pledge the Pledged
Notes that are a component of such Corporate Units; and
(ii) delivering the related Corporate Units to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Treasury Securities or
security entitlements with respect thereto have been credited to the Collateral
Account as described in
12
such notice, the Collateral Agent shall instruct the Securities Intermediary by
a notice, substantially in the form of Exhibit B hereto, to release such Pledged
Notes from the Pledge by Transfer to the Purchase Contract Agent for
distribution to such Holder, free and clear of any lien, pledge or security
interest created hereby.
SECTION 5.03. Reestablishment of Corporate Units.
(a) So long as the Treasury Portfolio has not replaced the Preferred
Securities as a component of Corporate Units as a result of a Successful Initial
Remarketing or a Tax Event Redemption and no dissolution or liquidation of the
Trust shall have occurred, at any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, a Holder of
Treasury Units shall have the right to reestablish Corporate Units by
substitution of Preferred Securities or security entitlements with respect
thereto for Pledged Treasury Securities in integral multiples of 20 Treasury
Units by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Preferred Securities or security entitlements with
respect thereto having a liquidation amount equal to the Value of the
Pledged Treasury Securities to be released, accompanied by a notice,
substantially in the form of Exhibit C to the Purchase Contract Agreement,
whereupon the Purchase Contract Agent shall deliver to the Collateral
Agent a notice, substantially in the form of Exhibit C hereto, stating
that such Holder has Transferred Preferred Securities or security
entitlements with respect thereto to the Collateral Agent for credit to
the Collateral Account and requesting that the Collateral Agent release
from the Pledge the Pledged Treasury Securities related to such Treasury
Units; and
(ii) delivering the related Treasury Units to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Preferred Securities or
security entitlements with respect thereto have been credited to the Collateral
Account as described in such notice, the Collateral Agent shall instruct the
Securities Intermediary by a notice in the form provided in Exhibit D hereto to
release such Pledged Treasury Securities from the Pledge by Transfer to the
Purchase Contract Agent for distribution to such Holder, free and clear of any
lien, pledge or security interest created hereby.
(b) If the Treasury Portfolio has replaced the Preferred Securities or
Notes as a component of Corporate Units as a result of a Successful Initial
Remarketing or a Tax Event Redemption on or at any time prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date, a
Holder of Treasury Units shall have the right to reestablish Corporate Units by
substitution of Treasury Securities or security entitlements with respect
thereto for the Applicable Ownership Interests (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio comprising a part of such
Holder's Treasury Units in integral multiples of Treasury Units as will enable
the U.S. Treasury securities comprising the Applicable Ownership Interest of the
Treasury Portfolio to be purchased in whole multiples by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Applicable Ownership Interests (as specified in clause
(A) of the definition of such term)
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of the Treasury Portfolio having a Value equal to the Treasury Securities
or security entitlements with respect thereto to be released, accompanied
by a notice, substantially in the form of Exhibit C to the Purchase
Contract Agreement, whereupon the Purchase Contract Agent shall deliver to
the Collateral Agent a notice, substantially in the form of Exhibit C
hereto, (A) stating that such Holder has Transferred Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio to the Collateral Agent for credit to the
Collateral Account, (B) stating the Value of the Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio Transferred by such Holder and (C) requesting that
the Collateral Agent release from the Pledge the Treasury Securities or
security entitlements with respect thereto that are a component of such
Treasury Units; and
(ii) delivering the related Treasury Units to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that the Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio have been credited to the Collateral Account as described in
such notice, the Collateral Agent shall instruct the Securities Intermediary by
a notice, substantially in the form of Exhibit D hereto, to release the Treasury
Securities or security entitlements with respect thereto from the Pledge by
Transfer to the Purchase Contract Agent for distribution to such Holder, free
and clear of any lien, pledge or security interest created hereby.
(c) If the Trust shall have been dissolved and liquidated and the Notes
have become a component of the Corporate Units and neither a Successful Initial
Remarketing nor a Tax Event Redemption Date shall have occurred, at any time on
or prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, a Holder of Treasury Units shall have the right to reestablish
Corporate Units by substitution of Notes or security entitlements with respect
thereto for Pledged Treasury Securities in integral multiples of 20 Treasury
Units by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Notes or security entitlements with respect thereto
having a principal amount equal to the Value of the Pledged Treasury
Securities to be released, accompanied by a notice, substantially in the
form of Exhibit C to the Purchase Contract Agreement, whereupon the
Purchase Contract Agent shall deliver to the Collateral Agent a notice,
substantially in the form of Exhibit C hereto, stating that such Holder
has Transferred the Notes or security entitlements with respect thereto to
the Collateral Agent for credit to the Collateral Account and requesting
that the Collateral Agent release from the Pledge the Pledged Treasury
Securities related to such Treasury Units; and
(ii) delivering the related Treasury Units to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Notes or security
entitlements with respect thereto have been credited to the Collateral Account
as described in such notice, the Collateral Agent shall instruct the Securities
Intermediary by a notice in the form provided in Exhibit D to release such
Pledged Treasury Securities from Pledge by Transfer to the Purchase
14
Contract Agent for distribution to such Holder, free and clear of any lien,
pledge or security interest created hereby.
SECTION 5.04. Termination Event.
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that a Termination Event has occurred,
the Collateral Agent shall release all Collateral from the Pledge and shall
promptly Transfer:
(i) any Pledged Preferred Securities or security entitlements with
respect thereto, the Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio (if
the Treasury Portfolio has become a component of the Corporate Units as a
result of a Successful Initial Remarketing or Tax Event Redemption) or the
Pledged Notes or security entitlements with respect thereto (if the Trust
has been dissolved and liquidated, and the Notes or security entitlements
with respect thereto have become a component of the Corporate Units);
(ii) any Pledged Treasury Securities; and
(iii) payments by Holders or the Permitted Investments of such
payments pursuant to Section 5.05 hereof,
to the Purchase Contract Agent for the benefit of the Holders for distribution
to such Holders in accordance with their respective interests, free and clear of
any lien, pledge or security interest or other interest created hereby;
provided, however, if any Holder shall be entitled to receive less than $1,000
with respect to his interest in the Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, the
Purchase Contract Agent shall have the right but not the obligation to dispose
of such interest for cash and deliver to such Holder cash in lieu of delivering
the Applicable Ownership Interests (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio.
(b) If such Termination Event shall result from the Company becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Preferred Securities, the Applicable Ownership Interests (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, the Pledged
Notes, the Pledged Treasury Securities or payments by Holders or the Permitted
Investments of such payments pursuant to Section 5.05 hereof, as the case may
be, as provided by this Section 5.04, the Purchase Contract Agent shall, subject
to Section 7.01(b)(3):
(i) use its best efforts to obtain an opinion of a nationally
recognized law firm reasonably acceptable to the Collateral Agent to the
effect that, as a result of the Company 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 5.04,
and shall deliver such opinion to the Collateral Agent within ten days
after the occurrence of such Termination Event, and if (A) the Purchase
Contract Agent shall be unable to obtain such opinion within ten days
after the occurrence of such Termination Event or (B) the Collateral Agent
shall continue, after delivery of such opinion, to refuse to effectuate
the release and Transfer of all Pledged Preferred Securities, Applicable
15
Ownership Interests (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio, Pledged Notes, Pledged Treasury
Securities, the payments by Holders or the Permitted Investments of such
payments pursuant to Section 5.05 hereof or the Proceeds of any of the
foregoing, as the case may be, as provided in this Section 5.04, then the
Purchase Contract Agent shall, within fifteen days after the occurrence of
such Termination Event commence an action or proceeding in the court
having jurisdiction of the Company's case under the Bankruptcy Code
seeking an order requiring the Collateral Agent to effectuate the release
and transfer of all Pledged Preferred Securities, Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio, Pledged Notes, Pledged Treasury Securities, or the
payments by Holders or the Permitted Investments of such payments pursuant
to Section 5.05 hereof, or as the case may be, as provided by this Section
5.04; or
(ii) commence an action or proceeding like that described in clause
Section 5.04(b)(i) hereof within ten days after the occurrence of such
Termination Event.
SECTION 5.05. Cash Settlement.
(a) Upon receipt by the Collateral Agent of (1) a notice from the Purchase
Contract Agent promptly after the receipt by the Purchase Contract Agent of a
notice from a Holder of Corporate Units that such Holder has elected, in
accordance with the procedures specified in Section 5.02(b)(i) or (e)(i) of the
Purchase Contract Agreement, respectively, to effect a Cash Settlement and (2)
payment by such Holder by deposit in the Collateral Account prior to 11:00 a.m.
(New York City time) on the Business Day immediately preceding the Purchase
Contract Settlement Date of the Purchase Price in lawful money of the United
States by certified or cashier's check or wire transfer of immediately available
funds payable to or upon the order of the Securities Intermediary, then the
Collateral Agent shall:
(i) instruct the Securities Intermediary promptly to invest any such
Cash in Permitted Investments;
(ii) release from the Pledge the Corporate Unit Holder's or the
Treasury Unit Holder's related Pledged Preferred Securities, Applicable
Ownership Interests (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio, Pledged Notes or Pledged Treasury
Securities, as applicable, as to which such Holder has elected to effect a
Cash Settlement pursuant to this Section 5.05(a); and
(iii) instruct the Securities Intermediary to Transfer all such
Pledged Preferred Securities, Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio,
Pledged Notes or Pledged Treasury Securities, as the case may be, to the
Purchase Contract Agent for the benefit of such Holder, in each case free
and clear of the Pledge created hereby, for distribution to such Holder.
The Company shall instruct the Collateral Agent in writing as to the type
of Permitted Investments in which any such Cash shall be invested; provided,
however, that if the Company fails to deliver such written instructions by 10:30
a.m. (New York City time), the Securities
16
Intermediary shall invest such Cash in the Permitted Investments described in
clause (7) of the definition of Permitted Investments.
Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Purchase Contract Settlement Date, the Collateral Agent shall
in respect of each Purchase Contract settled pursuant to Section 5.02(b)(i) or
(e)(i) of the Purchase Contract Agreement (A) instruct the Securities
Intermediary to pay the portion of such proceeds and deliver any certified or
cashier's checks received, in an amount equal to the Purchase Price, to the
Company on the Purchase Contract Settlement Date, and (B) instruct the
Securities Intermediary to release any amounts in excess of the Purchase Price
earned from such Permitted Investments to the Purchase Contract Agent for
distribution to such Holder.
(b) If a Holder of Corporate Units (unless a Tax Event Redemption Date or
a Successful Initial Remarketing shall have occurred) fails to notify the
Purchase Contract Agent of its intention to make a Cash Settlement as provided
in paragraph 5.02(b)(i) of the Purchase Contract Agreement, such Holder shall be
deemed to have consented to the disposition of such Holder's Pledged Preferred
Securities or Pledged Notes, as the case may be, in accordance with paragraph
5.02(b)(iii) of the Purchase Contract Agreement.
(c) If a Holder of a Corporate Unit (if a Tax Event Redemption Date or a
Successful Initial Remarketing shall have occurred) or a Holder of a Treasury
Unit (i) fails to notify the Purchase Contract Agent of its intention to make a
Cash Settlement as provided in paragraph 5.02(e)(i) of the Purchase Contract
Agreement or (ii) does notify the Purchase Contract Agent as provided in
paragraph 5.02(e)(ii) of the Purchase Contract Agreement of its intention to pay
the Purchase Price in cash, but fails to make such payment as required by
paragraph 5.02(e)(ii) of the Purchase Contract Agreement, such Holder shall be
deemed to have elected to pay the Purchase Price in accordance with paragraph
5.02(e)(iii) of the Purchase Contract Agreement.
(d) As soon as practicable after 11:00 a.m. (New York City time) on the
Business Day immediately preceding the Purchase Contract Settlement Date, the
Collateral Agent shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit E hereto, stating (i) the amount of Cash
that it has received with respect to the Cash Settlement of Corporate Units and
(ii) the amount of Cash that it has received with respect to the Cash Settlement
of Treasury Units.
SECTION 5.06. Early Settlement. Upon receipt by the Collateral Agent of a
notice from the Purchase Contract Agent that a Holder of Securities has elected
to effect Early Settlement of its obligations under the Purchase Contracts
forming a part of such Securities in accordance with the terms of the Purchase
Contracts and Section 5.07 or Section 5.04(b)(2) (in case of an early settlement
upon a Cash Merger) of the Purchase Contract Agreement (which notice shall set
forth the number of such Purchase Contracts as to which such Holder has elected
to effect Early Settlement), and that the Purchase Contract Agent has received
from such Holder, and paid to the Company as confirmed in writing by the
Company, the related Early Settlement Amounts or Purchase Price (if such Early
Settlement is pursuant to Section 5.04(b)(2) of the Purchase Contract Agreement)
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
17
Collateral Agent shall release from the Pledge, (1) Pledged Preferred
Securities, appropriate Applicable Ownership Interests (as specified in clause
(A) of the definitions at such term) of the Treasury Portfolio or Pledged Notes
in the case of a Holder of Corporate Units or (2) Pledged Treasury Securities,
in the case of a Holder of Treasury Units, in each case with a Value equal to
the product of (x) the Stated Amount times (y) the number of Purchase Contracts
as to which such Holder has elected to effect Early Settlement, and shall
instruct the Securities Intermediary to Transfer all such Pledged Preferred
Securities, appropriate Applicable Ownership Interests (as specified in clause
(A) of the definitions at such term) of the Treasury Portfolio, Pledged Notes or
Pledged Treasury Securities, as the case may be, to the Purchase Contract Agent
for the benefit of such Holder, in each case free and clear of the Pledge
created hereby, for distribution to such Holder. A Treasury Unit Holder may
settle early only in integral multiples of 20 Purchase Contracts and a Corporate
Unit Holder, if a Tax Event Redemption Date or a Successful Initial Remarketing
has occurred, may settle early only in such integral multiples of Purchase
Contracts as will enable the U.S. Treasury securities comprising the Applicable
Ownership Interest of the Treasury Portfolio to be released in whole multiples.
SECTION 5.07. Application of Proceeds in Settlement of Purchase Contracts.
(a) If a Holder of Corporate Units (unless a Successful Initial
Remarketing or a Tax Event Redemption has occurred) has not elected to make an
effective Cash Settlement by notifying the Purchase Contract Agent in the manner
provided for in Section 5.02(b)(i) of the Purchase Contract Agreement, such
Holder shall be deemed to have elected to pay for the shares of Common Stock to
be issued under such Purchase Contracts from the Proceeds of the Remarketing of
the related Pledged Preferred Securities or Pledged Notes. Upon written notice
of such event from the Purchase Contract Agent, the Collateral Agent shall
instruct the Securities Intermediary to Transfer the related Pledged Preferred
Securities or Pledged Notes to the Remarketing Agent for Remarketing. Upon
receiving such Pledged Preferred Securities or Pledged Notes, the Remarketing
Agent, pursuant to the terms of the Remarketing Agreement, will use reasonable
efforts to Remarket such Pledged Preferred Securities or Pledged Notes. The
Remarketing Agent will deposit the Proceeds of such Secondary Remarketing (less,
to the extent permitted by the Remarketing Agreement, the Remarketing Fee) in
the Collateral Account, and the Collateral Agent shall invest the Proceeds of
the Remarketing in Permitted Investments set forth in clause (7) of the
definition of Permitted Investments, unless prior to 10:30 a.m. (New York City
time), the Company shall otherwise instruct the Collateral Agent as to the type
of Permitted Investments in which any such Proceeds shall be invested. On the
Purchase Contract Settlement Date, the Purchase Contract Agent shall give
written direction to the Collateral Agent specifying the instruction the
Collateral Agent shall give to the Securities Intermediary in order to apply a
portion of the Proceeds from such Remarketing equal to the aggregate liquidation
amount of the Preferred Securities or aggregate principal amount of such Pledged
Notes to satisfy in full such Holder's obligations to pay the Purchase Price to
purchase the shares of Common Stock under the related Purchase Contracts and the
balance of the Proceeds from the Remarketing, if any, that shall be transferred
to the Purchase Contract Agent for the benefit of such Holder for distribution
to such Holder.
If (i) the Remarketing Agent advises the Collateral Agent in writing that
there has been a Failed Secondary Remarketing or (ii) a Holder of Corporate
Units has given notice of its intention to make a Cash Settlement in the manner
provided for in Section 5.02(b)(i) of the
18
Purchase Contract Agreement, but failed to deliver the required cash prior to
11:00 a.m. (New York City time) on the Business Day immediately preceding the
Purchase Contract Settlement Date, thus, in each case, resulting in an event of
default under the Purchase Contract Agreement and hereunder, the Collateral
Agent, for the benefit of the Company shall, at the written direction of the
Company, exercise its rights as a secured party with respect to the Pledged
Notes and use commercially reasonable efforts to dispose of the Pledged Notes in
accordance with applicable law and apply the proceeds from such disposition in
full satisfaction of such Holder's obligations to pay the Purchase Price for the
shares of Common Stock.
(b) If a Holder of Corporate Units (if a Tax Event Redemption or a
Successful Initial Remarketing has occurred) or a Holder of Treasury Units has
not elected to make an effective Cash Settlement by notifying the Purchase
Contract Agent in the manner provided for in Section 5.02(e)(i) of the Purchase
Contract Agreement, or has given such notice but failed to make such payment in
the manner required by Section 5.02(e)(ii) of the Purchase Contract Agreement,
such Holder shall be deemed to have elected to pay for the shares of Common
Stock to be issued under such Purchase Contracts from the Proceeds of the
related Pledged Treasury Securities or such Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be. Promptly, after 11:00 a.m. (New York City time)
on the Business Day immediately prior to the Purchase Contract Settlement Date,
the Collateral Agent shall invest the Cash Proceeds of the maturing Pledged
Treasury Securities or such Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, in Permitted Investments set forth in clause (7) of the definition
of Permitted Investments, unless prior to 10:30 a.m. (New York City time), the
Company shall otherwise instruct the Collateral Agent as to the type of
Permitted Investments in which any such Cash Proceeds shall be invested. Without
receiving any instruction from any such Holder, the Collateral Agent shall apply
the Proceeds of the related Pledged Treasury Securities or such Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as the case may be, 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 such
Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio as the case may be, and the investment
earnings from the investment in Permitted Investments exceeds the aggregate
Purchase Price of the Purchase Contracts being settled thereby, the Collateral
Agent shall instruct the Securities Intermediary to distribute such excess, when
received, to the Purchase Contract Agent for the benefit of such Holder for
distribution to such Holder.
(c) Under the Remarketing Agreement and subject to the terms of any
supplemental Remarketing Agreement, on or prior to the second Business Day
immediately preceding the Initial Remarketing Date or the Secondary Remarketing
Date, as the case may be, but no earlier than the Payment Date immediately
preceding the Initial Remarketing Date or the Secondary Remarketing Date,
Holders of Separate Preferred Securities or Separate Notes, as the case may be,
may elect to have their Separate Preferred Securities or Separate Notes, as the
case may be, remarketed by delivering their Separate Preferred Securities or
Separate Notes, as the case may be, along with a notice of such election,
substantially in the form of Exhibit F hereto, to the Custodial Agent. The
Custodial Agent shall hold Separate Preferred Securities or Separate Notes, as
19
the case may be, in an account separate from the Collateral Account in which the
Pledged Securities shall be held. Holders of Separate Preferred Securities or
Separate Notes, as the case may be, electing to have their Separate Preferred
Securities or Separate Notes, as the case may be, remarketed will also have the
right to withdraw that election by written notice to the Custodial Agent,
substantially in the form of Exhibit G hereto, on or prior to the second
Business Day immediately preceding the Initial Remarketing Date or the Secondary
Remarketing Date, as applicable, upon which notice the Custodial Agent shall
return such Separate Notes to such Holder.
On or prior to 11:00 a.m. on the Business Day immediately preceding the
Initial Remarketing Date or the Secondary Remarketing Date, as applicable, the
Custodial Agent shall notify the Remarketing Agent of the aggregate liquidation
amount of the Separate Preferred Securities or the aggregate principal amount of
the Separate Notes, as the case may be, to be remarketed and will deliver to the
Remarketing Agent for Remarketing all Separate Preferred Securities or Separate
Notes, as the case may be, delivered to the Custodial Agent pursuant to this
Section 5.07(c) and not withdrawn pursuant to the terms hereof prior to such
date. After deducting the Remarketing Fee to the extent permitted under the
terms of the Remarketing Agreement, the Remarketing Agent will remit to the
Custodial Agent the remaining portion of the proceeds of such Remarketing for
the benefit of such Holders. In the event of a Failed Initial Remarketing or a
Failed Secondary Remarketing, the Remarketing Agent will promptly return such
Separate Preferred Securities or Separate Notes, as the case may be, to the
Custodial Agent for redelivery to such Holders.
SECTION 5.08. Tax Event Redemption. If the Collateral Agent receives
written notice that a Tax Event Redemption Date has occurred while the Preferred
Securities or Notes are still credited to the Collateral Account, the Collateral
Agent shall apply the Redemption Amount to purchase the Treasury Portfolio from
the Quotation Agent and the Collateral Agent shall credit the Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio to the Collateral Account and shall transfer the
Applicable Ownership Interests (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio to the Purchase Contract Agent for the
benefit of the Holders of the Corporate Units. Upon credit to the Collateral
Account of the Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio having a Value equal to the
liquidation amount of the Pledged Preferred Securities or the aggregate
principal amount of the Pledged Notes, the Collateral Agent shall cause the
Securities Intermediary to release the Pledged Preferred Securities or the
Pledged Notes, as applicable, from the Collateral Account and to promptly
transfer the Pledged Preferred Securities or Pledged Notes, as the case may be,
to the Company.
ARTICLE 6
VOTING RIGHTS - PLEDGED PREFERRED SECURITIES AND PLEDGED NOTES
SECTION 6.01. Voting Rights. The Purchase Contract Agent may exercise, or
refrain from exercising, any and all voting and other consensual rights
pertaining to the Pledged Preferred Securities or the Pledged Notes or any part
thereof for any purpose not inconsistent with the terms of this Agreement and in
accordance with Section 4.02 of the Purchase Contract Agreement; provided, that
the Purchase Contract Agent shall give the Company and the Collateral Agent at
least five Business Days' prior written notice of the manner in which it intends
to exercise, or its reasons for refraining from exercising, any such right. Upon
receipt of any notices and other communications in respect of any Pledged
Preferred Securities or the
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Pledged Notes, including notice of any meeting at which holders of the Preferred
Securities or the Notes are entitled to vote or solicitation of consents,
waivers or proxies of holders of the Preferred Securities or Notes, the
Collateral Agent shall use reasonable efforts to send promptly to the Purchase
Contract Agent such notice or communication, and as soon as reasonably
practicable after receipt of a written request therefor from the Purchase
Contract Agent, execute and deliver to the Purchase Contract Agent such proxies
and other instruments in respect of such Pledged Preferred Securities or the
Pledged Notes (in form and substance satisfactory to the Collateral Agent) as
are delivered by the Purchase Contract Agent with respect to the Pledged
Preferred Securities or the Pledged Notes.
ARTICLE 7
RIGHTS AND REMEDIES
SECTION 7.01. Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies specified in Section 5.07
hereof or otherwise available at law or in equity, after an event of default (as
specified in Section 7.01(b) below) hereunder, the Collateral Agent shall have
all of the rights and remedies with respect to the Collateral of a secured party
under the UCC (whether or not the UCC 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. Without limiting the generality of the foregoing, such remedies may
include, to the extent permitted by applicable law, (1) retention of the Pledged
Preferred Securities, Pledged Notes, Pledged Treasury Securities or the
appropriate Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio in full satisfaction of the
Holders' obligations under the Purchase Contracts and the Purchase Contract
Agreement or (2) sale of the Pledged Preferred Securities, Pledged Notes,
Pledged Treasury Securities or the appropriate Applicable Ownership Interests
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, or on account of principal payments of any Pledged
Treasury Securities as provided in Article 3 hereof, in satisfaction of the
Obligations of the Holder of the Securities of which such Pledged Applicable
Ownership Interests or such Pledged Treasury Securities, as applicable, are 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
Pledged Applicable Ownership Interests of the Treasury Portfolio, as applicable,
any and all of the rights and remedies available to a secured party under the
UCC and the TRADES Regulations after default by a debtor, and as otherwise
granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the liquidation amount of
the Pledged Preferred Securities, (ii) the principal
21
amount of the Pledged Notes, (iii) the principal amount of the Pledged Treasury
Securities and (iv) the principal amount of the Pledged Applicable Ownership
Interests, subject, in each case, to the provisions of Article 3 hereof, and as
otherwise granted herein.
(d) The Purchase Contract Agent and each Holder of Securities agrees that,
from time to time, upon the written request of the Collateral Agent or the
Purchase Contract Agent, 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 or any other
third party for executing any documents or taking any such acts requested by the
Collateral Agent hereunder, except for liability for its own negligent acts, its
own negligent failure to act or its own willful misconduct.
SECTION 7.02. Substitution of Notes or Treasury Portfolio. If the Trust
shall have been dissolved and liquidated prior to the Purchase Contract
Settlement Date, the Purchase Contract Agent shall Transfer to the Collateral
Agent Notes having a Value equal to the liquidation amount of the Pledged
Preferred Securities for credit to the Collateral Account. Upon credit to the
Collateral Account of such Notes, the Collateral Agent shall release the Pledged
Preferred Securities from the Collateral Account and shall promptly transfer the
same to the Purchase Contract Agent.
Notwithstanding the foregoing, in the event of a dissolution and
liquidation of the Trust, if a Liquidation Distribution is to be distributed in
lieu of the Notes as provided for in the Declaration, the Liquidation
Distribution shall be credited to the Collateral Account by the Property
Trustee, on or prior to 12:30 p.m., New York City time, on the date of
distribution of the Liquidation Distribution, by federal funds check or wire
transfer of immediately available funds. The Collateral Agent is hereby
authorized to present the Pledged Preferred Securities for payment as may be
required by their terms. Upon receipt of such funds, the Pledged Preferred
Securities shall be released from the Collateral Account. In the event such
funds are credited to the Collateral Account, the Collateral Agent, at the
written direction of the Company, shall instruct the Securities Intermediary to
(a) apply an amount equal to the Redemption Amount of such Liquidation
Distribution to purchase the Treasury Portfolio from the Quotation Agent for
credit to the Collateral Account and (b) promptly remit the remaining portion of
such Liquidation Distribution, if any, to the Purchase Contract Agent for
payment to the Holders of Corporate Units. To the extent that the Treasury
Portfolio is purchased pursuant to the preceding sentence, the Treasury
Portfolio shall replace the Preferred Securities as Collateral as and to the
extent that the Proceeds from such Liquidation Distribution were Proceeds from a
Tax Event Redemption or Succeeding Initial Remarketing for all purposes under
this Agreement and the Purchase Contract Agreement. To the extent that the
Proceeds from such Liquidation Distribution are not sufficient to purchase the
Treasury Portfolio, the Collateral Agent shall invest such Proceeds in Permitted
Investments set forth in clause (7) of the definition of Permitted Investments.
SECTION 7.03. Tax Event Redemption. Upon the occurrence of a Tax Event
Redemption Date while Preferred Securities or Notes are still credited to the
Collateral Account, the Redemption Amount, plus any accumulated and unpaid
distributions, or any accrued and unpaid interest, as the case may be, payable
on the Tax Event Redemption Date with respect to the Applicable Principal Amount
shall be credited to the Collateral Account by the Property
22
Trustee or, in case there has been a dissolution of the Trust and the
distribution of the related Notes, by the Indenture Trustee, on or prior to
12:30 p.m., New York City time on such Tax Event Redemption Date, by federal
funds check or wire transfer of immediately available funds. The Collateral
Agent is hereby authorized to present the Pledged Preferred Securities or the
Pledged Notes for payment as may be required by their respective terms. Upon
receipt of such funds, the Pledged Preferred Securities or Pledged Notes, as the
case may be, shall be released from the Collateral Account. In the event such
funds are credited to the Collateral Account, the Collateral Agent, at the
written direction of the Company, shall instruct the Securities Intermediary to
(a) apply an amount equal to the Redemption Amount of such funds to purchase the
Treasury Portfolio from the Quotation Agent for credit to the Collateral Account
and (b) promptly remit the remaining portion of such funds, if any, to the
Purchase Contract Agent for payment to the Holders of Corporate Units.
SECTION 7.04. Initial Remarketing. Upon notice from the Company of the
Initial Remarketing Date, the Collateral Agent shall, by 11:00 a.m., New York
City time, on the Business Day immediately preceding the Initial Remarketing
Date, without any instruction from any Holder of Corporate Units, present the
related Pledged Preferred Securities or Pledged Notes, as the case may be, to
the Remarketing Agent for remarketing. Upon receiving such Pledged Preferred
Securities or Pledged Notes and any Separate Preferred Securities or Separate
Notes duly presented for remarketing pursuant to Section 5.02(a)(i) of the
Purchase Contract Agreement, the Remarketing Agent, pursuant to the terms of the
Remarketing Agreement, will use its reasonable efforts to remarket such
Preferred Securities or Notes on the Initial Remarketing Date at a price of
approximately 100.25% (but not less than 100%) of the Treasury Portfolio
Purchase Price, the Separate Preferred Securities or Notes Purchase Price, plus
deferred and unpaid distributions or interest, if any, on the Preferred
Securities or Notes. After deduction as the Remarketing Fee of an amount not
exceeding 25 basis points (.25%) of the sum of the Treasury Portfolio Purchase
Price, the Separate Preferred Securities or Notes Purchase Price and deferred
and unpaid distributions or interest, if any, on the Preferred Securities or
Notes from any amount of such Proceeds in excess of the sum of Treasury
Portfolio Purchase Price, the Separate Preferred Securities or Notes Purchase
Price, and deferred and unpaid distributions or interest, if any, on the
Preferred Securities or Notes, the Remarketing Agent will remit the entire
amount of the Proceeds of such Remarketing of the Pledged Securities or Pledged
Notes to the Collateral Agent on or prior to 12:00 p.m., New York City time, on
the Initial Reset Date by check or wire transfer in immediately available funds
at such place and at such account as may be designated by the Collateral Agent
in exchange for the Pledged Preferred Securities or Pledged Notes. In the event
the Collateral Agent receives such Proceeds, the Collateral Agent will, at the
written direction of the Company, apply an amount equal to the Treasury
Portfolio Purchase Price to purchase from the Quotation Agent the Treasury
Portfolio and promptly remit the remaining portion of such Proceeds to the
Purchase Contract Agent for payment to the Holders of Corporate Units. The
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account
to secure the obligation of all Holders of Corporate Units to purchase Common
Stock of the Company under the Purchase Contracts constituting a part of such
Corporate Units, in substitution for the Pledged Preferred Securities or Pledged
Notes, which shall be released from the Collateral Account. With respect to the
Separate Preferred Securities or Notes, any proceeds of the Initial Remarketing
in excess of the Remarketing Fee attributable to the Separate Preferred
Securities or Notes will be remitted to the Custodial Agent for payment to the
holders of Separate Preferred Securities or Notes. In the event of a Failed
Initial
23
Remarketing, the Preferred Securities or Notes presented to the Remarketing
Agent pursuant to this Section 7.03 for Remarketing shall be redeposited into
the Collateral Account.
SECTION 7.05. Substitutions. Whenever a Holder has the right to substitute
Treasury Securities, Preferred Securities, Notes or security entitlements for
any of them or the appropriate Applicable Ownership Interests of the Treasury
Portfolio, as the case may be, for financial assets held in the Collateral
Account, such substitution shall not constitute a novation of the security
interest created hereby.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 8.01. Representations and Warranties. Each Holder from time to
time, acting through the Purchase Contract Agent as 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 represents
and warrants to the Collateral Agent (with respect to such Holder's interest in
the Collateral), 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 for credit to the Collateral
Account, free and clear of any security interest, lien, encumbrance, call,
liability to pay money or other restriction other than the security interest and
lien granted under Article 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral Agent for credit
to the Collateral Account, the Collateral Agent, for the benefit of the Company,
will have a valid and perfected first priority security interest therein
(assuming that any central clearing operation or any securities intermediary or
other entity not within the control of the Holder involved in the Transfer of
the Collateral, including the Collateral Agent and the Securities Intermediary,
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 Article 4 hereof); and
(d) the execution and performance by the Holder of its obligations under
this Agreement will not result in the creation of any security interest, lien or
other encumbrance on the Collateral other than the security interest and lien
granted under Article 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 8.02. 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:
24
(a) neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other security interest whatsoever over the Collateral or any part of it other
than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the Pledge hereunder,
transferred in connection with the Transfer of the Securities.
ARTICLE 9
THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES INTERMEDIARY
It is hereby agreed as follows:
SECTION 9.01. Appointment, Powers and Immunities. The Collateral Agent,
the Custodial Agent or the Securities Intermediary shall act as agent for the
Company hereunder with such powers as are specifically vested in the Collateral
Agent, the Custodial Agent or the Securities Intermediary, as the case may be,
by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. The Collateral Agent, Custodial Agent and
Securities Intermediary shall:
(a) 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 the Collateral Agent, Custodial Agent and Securities
Intermediary, nor shall the Collateral Agent, Custodial Agent and Securities
Intermediary be bound by the provisions of any agreement by any party hereto
beyond the specific terms hereof;
(b) 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 (other than
as against the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be) or sufficiency of this Agreement, the
Securities or the Purchase Contract Agreement or any other document referred to
or provided for herein or therein or for any failure by the Company or any other
Person (except the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be) to perform any of its obligations hereunder or
thereunder or for the perfection, priority or, except as expressly required
hereby, maintenance of any security interest created hereunder;
(c) not be required to initiate or conduct any litigation or collection
proceedings hereunder (except pursuant to written directions furnished under
Section 9.02 hereof, subject to Section 9.06 hereof);
(d) 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
25
(e) not be required to advise any party as to selling or retaining, or
taking or refraining from taking any action with respect to, any 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,
Custodial Agent or 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 or Securities Intermediary be
liable for any amount in excess of the Value of the Collateral. Notwithstanding
the foregoing, each of the Collateral Agent and the Securities Intermediary in
its individual capacity hereby waives any right of setoff, bankers' lien, liens
or perfection rights as securities intermediary or any counterclaim with respect
to any of the Collateral.
SECTION 9.02. Instructions of the Company. The Company shall have the
right, by one or more written instruments executed and delivered to the
Collateral Agent, 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,
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 shall have received indemnity satisfactory to it as provided herein.
Nothing contained in this Section 9.02 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 9.03. Reliance. Each of the Securities Intermediary, the Custodial
Agent and the Collateral Agent shall be entitled to conclusively rely upon any
certification, order, judgment, opinion, notice or other written communication
(including, without limitation, any thereof by e-mail or similar electronic
means, 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 consult with and rely upon advice, opinions and statements of legal counsel
and other experts selected by the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be. As to any matters not expressly
provided for by this Agreement, the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall in all cases be fully protected in acting, or
in refraining from acting, hereunder in accordance with instructions given by
the Company in accordance with this Agreement.
SECTION 9.04. Rights in Other Capacities. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any other Person
interested herein 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
26
Agent, 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 other
than the lien created by the Pledge.
SECTION 9.05. Non-Reliance. None of the Securities Intermediary, the
Custodial Agent or the Collateral Agent shall be required to keep itself
informed as to the performance or observance by the Purchase Contract Agent or
any Holder of Securities of this Agreement, the Purchase Contract Agreement, the
Securities or any other document referred to or provided for herein or therein
or to inspect the properties or books of the Purchase Contract Agent or any
Holder of Securities. None of the Collateral Agent, the Custodial Agent or the
Securities Intermediary shall 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 9.06. Compensation and Indemnity. The Company agrees to:
(a) pay the Collateral Agent, the Custodial Agent and the Securities
Intermediary from time to time such compensation as shall be agreed in writing
between the Company and the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, for all services rendered by them
hereunder;
(b) indemnify and hold harmless the Collateral Agent, the Custodial Agent
and the Securities Intermediary and each of their respective directors,
officers, agents and employees (collectively, the "Indemnitees"), harmless from
and against any and all claims, liabilities, losses, damages, fines, penalties
and expenses (including reasonable fees and expenses of counsel) (collectively,
"Losses" and individually, a "Loss") that may be imposed on, incurred by, or
asserted against, the Indemnitees or any of them for following any instructions
or other directions upon which either the Collateral Agent, the Custodial Agent
or the Securities Intermediary is entitled to conclusively rely pursuant to the
terms of this Agreement; and
(c) in addition to and not in limitation of paragraph (b) immediately
above, indemnify and hold the Indemnitees and each of them harmless from and
against any and all Losses that may be imposed on, incurred by or asserted
against, the Indemnitees or any of them in connection with or arising out of the
Collateral Agent's, the Custodial Agent's or the Securities Intermediary's
acceptance or performance of its powers and duties under this Agreement,
provided the Collateral Agent, the Custodial Agent or the Securities
Intermediary has not acted with negligence or engaged in willful misconduct or
bad faith with respect to the specific Loss against which indemnification is
sought.
SECTION 9.07. 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
27
other Person with respect to any funds or property deposited hereunder, then at
its sole option, each of the Collateral Agent, the Custodial Agent and the
Securities Intermediary shall be entitled, after prompt notice to the Company
and the Purchase Contract Agent, 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 the Collateral Agent, the Custodial
Agent and the Securities Intermediary shall not 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, the Custodial
Agent and the Securities Intermediary shall be entitled to refuse to act until
either:
(a) 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, the Custodial Agent or the Securities Intermediary; or
(b) the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall have received security or an indemnity satisfactory to it
sufficient to save it harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which it may incur by reason of its acting.
The Collateral Agent, the Custodial Agent and the Securities Intermediary may in
addition elect to commence an interpleader action or seek other judicial relief
or orders as the Collateral Agent, the Custodial Agent or the Securities
Intermediary may deem necessary. Notwithstanding anything contained herein to
the contrary, none of the Collateral Agent, the Custodial Agent or the
Securities Intermediary 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 9.08. Resignation.
(a) Subject to the appointment and acceptance of a successor Collateral
Agent, Custodial Agent or Securities Intermediary as provided below:
(i) if the Collateral Agent, the Custodial Agent or the Securities
Intermediary is the same Person as the Purchase Contract Agent and an
event of default occurs under the Purchase Contract Agreement or this
Agreement, except an event of default as a result of (x) a Failed
Secondary Remarketing or (y) the event referred to in clause (ii) of the
second paragraph of Section 5.07(a) hereof, the Collateral Agent, the
Custodial Agent or the Securities Intermediary shall resign immediately;
(ii) the Collateral Agent, the Custodial Agent and the Securities
Intermediary may resign at any time by giving notice thereof to the
Company and the Purchase Contract Agent as attorney-in-fact for the
Holders of Securities;
(iii) the Collateral Agent, the Custodial Agent and the Securities
Intermediary may be removed at any time by the Company; and
28
(iv) if the Collateral Agent, the Custodial Agent or the Securities
Intermediary fails to perform any of its material obligations hereunder in
any material respect for a period of not less than 20 days after receiving
written notice of such failure by the Purchase Contract Agent and such
failure shall be continuing, the Collateral Agent, the Custodial Agent and
the Securities Intermediary may be removed by the Purchase Contract Agent,
acting at the written direction of the Holders of Securities.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Collateral Agent, the Custodial Agent or the Securities Intermediary
pursuant to clause (iv) of this Section 9.08(a). Upon any such resignation or
removal, the Company shall have the right to appoint a successor Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, which, in
the case of a resignation pursuant to clause (i) of this Section 9.08(a), shall
not be an Affiliate of the Purchase Contract Agent. If no successor Collateral
Agent, Custodial Agent or Securities Intermediary shall have been so appointed
and shall have accepted such appointment within 30 days after the retiring
Collateral Agent's, Custodial Agent's or Securities Intermediary's giving of
notice of resignation or the Company's or the Purchase Contract Agent's giving
notice of such removal, then the retiring Collateral Agent, Custodial Agent or
Securities Intermediary at the expense of the Company may petition any court of
competent jurisdiction for the appointment of a successor Collateral Agent,
Custodial Agent or Securities Intermediary. The Collateral Agent, the Custodial
Agent and the Securities Intermediary shall each be a bank or a national banking
association which has an office (or an agency office) in New York City with a
combined capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as Collateral Agent, Custodial Agent or Securities Intermediary
hereunder by a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, such successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be, shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, and the retiring Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, shall take all appropriate action, subject to
payment of any amounts owed to it hereunder, to transfer any money and property
held by it hereunder (including the Collateral) to such successor. The retiring
Collateral Agent, Custodial Agent or Securities Intermediary shall, upon such
succession, be discharged from its duties and obligations as Collateral Agent,
Custodial Agent or Securities Intermediary hereunder. After any retiring
Collateral Agent's, Custodial Agent's or Securities Intermediary's resignation
hereunder as Collateral Agent, Custodial Agent or Securities Intermediary, the
provisions of this Article 9 shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as the
Collateral Agent, Custodial Agent or Securities Intermediary. Any resignation or
removal of the Collateral Agent, Custodial Agent or Securities Intermediary
hereunder, at a time when such Person is acting as the Collateral Agent,
Custodial Agent or Securities Intermediary, shall be deemed for all purposes of
this Agreement as the simultaneous resignation or removal of the Collateral
Agent, Securities Intermediary or Custodial Agent, as the case may be.
SECTION 9.09. 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
29
this Section 9.09 shall be subject to prior consent of the Company, which
consent shall not be unreasonably withheld.
SECTION 9.10. Survival. The provisions of this Article 9 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.
SECTION 9.11. Exculpation. Anything contained 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, directors,
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, but not limited to, 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.
ARTICLE 10
AMENDMENT
SECTION 10.01. Amendment Without Consent of Holders. Without the consent
of any Holders, the Company, when authorized by a Board Resolution, 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,
to:
(a) evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company;
(b) evidence and provide for the acceptance of appointment hereunder by a
successor Collateral Agent, Custodial Agent, Securities Intermediary or Purchase
Contract Agent;
(c) add to the covenants of the Company for the benefit of the Holders, or
surrender any right or power herein conferred upon the Company, provided such
covenants or such surrender do not adversely affect the validity, perfection or
priority of the Pledge created hereunder; or
(d) cure any ambiguity (or formal defect), correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, or 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 10.02. 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 such Holders delivered to the Company, the Purchase
Contract Agent, the Custodial Agent, the Securities Intermediary and the
Collateral Agent, as the case may be, the Company, when duly authorized by a
Board Resolution, the Purchase Contract Agent, the Collateral Agent, the
Securities Intermediary and the Collateral Agent 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
30
of the Securities; provided, however, that no such supplemental agreement shall,
without the unanimous consent of the Holders of each Outstanding Security
adversely affected thereby in any material respect:
(a) change the amount or type of Collateral underlying a Security (except
for the rights of holders of Corporate Units to substitute the Treasury
Securities for the Pledged Preferred Securities, the Pledged Notes or the
Pledged Applicable Ownership Interests, as the case may be, or the rights of
Holders of Treasury Units to substitute Preferred Securities, Notes or the
Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, as applicable, for the Pledged Treasury
Securities), impair the right of the Holder of any Security to receive
distributions on the underlying Collateral or otherwise adversely affect the
Holder's rights in or to such Collateral; or
(b) otherwise effect any action that would require the consent of the
Holder of each Outstanding Security affected thereby pursuant to the Purchase
Contract Agreement if such action were effected by an agreement supplemental
thereto; or
(c) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment;
provided that if any amendment or proposal referred to above would adversely
affect only the Corporate Units or only the Treasury Units, then only the
affected class of Holders as of the record date for the Holders entitled to vote
thereon will be entitled to vote on such amendment or proposal, and such
amendment or proposal shall not be effective except with the consent of Holders
of not less than a majority of such class; provided further that the unanimous
consent of the Holders of each outstanding Purchase Contract of such class
affected thereby shall be required to approve any amendment or proposal
specified in clauses (a) through (c) above.
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 10.03. Execution of Amendments. In executing any amendment
permitted by this Article, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 7.01 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 10.04. Effect of Amendments. Upon the execution of any amendment
under this Section, 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 10.05. Reference of Amendments. Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this
31
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 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 Certificates representing Outstanding Securities.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. No Waiver. No failure on the part of the Collateral Agent,
the Securities Intermediary or any of their respective 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, the Securities Intermediary
or any of their respective 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 11.02. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Company,
the Collateral Agent, the Custodial Agent, the Securities Intermediary 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, the
Custodial Agent, the Securities Intermediary 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 11.03. Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
SECTION 11.04. 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
32
the Holders from time to time of the Securities, by their acceptance of the
same, shall be deemed to have agreed to be bound by the provisions hereof and to
have ratified the agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.
SECTION 11.05. 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 11.06. 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 11.07. Expenses, Etc. The Company agrees to reimburse the
Collateral Agent, the Custodial Agent and the Securities Intermediary for:
(a) all reasonable costs and expenses of the Collateral Agent and the
Securities Intermediary (including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent and the Securities Intermediary), in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver of
any of the terms of this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent and the
Securities Intermediary (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 11.07(b);
(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;
(d) all reasonable fees and expenses of any agent or advisor appointed by
the Collateral Agent and consented to by the Company under Section 9.09 of this
Agreement; and
(e) any other out-of-pocket costs and expenses reasonably incurred by the
Collateral Agent and the Securities Intermediary in connection with the
performance of their duties hereunder.
SECTION 11.08. 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:
33
(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 the Securities under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
SECTION 11.09. Notice of Tax Event, Tax Event Redemption and Termination
Event. Upon the occurrence of a Tax Event, a Tax Event Redemption or a
Termination Event, the Company shall deliver written notice to the Collateral
Agent, the Securities Intermediary and the Purchase Contract Agent. Upon the
written request of the Collateral Agent or the Securities Intermediary, the
Company shall inform such party whether or not a Tax Event, a Tax Event
Redemption or a Termination Event has occurred.
[SIGNATURES ON THE FOLLOWING PAGE]
34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PUBLIC SERVICE ENTERPRISE GROUP WACHOVIA BANK, NATIONAL ASSOCIATION,
INCORPORATED as Purchase Contract Agent and
as attorney-in-fact of the Holders
from time to time of the Securities
By: By:
--------------------------------- ----------------------------------
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
Public Service Enterprise Group Wachovia Bank, National Association
Incorporated 00 Xxxxx Xxxxxx
80 Park Plaza Morristown, New Jersey
P.O. Box 1171 Attention: Corporate Trust
Xxxxxx, Xxx Xxxxxx 00000 Administration
Attention: Treasurer Telecopy: 000-000-0000
Telecopy: 000-000-0000
With a copy to:
Public Service Enterprise Group
Incorporated
00 Xxxx Xxxxx
X.X. Xxx 0000
Xxxxxx, Xxx Xxxxxx 00000
Attention: Associate General Counsel
Telecopy: 000-000-0000
00
XXX XXXX XX XXX XXXX,
as Collateral Agent, Custodial Agent
and as Securities Intermediary
By:
----------------------------------
Name:
Title:
Address for Notices:
000 Xxxxxxx Xxxxxx
Xxxxx 0 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
36
EXHIBIT A
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Establishment of Treasury Units)
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 0 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
Re: Corporate Units of Public Service Enterprise Group Incorporated (the
"Company") and PSEG Funding Trust I
The securities account of The Bank of New York, as Collateral Agent,
maintained by the Securities Intermediary and designated "The Bank
of New York, as Collateral Agent of Public Service Enterprise Group
Incorporated, as pledgee of Wachovia Bank, National Association, as
the Purchase Contract Agent on behalf of and as attorney-in-fact for
the Holders" (the "Collateral Account")
Please refer to the Pledge Agreement, dated as of September 10, 2002 (the
"Pledge Agreement"), among the Company, you, as Collateral Agent, Custodial
Agent and Securities Intermediary, and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Corporate Units from time to
time. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.02[(a)][(b)][(c)] of the
Pledge Agreement that the holder of securities named below (the "Holder") has
elected to substitute $__________ Value of Treasury Securities or security
entitlements with respect thereto in exchange for an equal Value of [Pledged
Preferred Securities] [Pledged Notes] [Pledged Applicable Ownership Interests]
relating to _________ Corporate Units and has delivered to the undersigned a
notice stating that the Holder has Transferred such Treasury Securities or
security entitlements thereto to the Securities Intermediary, for credit to the
Collateral Account.
A-1
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or security entitlements thereto have
been credited to the Collateral Account, to release to the undersigned an equal
Value of [Pledged Preferred Securities] [Pledged Notes] [Pledged Applicable
Ownership Interests] in accordance with Section 5.02 of the Pledge Agreement.
WACHOVIA BANK, NATIONAL ASSOCIATION,
Date:___________________ as Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By:_______________________________________
Name:
Title:
A-2
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements with respect thereto for the [Pledged
Preferred Securities] [Pledged Notes] [Pledged Applicable Ownership Interests]:
_____________________________________ _____________________________________
Name Social Security or other
Taxpayer Identification Number,
if any
_____________________________________
Address
_____________________________________
_____________________________________
A-3
EXHIBIT B
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Establishment of Treasury Units)
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 0 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
Re: Corporate Units of Public Service Enterprise Group Incorporated (the
"Company") and PSEG Funding Trust I (the "Trust")
The securities account of The Bank of New York, as Collateral Agent,
maintained by the Securities Intermediary and designated "The Bank
of New York, as Collateral Agent of Public Service Enterprise Group
Incorporated, as pledgee of Wachovia Bank, National Association, as
the Purchase Contract Agent on behalf of and as attorney-in-fact for
the Holders" (the "Collateral Account")
Please refer to the Pledge Agreement, dated as of September 10, 2002 (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary,
Wachovia Bank, National Association, as Purchase Contract Agent and as
attorney-in-fact for the holders of Corporate Units from time to time, and the
undersigned, as Collateral Agent. Capitalized terms used herein but not defined
shall have the meanings set forth in the Pledge Agreement.
When you have confirmed that $__________ Value of Treasury Securities or
security entitlements thereto has been credited to the Collateral Account by or
for the benefit of _________, as Holder of Corporate Units (the "Holder"), you
are hereby instructed to release from the Collateral Account an equal Value of
[Pledged Preferred Securities or security entitlements with respect thereto]
[Pledged Notes or security entitlements with respect thereto] [Pledged
Applicable Ownership Interests] relating to _____ Corporate Units of the Holder
by Transfer to the Purchase Contract Agent.
THE BANK OF NEW YORK,
as Collateral Agent
Dated:_______________
By:__________________________________
Name:
Title:
B-1
Please print name and address of Holder:
_____________________________________ _____________________________________
Name Social Security or other
Taxpayer Identification Number,
if any
_____________________________________
Address
_____________________________________
_____________________________________
B-2
EXHIBIT C
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Reestablishment of Corporate Units)
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 0 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
Re: ____________ Corporate Units of Public Service Enterprise Group
Incorporated (the "Company") and PSEG Funding Trust I (the "Trust")
Please refer to the Pledge Agreement dated as of September 10, 2002 (the
"Pledge Agreement"), among the Company, you, as Collateral Agent, Custodial
Agent and Securities Intermediary, and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Corporate Units from time to
time. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.03[(a)][(b)][(c)] of the
Pledge Agreement that the holder of securities listed below (the "Holder") has
elected to substitute $ Value of [Preferred Securities or security entitlements
thereto] [Notes or security entitlements thereto] [Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio] in exchange for $__________ Value of Pledged Treasury
Securities and has delivered to the undersigned a notice stating that the holder
has Transferred such [Preferred Securities or security entitlements with respect
thereto] [Notes or security entitlements with respect thereto] [Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio] to the Securities Intermediary, for credit to the
Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such [Preferred Securities or security entitlements with
respect thereto] [Notes or security entitlements with respect thereto]
[Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio] have been credited to the Collateral
Account, to release to the undersigned $__________ Value of Treasury Securities
or security
C-1
entitlements thereto related to _____ Corporate Units of such Holder in
accordance with Section 5.03 of the Pledge Agreement.
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Purchase Contract Agent
Dated:_______________ By:__________________________________
Name:
Title:
C-2
Please print name and address of Holder electing to substitute [Preferred
Securities or security entitlements with respect thereto] [Pledged Notes or
security entitlements with respect thereto] [Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio] for Pledged Treasury Securities:
_____________________________________ _____________________________________
Name Social Security or other
Taxpayer Identification Number,
if any
_____________________________________
Address
_____________________________________
_____________________________________
C-3
EXHIBIT D
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Reestablishment of Corporate Units)
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 0 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
Re: ___________ Treasury Units of Public Service Enterprise Group
Incorporated (the "Company") and PSEG Funding Trust I (the "Trust")
The securities account of The Bank of New York, as Collateral Agent,
maintained by the Securities Intermediary and designated "The Bank
of New York, as Collateral Agent of Public Service Enterprise Group
Incorporated, as pledgee of Wachovia Bank, National Association, as
the Purchase Contract Agent on behalf of and as attorney-in-fact for
the Holders" (the "Collateral Account")
Please refer to the Pledge Agreement dated as of September 10, 2002 (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary,
Collateral Agent and Custodial Agent, Wachovia Bank, National Association, as
Purchase Contract Agent and as attorney-in-fact for the holders of Corporate
Units from time to time, and the undersigned, as Collateral Agent. Capitalized
terms used herein but no defined shall have the meaning set forth in the Pledge
Agreement.
When you have confirmed that $ __________ Value of [Preferred Securities
or security entitlements with respect thereto] [Notes or security entitlements
with respect thereto] [Applicable Ownership Interests (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio] has been credited
to the Collateral Account by or for the benefit of ________________, as Holder
of Corporate Units (the "Holder"), you are hereby instructed to
D-1
release from the Collateral Account $________________ Value of Treasury
Securities or security entitlements with respect thereto by Transfer to the
Purchase Contract Agent.
THE BANK OF NEW YORK,
as Collateral Agent
Dated:______________ By:_______________________________
Name:
Title:
_____________________________________ _____________________________________
Name Social Security or other
Taxpayer Identification Number,
if any
_____________________________________
Address
_____________________________________
_____________________________________
D-2
EXHIBIT E
NOTICE OF CASH SETTLEMENT FROM COLLATERAL
AGENT TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
WACHOVIA BANK, NATIONAL ASSOCIATION
00 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
Re: __________ Corporate Units of Public Service Enterprise Group
Incorporated (the "Company") and PSEG Funding Trust I (the "Trust")
Please refer to the Pledge Agreement dated as of September 10, 2002 (the
"Pledge Agreement"), by and among you, the Company, the undersigned, The Bank of
New York, as Collateral Agent, Custodial Agent and Securities Intermediary.
Unless otherwise defined herein, terms defined in the Pledge Agreement are used
herein as defined therein.
In accordance with Section 5.05(d) of the Pledge Agreement, we hereby
notify you that as of 11:00 a.m. (New York City time) on the Business Day
immediately preceding November 16, 2005, we have received (i) $ _______________
in immediately available funds paid in an aggregate amount equal to the Purchase
Price due to the Company on the Purchase Contract Settlement Date with respect
to ________________ Corporate Units and (ii) $ ___________ in immediately
available funds paid in an aggregate amount equal to the Purchase Price due to
the Company on the Purchase Contract Settlement Date with respect to ______
Treasury Units.
THE BANK OF NEW YORK,
as Collateral Agent
Dated:_______________ By:_____________________________________
Name:
Title:
E-1
EXHIBIT F
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 0 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
Re: Preferred Securities of PSEG Funding Trust I (the "Trust")
The undersigned hereby notifies you in accordance with Section 5.07(c) of
the Pledge Agreement, dated as of September 10, 2002 (the "Pledge Agreement"),
among the Company, you, as Collateral Agent, Custodial Agent and Securities
Intermediary, Wachovia Bank, National Association, as Purchase Contract Agent
and as attorney-in-fact for the holders of Corporate Units from time to time,
that the undersigned elects to deliver [$_____________ aggregate liquidation
amount of Separate Preferred Securities] [$______________ aggregate principal
amount of Separate Notes] for delivery to the Remarketing Agent on the Business
Day immediately preceding the [Initial Remarketing Date] [Secondary Remarketing
Date] for remarketing pursuant to Section 5.07(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
[Separate Preferred Securities] [Separate Notes] tendered hereby. Capitalized
terms used herein but no defined shall have the meaning set forth in the Pledge
Agreement.
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 [Separate Preferred Securities]
[Separate Notes] tendered herewith from the Remarketing Agent, to be delivered
to the person(s) and the address(es) indicated herein under "B. Delivery
Instructions."
With this notice, the undersigned hereby (i) represents and warrants that
the undersigned has full power and authority to tender, sell, assign and
transfer the [Separate Preferred Securities] [Separate Notes] tendered hereby
and that the undersigned is the record owner of any [Preferred Securities]
[Notes] tendered herewith in physical form or a participant in The Depositary
Trust Company ("DTC") and the beneficial owner of any [Preferred Securities]
[Notes] tendered herewith by book-entry transfer to your account at DTC and (ii)
agrees to be bound by the terms and conditions of Section 5.07(c) of the Pledge
Agreement.
F-1
Date:_____________
_____________________________________
By:__________________________________
Name:
Title:
Signature Guarantee:_________________
_____________________________________ _____________________________________
Name Social Security or other
Taxpayer Identification Number,
if any
_____________________________________
Address
_____________________________________
_____________________________________
F-2
--------------------------------------------------------------------------------
A. PAYMENT INSTRUCTIONS
--------------------------------------------------------------------------------
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
Name(s)
________________________________________________________________________________
(Please Print)
Address
________________________________________________________________________________
(Please Print)
________________________________________________________________________________
________________________________________________________________________________
(Zip Code)
________________________________________________________________________________
(Tax Identification or Social Security Number)
--------------------------------------------------------------------------------
B. DELIVERY INSTRUCTIONS
--------------------------------------------------------------------------------
In the event of a Failed Remarketing, [Preferred Securities] [Notes] which are
in physical form should be delivered to the person(s) set forth below and mailed
to the address set forth below.
Name(s)
________________________________________________________________________________
(Please Print)
Address
________________________________________________________________________________
(Please Print)
________________________________________________________________________________
________________________________________________________________________________
(Zip Code)
________________________________________________________________________________
(Tax Identification or Social Security Number)
In the event of a Failed Remarketing, [Preferred Securities] [Notes] 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:_________________________________
F-3
EXHIBIT G
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 0 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
Re: Preferred Securities of PSEG Funding Trust I (the "Trust")
The undersigned hereby notifies you in accordance with Section 5.07(c) of
the Pledge Agreement, dated as of September 10, 2002 (the "Pledge Agreement"),
among the Company, you, as Collateral Agent, Custodial Agent and Securities
Intermediary, Wachovia Bank, National Association, as Purchase Contract Agent
and as attorney-in-fact for the holders of Corporate Units from time to time,
that the undersigned elects to withdraw the [$_____ aggregate liquidation amount
of Separate Preferred Securities] [$_________ aggregate principal amount of
Separate Notes] delivered to the Custodial Agent on _________, 2005 for
remarketing pursuant to Section 5.07(c) of the Pledge Agreement. The undersigned
hereby instructs you to return such [Preferred Securities] [Notes] to the
undersigned in accordance with the undersigned's instructions. With this notice,
the Undersigned hereby agrees to be bound by the terms and conditions of Section
5.07(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:_________________
_____________________________________ _____________________________________
Name Social Security or other
Taxpayer Identification Number,
if any
_____________________________________
Address
_____________________________________
_____________________________________
G-1
