PLEDGE AGREEMENT
among
ACE LIMITED,
THE BANK OF NEW YORK,
as Collateral Agent, Custodial Agent
and Securities Intermediary
AND
THE BANK OF NEW YORK,
as Purchase Contract Agent
Dated as of April _, 2000
Table of Contents
Page
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ARTICLE I
Definitions
Section 1.1 Definitions.............................................. 2
ARTICLE II
Pledge; Control and Perfection.
Section 2.1 The Pledge............................................... 5
Section 2.2 Control and Perfection................................... 6
ARTICLE III
Distributions on Pledged Collateral.
ARTICLE IV
Substitution, Release, Repledge and Settlement of Preferred Shares.
Section 4.1 Substitution for Preferred Shares and the Creation of
Growth Prides............................................ 9
Section 4.2 Substitution of Treasury Securities and the Creation of
Income Prides............................................ 10
Section 4.3 Termination Event........................................ 10
Section 4.4 Cash Settlement.......................................... 11
Section 4.5 Early Settlement......................................... 12
Section 4.6 Application of Proceeds Settlement....................... 12
ARTICLE V
Voting Rights--Preferred Shares.
ARTICLE VI
Rights and Remedies
Section 6.1 Rights and Remedies of the Collateral Agent.............. 15
Section 6.2 Substitutions............................................ 16
ARTICLE VII
Representations and Warranties; Covenants.
Section 7.1 Representations and Warranties........................... 16
Section 7.2 Covenants................................................ 16
ARTICLE VIII
The Collateral Agent.
Section 8.1 Appointment, Powers and Immunities....................... 17
Section 8.2 Instructions of the Company.............................. 18
Section 8.3 Reliance by Collateral Agent............................. 18
Section 8.4 Rights in Other Capacities............................... 18
Section 8.5 Non-Reliance on Collateral Agent......................... 19
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Section 8.6 Compensation and Indemnity............................... 19
Section 8.7 Failure to Act........................................... 19
Section 8.8 Resignation of Collateral Agent.......................... 20
Section 8.9 Right to Appoint Agent or Advisor........................ 21
Section 8.10 Survival................................................. 21
Section 8.11 Exculpation.............................................. 21
ARTICLE IX
Amendment.
Section 9.1 Amendment Without Consent of Holders..................... 21
Section 9.2 Amendment with Consent of Holders........................ 22
Section 9.3 Execution of Amendments.................................. 22
Section 9.4 Effect of Amendments..................................... 22
Section 9.5 Reference to Amendments.................................. 23
ARTICLE X
Miscellaneous.
Section 10.1 No Waiver................................................ 23
Section 10.2 GOVERNING LAW............................................ 23
Section 10.3 Notices.................................................. 23
Section 10.4 Successors and Assigns................................... 24
Section 10.5 Counterparts............................................. 24
Section 10.6 Severability............................................. 24
Section 10.7 Expenses, Etc............................................ 24
Section 10.8 Security Interest Absolute............................... 24
Section 10.9 Consent to Jurisdiction; Miscellaneous................... 25
Section 10.10 Waiver of Immunities..................................... 25
Section 10.11 Judgement Currency....................................... 25
EXHIBIT A
Instruction to Collateral Agent............................................. A-1
EXHIBIT B
Instruction to Purchase Contract Agent...................................... B-1
EXHIBIT C
Instruction to Custodial Agent Regarding Remarketing........................ C-1
EXHIBIT D
Instruction to Custodial Agent Regarding Withdrawal from Remarketing........ D-1
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of April __, 2000 (this "Agreement"), among ACE
Limited, a corporation organized and existing under the laws of the Cayman
Islands (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 Code (as defined herein) (in such capacity, together with its successors in
such capacity, the "Securities Intermediary"), and The Bank of New York, not
individually but solely as purchase contract agent and as attorney-in-fact of
the Holders (as defined in the Purchase Contract Agreement) from time to time of
the Securities (as hereinafter defined) (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under the Purchase
Contract Agreement (as herein after defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement, dated as of the date hereof (as modified and supplemented
and in effect from time to time, the "Purchase Contract Agreement"), pursuant to
which there may be issued up to __ FELINE PRIDES of the Company (__ if the
Underwriters' over-allotment option pursuant to the Underwriting Agreement and
Pricing Agreement is exercised in full), having a stated amount of $50 (the
"Stated Amount") per FELINE PRIDES.
The FELINE PRIDES will initially consist of __ units (referred to as
"Income PRIDES") with a face amount, per Income PRIDES, equal to the Stated
Amount. Each Income PRIDES will be comprised of (a) a stock purchase contract
(the "Purchase Contract") under which (i) the holder will purchase from the
Company not later than __ (the "Purchase Contract Settlement Date"), for an
amount of cash equal to the Stated Amount, a number of ordinary shares,
$0.041666667 par value per ordinary share (the "Ordinary Shares"), of the
Company equal to the Settlement Rate (as defined below), and (ii) the Company
will pay to the Holder, on a quarterly basis, unsecured contract adjustment
payments ("Contract Adjustment Payments") at the rate of __% of the Stated
Amount per annum, and (b) beneficial ownership of one __% Cumulative Redeemable
Preferred Share, Series A, US$__ par value per share (each, a "Preferred Share")
of the Company, having a stated liquidation preference equal to the Stated
Amount.
As provided herein, holders of Income PRIDES may substitute collateral in
order to create units of Growth PRIDES ("Growth PRIDES" and together, with the
Income PRIDES, the "Securities"). Each Growth PRIDES so created will be
comprised of (a) a Purchase Contract under which (i) the holder will purchase
from the Company not later than the Purchase Contract Settlement Date, for an
amount in cash equal to the Stated Amount, a number of Ordinary Shares of the
Company equal to the Settlement Rate and (ii) the Company will pay to the Holder
thereof Contract Adjustment Payments at the rate of __% of the Stated Amount per
annum, and (b) a 1/20th undivided beneficial interest in a zero-coupon U.S.
Treasury Security (CUSIP No. __)
having a principal amount at maturity equal to $1,000 and maturing on __ (the
"Treasury Securities").
Pursuant to the terms of the Purchase Contract Agreement and the Purchase
Contracts, the Holders, from time to time, of the Securities have irrevocably
authorized the Purchase Contract Agent, as attorney-in-fact of such Holders,
among other things, to execute and deliver this Agreement on behalf of such
Holders and to grant the pledge provided hereby of the Preferred Shares and any
Treasury Securities delivered in exchange therefor to secure each Holder's
obligations under the related Purchase Contract, as provided herein and subject
to the terms hereof. Upon such pledge, the Preferred Shares and the Treasury
Securities will be beneficially owned by the Holders but will be owned of record
by the Purchase Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own
behalf and as attorney-in-fact of the Holders from time to time of the
Securities, agree as follows:
ARTICLE I
Definitions
Section 1.1 Definitions. For all purposes of this agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in the
Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board Resolution,
(iv) Business Day, (v) Cash Settlement, (vi) Certificate, (vii) Contract
Adjustment Payments, (viii) Early Settlement, (ix) Early Settlement Amount,
(x) Early Settlement Date, (xi) Failed Remarketing, (xii) Holder, (xiii)
Opinion of Counsel, (xiv) Outstanding Securities, (xv) Remarketing Agent,
(xvi) Remarketing Agreement, (xvii) Settlement Rate and (xviii) Termination
Event; and
"Agreement" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Bankruptcy Code" means Title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
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"Cash" means any coin or currency of the United States as at the time shall
be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the securities account (number __) maintained at
The Bank of New York in the name "The Bank of New York, as Purchase Contract
Agent on behalf of the holders of certain securities of ACE Limited, Collateral
Account subject to the security interest of The Bank of New York, as Collateral
Agent, for the benefit of ACE Limited, as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of this
Agreement.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such, and thereafter
"Company" shall mean such successor.
"Custodial Agent" has the meaning specified in the Recitals.
"Intermediary" means any entity that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"Ordinary Shares" has the meaning specified in the Recitals.
"Permitted Investments" means any one of the following which shall mature
not later than the next succeeding Business Day: (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US$200,000,000 at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which commercial paper has a
rating at the time of purchase at least equal to "A-1" by Standard & Poor's
Ratings Services ("S&P") or at least equal to "P-1" by Xxxxx'x Investors
Service, Inc. ("Moody's"); and (v) investments in money market funds registered
under the Investment Company Act of 1940, as amended, and rated in the highest
applicable rating category by S&P or Moody's.
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"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Preferred Shares" has the meaning specified in Section 2.1 hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Preferred Shares" has the meaning specified in the Recitals.
"Proceeds" means all interest, dividends, cash, instruments, securities,
financial assets (as defined in Sections 8-102(a)(9) of the Code) and other
property from time to time received, receivable or otherwise distributed upon
the sale, exchange, collection or disposition of the Collateral or any proceeds
thereof.
"Purchase Contract" has the meaning specified in the Recitals.
"Purchase Contract Agent" has the meaning specified in the first paragraph
of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the Recitals.
"Purchase Contract Settlement Date" has the meaning specified in the
Recitals.
"Remarketing Underwriting Agreement" means the Remarketing Underwriting
Agreement attached as Exhibit A to the Remarketing Agreement.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the first paragraph
of this Agreement.
"Security Entitlement" has the meaning set forth in Section 8-102(a)(17) of
the Code.
"Separate Preferred Shares" means any Preferred Shares that are not Pledged
Preferred Shares.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.
"TRADES Regulations" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations are
used herein as therein defined.
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"Transfer" means, with respect to the Collateral and in accordance with the
instructions of the Collateral Agent, the Purchase Contract Agent or the Holder,
as applicable:
(i) in the case of Collateral consisting of securities which
cannot be delivered by book-entry or which the parties agree are to be
delivered in physical form, delivery in appropriate physical form to
the recipient accompanied by any duly executed instruments of
transfer, assignments in blank, transfer tax stamps and any other
documents necessary to constitute a legally valid transfer to the
recipient; and
(ii) in the case of Collateral consisting of securities
maintained in book-entry form by causing a "securities intermediary"
(as defined in Section 8-102(a)(14) of the Code) to (i) credit a
"security entitlement" (as defined in Section 8-102(a)(17) of the
Code) with respect to such securities to a "securities account" (as
defined in Section 8-501(a) of the Code) maintained by or on behalf of
the recipient and (ii) to issue a confirmation to the recipient with
respect to such credit. In the case of Collateral to be delivered to
the Collateral Agent, the Securities Intermediary shall be the
Securities Intermediary and the securities account shall be the
Collateral Account.
"Treasury Security" has the meaning specified in the Recitals.
"Trust" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means, as to (i)
a Preferred Share, the Stated Amount, (ii) Cash, the face amount thereof and
(iii) Treasury Securities, the aggregate principal amount thereof at maturity.
ARTICLE II
Pledge; Control and Perfection.
Section 2.1 The Pledge. The Holders from time to time acting through the
Purchase Contract Agent, as their attorney-in-fact, and the Purchase Contract
Agent, as such attorney-in-fact, hereby pledge and grant to the Collateral
Agent, for the benefit of the Company, as collateral security for the
performance when due by such Holders of their respective obligations under the
related Purchase Contracts, a security interest in all of the right, title and
interest of the Purchase Contract Agent and such Holders (a) in the Preferred
Shares constituting a part of the Securities and any Treasury Securities
delivered in exchange for any Preferred Shares, and any Preferred Shares
delivered in exchange for any Treasury Securities, in accordance with Section
4.2 hereof, in each case that have been Transferred to or received by the
Collateral Agent and not released by the Collateral Agent to such Holders under
the provisions of this Agreement; (b) in payments made by Holders pursuant to
Section 4.4; (c) in the Collateral Account and all securities, financial assets,
Cash and other property credited thereto and all Security Entitlements related
thereto; and (d) all Proceeds of the foregoing (all of the foregoing,
collectively, the "Collateral"). Prior to or concurrently with the execution and
delivery of this Agreement, the Purchase Contract Agent, on behalf of the
initial Holders of the Securities, shall cause the
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Preferred Shares comprising a part of the Income PRIDES to be Transferred to the
Collateral Agent for the benefit of the Company. Such Preferred Shares shall be
Transferred by physically delivering such Securities to the Securities
Intermediary indorsed in blank and causing the Securities Intermediary to credit
the Collateral Account with such Securities and sending the Collateral Agent a
confirmation of the deposit of such Securities. In the event a Holder of Income
PRIDES so elects, such Holder may Transfer Treasury Securities to the Collateral
Agent for the benefit of the Company in exchange for the release by the
Collateral Agent on behalf of the Company of Preferred Shares with an aggregate
stated liquidation preference equal to the aggregate principal amount at
maturity of the Treasury Securities so Transferred to the Purchase Contract
Agent on behalf of such Holder. Such Treasury Securities shall be Transferred to
the Collateral Account maintained by the Collateral Agent at the Securities
Intermediary by book-entry transfer to the Collateral Account in accordance with
the TRADES Regulations and other applicable law and by the notation by the
Securities Intermediary on its books that a Security Entitlement with respect to
such Treasury Securities has been credited to the Collateral Account. For
purposes of perfecting the Pledge under applicable law, including, to the extent
applicable, the TRADES Regulations or the Uniform Commercial Code as adopted and
in effect in any applicable jurisdiction, the Collateral Agent shall be the
agent of the Company as provided herein. The pledge provided in this Section 2.1
is herein referred to as the "Pledge" and the Preferred Shares or Treasury
Securities subject to the Pledge, excluding any Preferred Shares or Treasury
Securities released from the Pledge as provided in Sections 4.1 and 4.2 hereof,
respectively, are hereinafter referred to as "Pledged Preferred Shares" or the
"Pledged Treasury Securities," respectively. Subject to the Pledge and the
provisions of Section 2.2 hereof, the Holders from time to time shall have full
beneficial ownership of the Collateral. Whenever directed by the Collateral
Agent acting on behalf of the Company, the Securities Intermediary shall have
the right to reregister the Preferred Shares or any other Securities held in
physical form in its name.
Except as may be required in order to release Preferred Shares in
connection with a Holder's election to convert its investment from an Income
PRIDES to a Growth PRIDES, or except as otherwise required to release Securities
as specified herein, neither the Collateral Agent nor the Securities
Intermediary shall relinquish physical possession of any certificate evidencing
a Preferred Share prior to the termination of this Agreement. If it becomes
necessary for the Securities Intermediary to relinquish physical possession of a
certificate in order to release a portion of the Preferred Shares evidenced
thereby from the Pledge, the Securities Intermediary shall use its best efforts
to obtain physical possession of a replacement certificate evidencing any
Preferred Shares remaining subject to the Pledge hereunder registered to it or
endorsed in blank within fifteen days of the date it relinquished possession.
The Securities Intermediary shall promptly notify the Company and the Collateral
Agent of the Securities Intermediary's failure to obtain possession of any such
replacement certificate as required hereby.
Section 2.2 Control and Perfection. (a) In connection with the Pledge
granted in Section 2.1, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, hereby authorize and direct the Securities Intermediary
(without the necessity of obtaining the further consent of the Purchase Contract
Agent or any of the Holders), and the Securities Intermediary agrees, to
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comply with and follow any instructions and entitlement orders (as defined in
Section 8-102(a)(8) of the Code) that the Collateral Agent on behalf of the
Company may give in writing with respect to the Collateral Account, the
Collateral credited thereto and any Security Entitlements with respect to any
thereof. Such instructions and entitlement orders may, without limitation,
direct the Securities Intermediary to transfer, redeem, sell, liquidate, assign,
deliver or otherwise dispose of the Preferred Shares, the Treasury Securities
and any Security Entitlements with respect thereto and to pay and deliver any
income, proceeds or other funds derived therefrom to the Company. The Holders
from time to time acting through the Purchase Contract Agent hereby further
authorize and direct the Collateral Agent, as Agent of the Company, to itself
issue instructions and entitlement orders, and to otherwise take action, with
respect to the Collateral Account, the Collateral credited thereto and any
Security Entitlements with respect thereto, pursuant to the terms and provisions
hereof, all without the necessity of obtaining the further consent of the
Purchase Contract Agent or any of the Holders. The Collateral Agent shall be the
agent of the Company and shall act as directed in writing by the Company.
Without limiting the generality of the foregoing, the Collateral Agent shall
issue entitlement orders to the Securities Intermediary when and as directed by
the Company.
(b) The Securities Intermediary hereby confirms and agrees that: (i) all
securities or other property underlying any financial assets credited to the
Collateral Account shall be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in blank or credited to
another Collateral Account maintained in the name of the Securities Intermediary
and in no case will any financial asset credited to the Collateral Account be
registered in the name of the Purchase Contract Agent, the Collateral Agent, the
Company or any Holder, payable to the order of, or specially indorsed to, the
Purchase Contract Agent, the Collateral Agent, the Company or any Holder except
to the extent the foregoing have been specially indorsed to the Securities
Intermediary or in blank; (ii) all property delivered to the Securities
Intermediary pursuant to this Pledge Agreement (including, without limitation,
any Preferred Shares or Treasury Securities) will be promptly credited to the
Collateral Account; (iii) the Collateral Account is an account to which
financial assets are or may be credited, and the Securities Intermediary shall,
subject to the terms of this Agreement, treat the Purchase Contract Agent as
entitled to exercise the rights of any financial asset credited to the
Collateral Account; (iv) the Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into, any agreement with
any other person relating to the Collateral Account and/or any financial assets
credited thereto pursuant to which it has agreed to comply with entitlement
orders (as defined in Section 8-102(a)(8) of the Code) of such other person; and
(v) the Securities Intermediary has not entered into, and until the termination
of this Agreement will not enter into, any agreement with the Company, the
Collateral Agent or the Purchase Contract Agent purporting to limit or condition
the obligation of the Securities Intermediary to comply with entitlement orders
as set forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item of property
(whether investment property, financial asset, security, instrument or cash)
credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
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(d) In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorney-in-fact to take on behalf of, and in
the name, place and stead of the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such power-
of-attorney shall not be deemed to require of the Collateral Agent any specific
duties or obligations not otherwise assumed by the Collateral Agent hereunder.
ARTICLE III
Distributions on Pledged Collateral.
So long as the Purchase Contract Agent is the registered owner of the
Pledged Preferred Shares, it shall receive all payments thereon. If the Pledged
Preferred Shares are reregistered, such that the Collateral Agent becomes the
registered holder, all payments of the Stated Amount, or cash dividends on, the
Pledged Preferred Shares, as the case may be, and all payments of the principal
of, or cash distributions on, any Pledged Treasury Securities received by the
Collateral Agent that are properly payable hereunder shall be paid by the
Collateral Agent by wire transfer in same day funds:
(i) In the case of (A) cash dividends with respect to the
Pledged Preferred Shares and (B) any payments of the Stated Amount
with respect to any Preferred Shares that have been released from the
Pledge pursuant to Section 4.3 hereof, to the Purchase Contract Agent,
for the benefit of the relevant Holders of Securities, to the account
designated by the Purchase Contract Agent for such purpose, no later
than 2:00 p.m., New York City time, on the Business Day such payment
is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a
Business Day or after 12:30 p.m., New York City time, on a Business
Day, then such payment shall be made no later than 10:30 a.m., New
York City time, on the next succeeding Business Day);
(ii) In the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant
to Section 4.3 hereof, to the Holders of the Growth PRIDES to the
accounts designated by them in writing for such purpose no later than
2:00 p.m., New York City time, on the Business Day such payment is
received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a
Business Day or after 12:30 p.m., New York City time, on a Business
Day, then such payment shall be made no later than 10:30 a.m., New
York City time, on the next succeeding Business Day); and
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(iii) In the case of payments of the Stated Amount of any
Pledged Preferred Shares or the principal of any Pledged Treasury
Securities, to the Company on the Purchase Contract Settlement Date in
accordance with the procedure set forth in Section 4.6(a) or 4.6(b)
hereof, in full satisfaction of the respective obligations of the
Holders under the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein
shall be applied by the Purchase Contract Agent pursuant to the provisions of
the Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount on account of any
Preferred Share, that, at the time of such payment, is a Pledged Preferred Share
or a Holder of a Growth PRIDES shall receive any payments of principal on
account of any Treasury Securities that, at the time of such payment, are
Pledged Treasury Securities, the Purchase Contract Agent or such Holder shall
hold the same as trustee of an express trust for the benefit of the Company (and
promptly deliver the same over to the Company) for application to the
obligations of the Holders under the related Purchase Contracts, and the Holders
shall acquire no right, title or interest in any such payments of Stated Amount
or principal so received.
ARTICLE IV
Substitution, Release, Repledge and Settlement of Preferred Shares.
Section 4.1 Substitution for Preferred Shares and the Creation of Growth
Prides. At any time on or prior to the fifth Business Day immediately preceding
the Purchase Contract Settlement Date, a Holder of Income PRIDES shall have the
right to substitute Treasury Securities for the Preferred Shares securing such
Holder's obligations under the Purchase Contract(s) comprising a part of its
Income PRIDES in integral multiples of 20 Income PRIDES by (a) Transferring to
the Collateral Agent Treasury Securities having a Value equal to the aggregate
Stated Amount of the Pledged Preferred Shares to be released and (b)(i) in the
event that Contract Adjustment Payments are at a higher rate for Growth PRIDES
than for Income PRIDES, delivering to the Purchase Contract Agent cash in an
amount equal to the Contract Adjustment Payments that would have accrued since
the last date that Contract Adjustment Payments were made through the date of
substitution on the Growth PRIDES being created by the Holder, which amount the
Purchase Contract Agent shall promptly remit to the Company, and (ii) delivering
the related Income PRIDES to the Purchase Contract Agent, accompanied by a
notice, substantially in the form of Exhibit B hereto, to the Purchase Contract
Agent stating that such Holder has Transferred Treasury Securities to the
Collateral Agent pursuant to clause (a) above (stating the Value of the Treasury
Securities Transferred by such Holder) and requesting that the Purchase Contract
Agent instruct the Collateral Agent to release from the Pledge the Pledged
Preferred Shares related to such Income PRIDES. The Purchase Contract Agent
shall instruct the Collateral Agent in the form provided in Exhibit A. Upon
receipt of Treasury Securities from a Holder of Income PRIDES and the related
instruction from the Purchase Contract Agent, the Collateral Agent shall release
the Pledged Preferred Shares and shall promptly Transfer such Pledged Preferred
shares free and clear of any lien, pledge or security interest created hereby,
to the Purchase Contract Agent. All items Transferred and/or substituted
9
by any Holder pursuant to this Section 4.1, Section 4.2 or any other Section of
this Agreement shall be Transferred and/or substituted free and clear of all
liens, claims and encumbrances.
Section 4.2 Substitution of Treasury Securities and the Creation of Income
Prides. At any time on or prior to the fifth Business Day immediately preceding
the Purchase Contract Settlement Date, a Holder of Growth PRIDES shall have the
right to reestablish Income PRIDES consisting of the Purchase Contracts and
Preferred Shares in integral multiples of 20 Income PRIDES by (a) Transferring
to the Collateral Agent Preferred Shares having a Value equal to the Value of
the Pledged Treasury Securities to be released and (b) (i) in the event that
Contract Adjustment Payments are at a higher rate for Income PRIDES than for
Growth PRIDES, by delivering to the Purchase Contract Agent cash in an amount
equal to the excess of the Contract Adjustment Payments that would have accrued
since the last payment date through the date of substitution on the Income
PRIDES being recreated by such Holders, over the Contract Adjustment Payments
that have accrued over the same time period on the related Growth PRIDES and
(ii) delivering the related Growth PRIDES to the Purchase Contract Agent,
accompanied by a notice, substantially in the form of Exhibit B hereto, to the
Purchase Contract Agent stating that such Holder has transferred Preferred
Shares to the Collateral Agent pursuant to clause (a) above and requesting that
the Purchase Contract Agent instruct the Collateral Agent to release from the
Pledge the Pledged Treasury Securities related to such Growth PRIDES. The
Purchase Contract Agent shall instruct the Collateral Agent in the form provided
in Exhibit A. Upon receipt of the Preferred Shares from such Holder and the
instruction from the Purchase Contract Agent, the Collateral Agent shall release
the Treasury Securities and shall promptly Transfer such Treasury Securities,
free and clear of any lien, pledge or security interest created hereby, to the
Purchase Contract Agent.
Section 4.3 Termination Event. Upon receipt by the Collateral Agent of
written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall promptly Transfer any Pledged Preferred Shares and
Pledged Treasury Securities to the Purchase Contract Agent for the benefit of
the Holders of the Income PRIDES and the Growth PRIDES, respectively, free and
clear of any lien, pledge or security interest or other interest created hereby.
If such Termination Event shall result from the Company's becoming a debtor
under the Bankruptcy Code, and if the Collateral Agent shall for any reason fail
promptly to effectuate the release and Transfer of all Pledged Preferred Shares
or of the Pledged Treasury Securities, as the case may be, as provided by this
Section 4.3, the Purchase Contract Agent shall (i) use its best efforts to
obtain an opinion of a nationally recognized law firm reasonably acceptable to
the Collateral Agent to the effect that, as a result of the Company's being the
debtor in such a bankruptcy case, the Collateral Agent will not be prohibited
from releasing or Transferring the Collateral as provided in this Section 4.3,
and shall deliver such opinion to the Collateral Agent within ten days after the
occurrence of such Termination Event, and if (y) the Purchase Contract Agent
shall be unable to obtain such opinion within ten days after the occurrence of
such Termination Event or (z) the Collateral Agent shall continue, after
delivery of such opinion, to refuse to effectuate the release and Transfer of
all Pledged Preferred Shares or the Pledged Treasury Securities, as the case may
be, as provided in this Section 4.3, then the Purchase
10
Contract Agent shall within fifteen days after the occurrence of such
Termination Event commence an action or proceeding in the court with
jurisdiction of the Company's case under the Bankruptcy Code seeking an order
requiring the Collateral Agent to effectuate the release and transfer of all
Pledged Preferred Shares or of the Pledged Treasury Securities, as the case may
be, as provided by this Section 4.3 or (ii) commence an action or proceeding
like that described in subsection (i)(z) hereof within ten days after the
occurrence of such Termination Event.
Section 4.4 Cash Settlement. (a) Upon receipt by the Collateral Agent of
(i) a notice from the Purchase Contract Agent promptly after the receipt by the
Purchase Contract Agent of such notice that a Holder of an Income PRIDES or
Growth PRIDES has elected, in accordance with the procedures specified in
Section 5.4(a)(i) or (d)(i) of the Purchase Contract Agreement, respectively, to
settle its Purchase Contract with Cash and (ii) payment of the amount required
to settle such contract by such Holder on or prior to 11:00 a.m., New York City
time, on the Business Day immediately preceding the Purchase Contract Settlement
Date in lawful money of the United States by certified or cashiers' check or
wire transfer in immediately available funds payable to or upon the order of the
Company, then the Collateral Agent shall promptly invest any Cash received from
a Holder in connection with a Cash Settlement in Permitted Investments. Upon
receipt of the proceeds upon the maturity of the Permitted Investments on the
Purchase Contract Settlement Date, the Collateral Agent shall pay the portion of
such proceeds and deliver any certified or cashiers' checks received and any
funds so wired, in an aggregate amount equal to the Purchase Price, to the
Company on the Purchase Contract Settlement Date, and shall distribute any funds
in respect of the interest earned from the Permitted Investments to the Purchase
Contract Agent for payment to the relevant Holders.
(b) If a Holder of an Income PRIDES fails to notify the Purchase Contract
Agent of its intention to make a Cash Settlement in accordance with Section
5.4(a)(i) of the Purchase Contract Agreement, such failure shall constitute an
event of default under the Purchase Contract Agreement and hereunder, and the
Holder shall be deemed to have consented to the disposition of the Pledged
Preferred Shares pursuant to the remarketing as described in Section 5.4(b) of
the Purchase Contract Agreement, which is incorporated herein by reference. If a
Holder of an Income PRIDES does notify the Purchase Contract Agent as provided
in Section 5.4(a)(i) of the Purchase Contract Agreement of its intention to pay
the Purchase Price in cash, but fails to make such payment as required by
Section 5.4(a)(ii) of the Purchase Contract Agreement, such failure will
constitute an event of default under the Purchase Contract Agreement and
hereunder, and the Preferred Shares of such a Holder will not be remarketed but
instead the Collateral Agent, for the benefit of the Company, will exercise its
rights as a secured party with respect to such Preferred Shares at the direction
of the Company to retain or dispose of the Collateral in accordance with
applicable law. In addition, in the event of a Failed Remarketing as described
in Section 5.4(b) of the Purchase Contract Agreement, such Failed Remarketing
shall constitute an event of default hereunder by such Holder and the Collateral
Agent, for the benefit of the Company, will also exercise its rights as a
secured party with respect to such Preferred Shares at the direction of the
Company to retain or dispose of the Collateral in accordance with applicable
law.
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(c) If a Holder of a Growth PRIDES fails to notify the Purchase Contract
Agent of such Holder's intention to make a Cash Settlement in accordance with
Section 5.4(d)(i) of the Purchase Contract Agreement, or if a Holder of a Growth
PRIDES does notify the Purchase Contract Agent as provided in paragraph
5.4(d)(i) 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
5.4(d)(ii) of the Purchase Contract Agreement, such failure shall constitute an
event of default hereunder by such Holder and upon the maturity of any Pledged
Treasury Securities, if any, held by the Collateral Agent on the Business Day
immediately preceding the Purchase Contract Settlement Date, the principal
amount at maturity of the Pledged Treasury Securities received by the Collateral
Agent shall, upon written direction of the Company, be invested promptly in
Permitted Investments. On the Purchase Contract Settlement Date, an amount equal
to the Purchase Price will be remitted to the Company as payment thereof. In the
event the sum of the proceeds from the related Pledged Treasury Securities and
the investment earnings earned from such investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being settled thereby, the
Collateral Agent will distribute such excess to the Purchase Contract Agent for
the benefit of the Holder of the related Growth PRIDES or Income PRIDES when
received.
Section 4.5 Early Settlement. Upon written notice to the Collateral Agent
by the Purchase Contract Agent that one or more Holders of Securities have
elected to effect Early Settlement of their respective obligations under the
Purchase Contracts forming a part of such Securities in accordance with the
terms of the Purchase Contracts and the Purchase Contract Agreement (setting
forth the number of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Preferred Shares in the case of a Holder of
Income PRIDES or (b) Pledged Treasury Securities in the case of a Holder of
Growth PRIDES, as the case may be, with a principal amount at maturity equal to
the product of (i) the Stated Amount times (ii) the number of such Purchase
Contracts as to which such Holders have elected to effect Early Settlement and
shall Transfer all such Pledged Preferred Shares or Pledged Treasury Securities,
as the case may be, free and clear of the Pledge created hereby, to the Purchase
Contract Agent for the benefit of the Holders.
Section 4.6 Application of Proceeds Settlement. (a) In the event a Holder
of Income PRIDES has not elected to make an effective Cash Settlement by
notifying the Purchase Contract Agent in the manner provided for in paragraph
5.4(a)(i) in the Purchase Contract Agreement or has not made an Early Settlement
of the Purchase Contract(s) underlying its Income PRIDES, such Holder shall be
deemed to have elected to pay for the Ordinary Shares to be issued under such
Purchase Contract(s) from the Proceeds of the related Pledged Preferred Shares.
The Collateral Agent shall, by 10:00 a.m., New York City time, on the fourth
Business Day immediately preceding the Purchase Contract Settlement Date,
without any instruction from such Holder of Income PRIDES, present the related
Pledged Preferred Shares to the Remarketing Agent for remarketing. Upon
receiving such Pledged Preferred Shares, the Remarketing Agent,
12
pursuant to the terms of the Remarketing Agreement and the Remarketing
Underwriting Agreement, will use its reasonable efforts to remarket such Pledged
Preferred Shares on such date at a price not less than approximately 100.5% of
the aggregate Value of such Pledged Preferred Shares, plus accumulated and
unpaid dividends, if any, thereon. After deducting as the remarketing fee an
amount not exceeding 25 basis points (.25%) of the aggregate Value of the
Pledged Preferred Shares from any amount of such Proceeds in excess of the
aggregate Value, plus such accumulated and unpaid dividends of the remarketed
Pledged Preferred Shares, the Remarketing Agent will remit the entire amount of
the Proceeds of such remarketing to the Collateral Agent. On the Purchase
Contract Settlement Date, the Collateral Agent shall apply that portion of the
Proceeds from such remarketing equal to the aggregate Value, plus such
accumulated and unpaid distributions of such Pledged Preferred Shares, to
satisfy in full the obligations of such Holders of Income PRIDES to pay the
Purchase Price to purchase the Ordinary Shares under the related Purchase
Contracts. The remaining portion of such Proceeds, if any, shall be distributed
by the Collateral Agent to the Purchase Contract Agent for payment to the
Holders. If the Remarketing Agent advises the Collateral Agent in writing that
it cannot remarket the related Pledged Preferred Shares of such Holders of
Income PRIDES at a price not less than 100% of the aggregate Value of such
Pledged Preferred Shares plus any accumulated and unpaid distributions, thus
resulting in a Failed Remarketing and an event of default under the Purchase
Contract Agreement and hereunder, the Collateral Agent, for the benefit of the
Company will, at the written direction of the Company, retain or dispose of the
Pledged Preferred Shares in accordance with applicable law and satisfy in full,
from any such disposition or retention, such Holder's obligation to pay the
Purchase Price for the Ordinary Shares.
(b) In the event a Holder of Growth PRIDES has not made an Early
Settlement of the Purchase Contract(s) underlying its Growth PRIDES, such Holder
shall be deemed to have elected to pay for the Ordinary Shares to be issued
under such Purchase Contract(s) from the Proceeds of the related Pledged
Treasury Securities. On the Business Day immediately prior to the Purchase
Contract Settlement Date, the Collateral Agent shall, at the written direction
of the Purchase Contract Agent, invest the Cash proceeds of the maturing Pledged
Treasury Securities in overnight Permitted Investments. Without receiving any
instruction from any such Holder of Growth PRIDES, the Collateral Agent shall
apply the Proceeds of the related Pledged Treasury Securities 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 and the investment earnings from the investment in overnight
Permitted Investments is in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent shall distribute
such excess, when received, to the Purchase Contract Agent for the benefit of
the Holders.
(c) Pursuant to the Remarketing Agreement and subject to the terms of
the Remarketing Underwriting Agreement, on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, but no earlier than
the Payment Date immediately preceding the Purchase Contract Settlement Date,
holders of Separate Preferred Shares may elect to have their Separate Preferred
Shares remarketed by delivering their Separate Preferred Shares, together with a
notice of such election, substantially in the form of Exhibit C hereto, to the
Custodial Agent. The Custodial Agent will hold such Separate
13
Preferred Shares in an account separate from the Collateral Account. A holder of
Separate Preferred Shares electing to have its Separate Preferred Shares
remarketed will also have the right to withdraw such election by written notice
to the Custodial Agent, substantially in the form of Exhibit D hereto, on or
prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, upon which notice the Custodial Agent will return such Separate
Preferred Shares to such holder. On the fourth Business Day immediately
preceding the Purchase Contract Settlement Date, the Custodial Agent will
deliver to the Remarketing Agent for remarketing all Separate Preferred Shares
delivered to the Custodial Agent pursuant to this Section 4.6(c) and not
withdrawn pursuant to the terms hereof prior to such date. The portion of the
proceeds from such remarketing equal to the aggregate Value of such Separate
Preferred Shares will automatically be remitted by the Remarketing Agent to the
Custodial Agent for the benefit of the holders of such Separate Preferred
Shares. In addition, after deducting as the remarketing fee an amount not
exceeding 25 basis points (.25%) of the Value of the remarketed Separate
Preferred Shares, from any amount of such proceeds in excess of the aggregate
Value of the remarketed Separate Preferred Shares plus any accumulated and
unpaid dividends thereon, the Remarketing Agent will remit to the Custodial
Agent the remaining portion of the proceeds, if any, for the benefit of such
holders. If, despite using its reasonable efforts, the Remarketing Agent advises
the Custodial Agent in writing that it cannot remarket the related Separate
Preferred Shares of such holders at a price not less than 100% of the aggregate
Value of such Separate Preferred Shares plus accumulated and unpaid dividends
and thus resulting in a Failed Remarketing, the Remarketing Agent will promptly
return such Preferred Shares to the Custodial Agent for redelivery to such
holders.
ARTICLE V
Voting Rights--Preferred Shares.
The Purchase Contract Agent may exercise, or refrain from exercising, any
and all voting and other consensual rights pertaining to the Pledged Preferred
Shares or any part thereof for any purpose not inconsistent with the terms of
this Agreement and in accordance with the terms of the Purchase Contract
Agreement; provided, that the Purchase Contract Agent shall not exercise or, as
the case may be, shall not refrain from exercising such right if, in the
judgment of the Company, such action would impair or otherwise have a material
adverse effect on the value of all or any of the Pledged Preferred Shares; and
provided, further, that the Purchase Contract Agent shall give the Company and
the Collateral Agent at least five days' prior written notice of the manner in
which it intends to exercise, or its reasons for refraining from exercising, any
such right. Upon receipt of any notices and other communications in respect of
any Pledged Preferred Shares, including notice of any meeting at which holders
of Preferred Shares are entitled to vote or solicitation of consents, waivers or
proxies of holders of Preferred Shares, 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 Shares (in form and
14
substance satisfactory to the Collateral Agent) as are prepared by the Purchase
Contract Agent with respect to the Pledged Preferred Shares.
ARTICLE VI
Rights and Remedies
Section 6.1 Rights and Remedies of the Collateral Agent. (a) In addition
to the rights and remedies specified in Section 4.4 hereof or otherwise
available at law or in equity, after an event of default hereunder, the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
"Code") (whether or not the Code is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Wherever reference is made in this Agreement to any section of the
Code, such reference shall be deemed to include a reference to any provision of
the Code which is a successor to, or amendment of, such section. Without
limiting the generality of the foregoing, such remedies may include, to the
extent permitted by applicable law, (i) retention of the Pledged Preferred
Shares or other Collateral in full satisfaction of the Holders' obligations
under the Purchase Contracts or (ii) sale of the Pledged Preferred Shares or
other Collateral 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 principal payments of any Pledged
Treasury Securities as provided in Article III hereof in satisfaction of the
obligations of the Holder of Growth PRIDES of which such Pledged Treasury
Securities is a part under the related Purchase Contracts, the inability to make
such payments shall constitute an event of default hereunder and the Collateral
Agent shall have and may exercise, with reference to such Pledged Treasury
Securities and such obligations of such Holder, any and all of the rights and
remedies available to a secured party under the Code and the TRADES Regulations
after default by a debtor, and as otherwise granted herein or under any other
law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the Stated Amount of or,
cash dividends on, the Pledged Preferred Shares, or (ii) the principal amount at
maturity of the Pledged Treasury Securities, subject, in each case, to the
provisions of Section 3, and as otherwise granted herein.
(d) The Purchase Contract Agent, individually and as attorney-in-fact
for each Holder of Securities, in the event such Holder becomes the Holder of a
Growth PRIDES, agrees that, from time to time, upon the written request of the
Collateral Agent, the Purchase Contract Agent or such Holder shall execute and
deliver such further documents and do such other acts and things as the
Collateral Agent may reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the Collateral
Agent hereunder. The Purchase Contract Agent shall have no liability to any
Holder for executing any documents
15
or taking any such acts requested by the Collateral Agent hereunder, except for
liability for its own negligent act, its own negligent failure to act, its bad
faith or its own willful misconduct.
Section 6.2 Substitutions. Whenever a Holder has the right to substitute
Treasury Securities or Preferred Shares, as the case may be, for Collateral held
by the Collateral Agent, such substitution shall not constitute a novation of
the security interest created hereby.
ARTICLE VII
Representations and Warranties; Covenants.
Section 7.1 Representations and Warranties. The Holders from time to time,
acting through the Purchase Contract Agent as their attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and lien
on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and, in
the case of Collateral delivered in physical form, is the sole holder of
such Collateral and is the sole beneficial owner of, or has the right to
Transfer, the Collateral it Transfers to the Collateral Agent, free and
clear of any security interest, lien, encumbrance, call, liability to pay
money or other restriction other than the security interest and lien
granted under Section 2.1 hereof;
(c) upon the Transfer of the Collateral to the Collateral Account, the
Collateral Agent, for the benefit of the Company, will have a valid and
perfected first priority security interest therein (assuming that any
central clearing operation or any Intermediary or other entity not within
the control of the Holder involved in the Transfer of the Collateral,
including the Collateral Agent, gives the notices and takes the action
required of it hereunder and under applicable law for perfection of that
interest and assuming the establishment and exercise of control pursuant to
Section 2.2 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 Section 2.1 hereof or violate any
provision of any existing law or regulation applicable to it or of any
mortgage, charge, pledge, indenture, contract or undertaking to which it is
a party or which is binding on it or any of its assets.
Section 7.2 Covenants. The Holders from time to time, acting through the
Purchase Contract Agent as their attorney-in-fact (it being understood that the
Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
16
(a) neither the Purchase Contract Agent nor such Holders will create
or purport to create or allow to subsist any mortgage, charge, lien, pledge
or any other security interest whatsoever over the Collateral or any part
of it other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of
it except for the beneficial interest therein, subject to the pledge
hereunder, transferred in connection with the Transfer of the Securities.
ARTICLE VIII
The Collateral Agent.
Section 8.1 Appointment, Powers and Immunities. The Collateral Agent shall
act as Agent for the Company hereunder with such powers as are specifically
vested in the Collateral Agent by the terms of this Agreement, together with
such other powers as are reasonably incidental thereto. Each of the Collateral
Agent, the Custodial Agent and the Securities Intermediary: (a) shall have no
duties or responsibilities except those expressly set forth in this Agreement
and no implied covenants or obligations shall be inferred from this Agreement
against any of them, nor shall any of them be bound by the provisions of any
agreement by any party hereto beyond the specific terms hereof; (b) shall not be
responsible for any recitals contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by it under, this
Agreement, the Income PRIDES, Growth PRIDES or the Purchase Contract Agreement,
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement (other than as against the Collateral Agent), the
Securities or the Purchase Contract Agreement or any other document referred to
or provided for herein or therein or for any failure by the Company or any other
Person (except the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be) to perform any of its obligations hereunder or
thereunder or for the perfection, priority or, except as expressly required
hereby, maintenance of any security interest created hereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder (except in the case of the Collateral Agent, pursuant to directions
furnished under Section 8.2 hereof, subject to Section 8.6 hereof); (d) shall
not be responsible for any action taken or omitted to be taken by it hereunder
or under any other document or instrument referred to or provided for herein or
in connection herewith or therewith, except for its own negligence, bad faith or
willful misconduct; and (e) shall not be required to advise any party as to
selling or retaining, or taking or refraining from taking any action with
respect to, the Securities or other property deposited hereunder. Subject to the
foregoing, during the term of this Agreement, the Collateral Agent shall take
all reasonable action in connection with the safekeeping and preservation of the
Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the
17
Value of the Collateral. Notwithstanding the foregoing, the Collateral Agent,
the Custodial Agent, the Purchase Contract Agent and Securities Intermediary,
each in its individual capacity, hereby waive any right of setoff, bankers lien,
liens or perfection rights as securities intermediary or any counterclaim with
respect to any of the Collateral.
Section 8.2 Instructions of the Company. The Company shall have the right,
by one or more instruments in writing executed and delivered to the Collateral
Agent, the Custodial Agent or the Securities Intermediary, as the case may be,
to direct the time, method and place of conducting any proceeding for the
realization of any right or remedy available to the Collateral Agent, or of
exercising any power conferred on the Collateral Agent, the Custodial Agent or
the Securities Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this Agreement; provided,
however, that (i) such direction shall not conflict with the provisions of any
law or of this Agreement and (ii) the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall be adequately indemnified as provided herein.
Nothing in this Section 8.2 shall impair the right of the Collateral Agent in
its discretion to take any action or omit to take any action which it deems
proper and which is not inconsistent with such direction.
Section 8.3 Reliance by Collateral Agent. Each of the Securities
Intermediary, the Custodial Agent and the Collateral Agent shall be entitled
conclusively to rely upon any certification, order, judgment, opinion, notice or
other communication (including, without limitation, any thereof by telephone or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be. As to
any matters not expressly provided for by this Agreement, the Collateral Agent,
the Custodial Agent and the Securities Intermediary shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.
Section 8.4 Rights in Other Capacities. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any Holder of Income
PRIDES or Growth PRIDES and any holder of Separate Preferred Shares (and any of
their respective subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, and the Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent, any Holder of Income PRIDES or Growth PRIDES or any
holder of Separate Preferred Shares 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
18
kind in or upon the Collateral and the Collateral shall not be commingled with
any other assets of any such Person.
Section 8.5 Non-Reliance on Collateral Agent. None of the Securities
Intermediary, the Custodial Agent or the Collateral Agent shall be required to
keep itself informed as to the performance or observance by the Purchase
Contract Agent or any Holder of Securities of this Agreement, the Purchase
Contract Agreement, the Income PRIDES or Growth PRIDES 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 Income PRIDES or Growth
PRIDES. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall not have any duty or responsibility to provide the Company or
the Remarketing Agent with any credit or other information concerning the
affairs, financial condition or business of the Purchase Contract Agent, any
Holder of Income PRIDES or Growth PRIDES or any holder of Separate Preferred
Shares (or any of their respective subsidiaries or affiliates) that may come
into the possession of the Collateral Agent, the Custodial Agent or the
Securities Intermediary or any of their respective affiliates.
Section 8.6 Compensation and Indemnity. The Company agrees: (i) to pay
each of the Collateral Agent and the Custodial Agent from time to time such
compensation as shall be agreed in writing between the Company and the
Collateral Agent or the Custodial Agent, as the case may be, for all services
rendered by each of them hereunder and (ii) to indemnify the Collateral Agent,
the Custodial Agent and the Securities Intermediary for, and to hold each of
them harmless from and against, any loss, liability or reasonable out-of-pocket
expense incurred without negligence, willful misconduct or bad faith on its
part, arising out of or in connection with the acceptance or administration of
its powers and duties under this Agreement, including the reasonable out-of-
pocket costs and expenses (including reasonable fees and expenses of counsel) of
defending itself against any claim or liability in connection with the exercise
or performance of such powers and duties. The Collateral Agent, the Custodial
Agent and the Securities Intermediary shall each promptly notify the Company of
any third party claim which may give rise to the indemnity hereunder and give
the Company the opportunity to participate in the defense of such claim with
counsel reasonably satisfactory to the indemnified party, and no such claim
shall be settled without the written consent of the Company, which consent shall
not be unreasonably withheld.
Section 8.7 Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent and the Custodial Agent shall
be entitled, after prompt notice to the Company and the Purchase Contract Agent,
at its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and neither the Collateral Agent nor the Custodial
Agent shall be or become liable in any way to any of the parties hereto for its
failure or refusal to comply with such conflicting claims, demands or
instructions. The Collateral Agent and the Custodial Agent shall be entitled to
refuse to act until either (i) such conflicting or adverse claims or demands
shall have been finally determined by a court of competent jurisdiction or
settled by agreement between the
19
conflicting parties as evidenced in a writing, satisfactory to the Collateral
Agent or the Custodial Agent, as the case may be, or (ii) the Collateral Agent
or the Custodial Agent, as the case may be, shall have received security or an
indemnity reasonably satisfactory to the Collateral Agent or the Custodial
Agent, as the case may be, sufficient to save the Collateral Agent or the
Custodial Agent, as the case may be, harmless from and against any and all loss,
liability or reasonable out-of-pocket expense which the Collateral Agent or the
Custodial Agent, as the case may be, may incur by reason of its acting without
bad faith, willful misconduct or gross negligence. The Collateral Agent or the
Custodial Agent may in addition elect to commence an interpleader action or seek
other judicial relief or orders as the Collateral Agent or the Custodial Agent,
as the case may be, may deem necessary. Notwithstanding anything contained
herein to the contrary, neither the Collateral Agent nor the Custodial Agent
shall be required to take any action that is in its opinion contrary to law or
to the terms of this Agreement, or which would in its opinion subject it or any
of its officers, employees or directors to liability.
Section 8.8 Resignation of Collateral Agent. Subject to the appointment
and acceptance of a successor Collateral Agent or Custodial Agent as provided
below, (a) the Collateral Agent and the Custodial Agent may resign at any time
by giving notice thereof to the Company and the Purchase Contract Agent as
attorney-in-fact for the Holders of Income PRIDES or Growth PRIDES, (b) the
Collateral Agent and the Custodial Agent may be removed at any time by the
Company and (c) if the Collateral Agent or the Custodial Agent fails to perform
any of its material obligations hereunder in any material respect for a period
of not less than 20 days after receiving written notice of such failure by the
Purchase Contract Agent and such failure shall be continuing, the Collateral
Agent or the Custodial Agent may be removed by the Purchase Contract Agent. The
Purchase Contract Agent shall promptly notify the Company of any removal of the
Collateral Agent pursuant to clause (c) of the immediately preceding sentence.
Upon any such resignation or removal, the Company shall have the right to
appoint a successor Collateral Agent or Custodial Agent, as the case may be. If
no successor Collateral Agent or Custodial Agent, as the case may be, shall have
been so appointed and shall have accepted such appointment within 30 days after
the retiring Collateral Agent's or Custodial Agent's giving of notice of
resignation or such removal, then the retiring Collateral Agent or Custodial
Agent, as the case may be, may petition any court of competent jurisdiction for
the appointment of a successor Collateral Agent or Custodial Agent, as the case
may be. Each of the Collateral Agent and the Custodial Agent shall be a bank
which has an office in New York, New York with a combined capital and surplus of
at least $50,000,000. Upon the acceptance of any appointment as Collateral Agent
or Custodial Agent, as the case may be, hereunder by a successor Collateral
Agent or Custodial Agent, as the case may be, such successor shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent or Custodial Agent, as the case may be, and the
retiring Collateral Agent or Custodial Agent, as the case may be, shall take all
appropriate action to transfer any money and property held by it hereunder
(including the Collateral) to such successor. The retiring Collateral Agent or
Custodial Agent shall, upon such succession, be discharged from its duties and
obligations as Collateral Agent or Custodial Agent hereunder. After any retiring
Collateral Agent's or Custodial Agent's resignation hereunder as Collateral
Agent or Custodial Agent, the provisions of this Section 8.8 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Collateral Agent or Custodial
20
Agent. Any resignation or removal of the Collateral Agent hereunder shall be
deemed for all purposes of this Agreement as the simultaneous resignation or
removal of the Custodial Agent and the Securities Intermediary.
Section 8.9 Right to Appoint Agent or Advisor. The Collateral Agent shall
have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
Section 8.10 Survival. The provisions of this Article 8 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent or the Custodial Agent.
Section 8.11 Exculpation. Anything in this Agreement to the contrary
notwithstanding, in no event shall any of the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, employees or agents be
liable under this Agreement to any third party for indirect, special, punitive,
or consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent, the Custodial Agent or the Securities Intermediary, or any of them,
incurred without any act or deed that is found to be attributable to gross
negligence, bad faith or willful misconduct on the part of the Collateral Agent,
the Custodial Agent or the Securities Intermediary.
ARTICLE IX
Amendment.
Section 9.1 Amendment Without Consent of Holders. Without the consent of
any Holders or the holders of any Separate Preferred Shares, the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the
Company; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company so long as such covenants or such surrender do not
adversely affect the validity, perfection or priority of the security
interests granted or created hereunder; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or
Purchase Contract Agent; or
21
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such
provisions herein, or to make any other provisions with respect to
such matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
Section 9.2 Amendment with Consent of Holders. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Income PRIDES and Growth PRIDES;
provided, however, that no such supplemental agreement shall, without the
consent of the Holder of each Outstanding Income PRIDES and Growth PRIDES
adversely affected thereby,
(1) change the amount or type of Collateral underlying an Income
PRIDES or Growth PRIDES (except for the rights of holders of Income
PRIDES to substitute the Treasury Securities for the Pledged Preferred
Shares, or the rights of Holders of Growth PRIDES to substitute
Preferred Shares for the Pledged Treasury Securities), impair the
right of the Holder of any Income PRIDES or Growth PRIDES to receive
distributions on the underlying Collateral or otherwise adversely
affect the Holder's rights in or to such Collateral; or
(2) otherwise effect any action that would require the consent
of the Holder of each Outstanding Income PRIDES or Growth PRIDES
affected thereby pursuant to the Purchase Contract Agreement if such
action were effected by an agreement supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 9.3 Execution of Amendments. In executing any amendment permitted
by this Section, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent shall be entitled to receive and
(subject to Section 6.1 hereof, with respect to the Collateral Agent, and
Section 7.1 of the Purchase Contract Agreement, with respect to the Purchase
Contract Agent) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by this
Agreement and that all conditions precedent, if any, to the execution and
delivery of such amendment have been satisfied.
22
Section 9.4 Effect of Amendments. Upon the execution of any amendment
under this Article 9, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
Section 9.5 Reference to Amendments. Security Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Section may, and shall if required by the Collateral
Agent or the Purchase Contract Agent, bear a notation in form approved by the
Purchase Contract Agent and the Collateral Agent as to any matter provided for
in such amendment. If the Company shall so determine, new Security Certificates
so modified as to conform, in the opinion of the Collateral Agent, the Purchase
Contract Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for Outstanding Security Certificates.
ARTICLE X
Miscellaneous.
Section 10.1 No Waiver. No failure on the part of any party hereto or any
of its agents to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by any party hereto or
any of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
Section 10.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting
the foregoing, the above choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent and the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account. The Company,
the Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, hereby submit to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
Section 10.3 Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents
23
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 10.4 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the Income
PRIDES and Growth PRIDES, by their acceptance of the same, shall be deemed to
have agreed to be bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the Purchase Contract
Agent.
Section 10.5 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 10.6 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
Section 10.7 Expenses, Etc. The Company agrees to reimburse the
Collateral Agent and the Custodial Agent for: (a) all reasonable out-of-pocket
costs and expenses of the Collateral Agent and the Custodial Agent (including,
without limitation, the reasonable fees and expenses of counsel to the
Collateral Agent and the Custodial Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
Section 10.8 Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
24
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the
obligations of Holders of Securities under the related Purchase Contracts,
or any other amendment or waiver of any term of, or any consent to any
departure from any requirement of, the Purchase Contract Agreement or any
Purchase Contract or any other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
Section 10.9 Consent to Jurisdiction; Miscellaneous. Each of the parties
hereto hereby expressly and irrevocably submits to the non-exclusive
jurisdiction of any competent court in the place of its domicile and any United
States Federal or New York State court sitting in the Borough of Manhattan in
The City of New York in any action, suit or proceeding arising out of or
relating to this Underwriting Agreement or the transactions contemplated hereby
to the extent that such court has subject matter jurisdiction over the
controversy, and expressly and irrevocably waives, to the extent permitted under
applicable law, any immunity from the jurisdiction thereof and any claim or
defense in such action, suit or proceeding based on a claim of improper venue,
forum non conveniens or any similar basis to which it might otherwise be
entitled in any such action, suit or proceeding. The Company irrevocably
appoints ACE USA, Inc., 1133 Avenue of the Americas, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 as its authorized agent in the Borough of Manhattan in The City of
New York upon which process may be served in any such action, suit or
proceeding, and agrees that service of process upon such agent, and written
notice of said service to the Company by the person serving the same to the
address provided in Section 10.9, shall be deemed in every respect effective
service of process upon the Company, in any such action, suit or proceeding.
The Company further agrees to take any and all action as may be necessary to
maintain such designation and appointment of such agent in full force and effect
for a period of seven years from the date of this Agreement.
Section 10.10 Waiver of Immunities. To the extent that the Company or
any of its properties, assets or revenues may have or may hereafter become
entitled to, or have attributed to them, any right of immunity, on the grounds
of sovereignty, from any legal action, suit or proceeding, from set-off or
counterclaim, from the jurisdiction of any court, from service of process, from
attachment upon or prior to judgment, or from attachment in aid of execution of
judgment, or from execution of judgment, other legal process or proceeding for
the giving of any relief or for the enforcement of any judgment, in any
jurisdiction in which proceedings may at any time be commenced, with respect to
their obligations, liabilities or any other matter under or arising out of or in
connection with this Agreement or any additional agreement, the Company hereby
irrevocably and unconditionally, to the extent permitted by applicable law,
waives and agrees not to plead or claim any such immunity and consents to such
relief and enforcement.
Section 10.11 Judgement Currency. The Company agrees to indemnify each of
the Purchase Contract Agent and the Collateral Agent against any loss incurred
by such party as a
25
result of any judgment or order being given or made for any amount due hereunder
and such judgment or order being expressed and paid in a currency (the "Judgment
Currency") other than United States dollars and as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the Judgment Currency for the purpose of such judgment or order,
and (ii) the rate of exchange at which such party is able to purchase United
States dollars with the amount of the Judgment Currency actually received by
such party. The foregoing indemnity shall constitute a separate and independent
obligation of the Company and shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of, or conversion into, the relevant currency.
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
ACE LIMITED
By: _______________________________
Name:
Title:
Address for Notices:
ACE Limited
The ACE Building
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx XX 00 Xxxxxxx
Xxxxxxxxx: General Counsel and Secretary
Telecopy:
THE BANK OF NEW YORK, as Purchase Contract Agent
and as attorney-in-fact of the Holders from time
to time of the Income PRIDES and Growth PRIDES
By: _______________________________
Name:
Title:
Address for Notices:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
THE BANK OF NEW YORK, as Collateral Agent,
Custodial Agent and as Securities Intermediary
By: _______________________________
Name:
Title:
27
Address for Notices:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
28
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: FELINE PRIDES of ACE Limited (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the Pledge
Agreement, dated as of April __, 2000 (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Income PRIDES] [Growth PRIDES] from time to time, that the
holder of the Securities listed below (the "Holder") has elected to substitute
[$_____ aggregate principal amount at maturity of Treasury Securities] [$_______
Stated Amount of Preferred Shares in exchange for an equal Value of [Pledged
Preferred Shares] [Pledged Treasury Securities] held by you in accordance with
the Pledge Agreement and has delivered to us a notice stating that the Holder
has Transferred [Treasury Securities] [Preferred Shares] to you, as Collateral
Agent. We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Preferred Securities], to release the [Preferred Shares]
[Treasury Securities] related to such [Income PRIDES] [Growth PRIDES] to us in
accordance with the Holder's instructions. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Date:
---------------------------- -----------------------------------------
By:
-------------------------------------
Name:
Title:
Signature Guarantee:
-------------------------------------
A-1
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Shares] for the [Pledged Preferred Shares]
[Pledged Treasury Securities]:
________________________________ _________________________________
Name Social Security or other Taxpayer
Identification Number, if any
________________________________
Address
________________________________
________________________________
A-2
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: FELINE PRIDES of ACE Limited (the "Company")
The undersigned Holder hereby notifies you that it has delivered to The
Bank of New York, as Collateral Agent, [$_______ aggregate principal amount at
maturity of Treasury Securities] [$ aggregate Stated Amount of Preferred Shares
in exchange for an equal Value of [Pledged Preferred Shares] [Pledged Treasury
Securities] held by the Collateral Agent, in accordance with Section 4.1 of the
Pledge Agreement, dated April _ _ , 2000 (the "Pledge Agreement"), between you,
the Company and the Collateral Agent. The undersigned Holder hereby instructs
you to instruct the Collateral Agent to release to you on behalf of the
undersigned Holder the [Pledged Preferred Shares] [Pledged Treasury Securities]
related to such [Income PRIDES] [Growth PRIDES]. Capitalized terms used herein
but not defined shall have the meaning set forth in the Pledge Agreement.
Date:___________________ _________________________
Signature Guarantee:____________________
Please print name and address of Registered Holder:
________________________ _________________________
Name Social Security or other
Taxpayer Identification
Number, if any
________________________
Address
________________________
________________________
B-1
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: Preferred Shares of ACE Limited (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c) of
the Pledge Agreement, dated as of April __, 2000 (the "Pledge Agreement"), among
the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and yourselves, as Purchase Contract Agent and as attorney-in-
fact for the Holders of Income PRIDES and Growth PRIDES from time to time, that
the undersigned elects to deliver $__________ stated liquidation amount of
Preferred Shares for delivery to the Remarketing Agent on the fourth Business
Day immediately preceding the Purchase Contract Settlement Date for remarketing
pursuant to Section 4.6(c) of the Pledge Agreement. The undersigned will, upon
request of the Remarketing Agent, execute and deliver any additional documents
deemed by the Remarketing Agent or by the Company to be necessary or desirable
to complete the sale, assignment and transfer of the Preferred Shares tendered
hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of such
remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions." The undersigned hereby instructs you, in the event of
Failed Remarketing, upon receipt of the Preferred Shares 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 Preferred Shares tendered hereby and that the undersigned is the
record owner of any Preferred Shares tendered herewith in physical form or a
participant in The Depositary Trust Company ("DTC") and the beneficial owner of
any Preferred Shares tendered herewith by book-entry transfer to your account at
DTC and (ii) agrees to be bound by the terms and conditions of Section 4.6(c) of
the Pledge Agreement. Capitalized terms used herein but not defined shall have
the meaning set forth in the Pledge Agreement.
C-1
Date:
------------------------
-----------------------------------------
By:
-------------------------------------
Name:
Title:
Signature Guarantee:
--------------------
Please print name and address:
------------------------------ -----------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
------------------------------
Address
------------------------------
------------------------------
C-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 Shares 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 Shares which are in book-entry
form should be credited to the account at The Depositary Trust Company set forth
below.
-------------------------------------
DTC Account Number
Name of Account Party:
--------------------------
C-3
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: Preferred Shares of ACE Limited (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c) of
the Pledge Agreement, dated as of April __, 2000 (the "Pledge Agreement") among
the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and yourselves, as Purchase Contract Agent and as attorney-in-
fact for the Holders of Income PRIDES and Growth PRIDES from time to time, that
the undersigned elects to withdraw the $_____ aggregate stated liquidation
amount of Preferred Shares delivered to the Custodial Agent on ___________, for
remarketing pursuant to Section 4.6(c) of the Pledge Agreement. The undersigned
hereby instructs you to return such Preferred Shares to the undersigned in
accordance with the undersigned's instructions. With this notice, the
Undersigned hereby agrees to be bound by the terms and conditions of Section
4.6(c) of the Pledge Agreement. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date:
---------------------------- -----------------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Signature Guarantee:
--------------------
Please print name and address:
---------------------------------- -----------------------------------------
(Name) Social Security or other Taxpayer
-----------------------------------------
Identification Number, if any
----------------------------------
D-1
Address
----------------------------------
----------------------------------
D-2
A. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Preferred Shares 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 Shares 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:
--------------------------
D-3
