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EXHIBIT 4.22
THE COASTAL CORPORATION,
THE CHASE MANHATTAN BANK
as Collateral Agent, Custodial Agent
and Securities Intermediary
AND
THE BANK OF NEW YORK
as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of , 1999
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TABLE OF CONTENTS
Page
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RECITALS......................................................................1
Section 1. Definitions.......................................................3
Section 2. Pledge; Control and Perfection...................................10
Section 2.1. The Pledge...............................................10
Section 2.2. Control and Perfection...................................13
Section 3. Distributions on Pledged Collateral..............................15
Section 4. Substitution, Release, Repledge and Settlement
of Debentures....................................................17
Section 4.1. Substitution for Debentures and the
Creation of Growth PRIDES...............................17
Section 4.2. Substitution of Treasury Securities
and the Creation of Income PRIDES.......................18
Section 4.3. Termination Event........................................19
Section 4.4. Cash Settlement..........................................20
Section 4.5. Early Settlement.........................................22
Section 4.6. Application of Proceeds; Settlement......................23
Section 5. Voting Rights -- Debentures......................................26
Section 6. Rights and Remedies; Tax Event Redemption........................27
Section 6.1. Rights and Remedies of the Collateral Agent..............27
Section 6.2. Tax Event Redemption.....................................28
Section 6.3. Substitutions............................................29
Section 7. Representations and Warranties; Covenants........................29
Section 7.1. Representations and Warranties...........................29
Section 7.2. Covenants................................................30
Section 8. The Collateral Agent.............................................31
Section 8.1. Appointment, Powers and Immunities.......................31
Section 8.2. Instructions of the Company..............................32
Section 8.3. Reliance.................................................33
Section 8.4. Rights in Other Capacities...............................33
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Section 8.5. Non-Reliance ............................................34
Section 8.6. Compensation and Indemnity...............................34
Section 8.7. Failure to Act...........................................35
Section 8.8. Resignation..............................................36
Section 8.9. Right to Appoint Agent or Advisor........................37
Section 8.10. Survival.................................................37
Section 8.11. Exculpation..............................................37
Section 9. Amendment........................................................38
Section 9.1. Amendment Without Consent of
Holders.................................................38
Section 9.2. Amendment with Consent of Holders........................38
Section 9.3. Execution of Amendments..................................39
Section 9.4. Effect of Amendments.....................................40
Section 9.5. Reference to Amendments..................................40
Section 10. Miscellaneous...................................................40
Section 10.1. No Waiver...............................................40
Section 10.2. Governing Law...........................................41
Section 10.3. Notices.................................................41
Section 10.4. Successors and Assigns..................................42
Section 10.5. Counterparts............................................42
Section 10.6. Severability............................................42
Section 10.7. Expenses, etc...........................................42
Section 10.8. Security Interest Absolute..............................43
EXHIBIT A INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT
EXHIBIT C INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
EXHIBIT D INSTRUCTION TO CUSTODIAL AGENT REGARDING WITHDRAWAL
FROM REMARKETING
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of , 1999 (this "Agreement"), among The
Coastal Corporation, a Delaware corporation (the "Company"), The Chase Manhattan
Bank, 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 hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued FELINE PRIDES of the
Company, having a stated amount of $ (the "Stated Amount") per FELINE PRIDES.
The FELINE PRIDES will initially consist of (A) units (referred to
as "Income PRIDES") with a stated amount, per Income PRIDES, equal to the Stated
Amount and (B) units (referred to as "Growth PRIDES" and, together with the
Income PRIDES, the "Securities") with a stated amount, per Growth PRIDES, equal
to the Stated Amount. Each Income PRIDES will initially consist of (a) a stock
purchase contract (the "Purchase Contract") under which (i) the holder will
purchase from the Company not later than 16, 2002 (the "Purchase Contract
Settlement Date"), for an amount of cash equal to the Stated Amount, a number of
newly issued shares of common stock, $0.33 1/3 par value per share (the "Common
Stock"), of the Company equal to the Settlement Rate (as defined below) and (ii)
the Company will pay the Holder Contract Adjustment Payments at the rate of %
of the Stated Amount per annum and (b) either beneficial ownership of a
Debenture (as defined below) or, upon the occurrence of a Tax Event Redemption
the Applicable Ownership Interest of the Treasury Portfolio. Each Growth PRIDES
will initially consist of (a) a Purchase Contract under which (i) the holder
will purchase from the Company on the Purchase Contract Settlement Date, for an
amount in cash equal to the Stated Amount, a number of newly issued shares of
Common Stock of the Company, equal to the Settlement Rate, and (ii) the Company
will pay the Holder Contract Adjustment
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Payments at the rate of o% of the Stated Amount per annum, and (b) a 1/100
undivided beneficial interest in a zero-coupon U.S. Treasury Security (CUSIP No.
o) having a principal amount at maturity equal to $1,000 and maturing on o 15,
2002 (the "Treasury Securities").
Pursuant to the terms of the Indenture (as defined below) the Company
will issue $ principal amount of Debentures (the "Debentures"), each
having a principal amount per Debenture equal to $25.
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Debentures, any
Applicable Ownership Interest in the Treasury Portfolio and the Treasury
Securities to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof. Upon such pledge,
the Pledged Debentures or the Applicable Ownership Interests in the Treasury
Portfolio, as the case may be, and the Pledged 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:
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Section 1. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(b) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in the
Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board
Resolution, (iv) Cash Settlement, (v) Certificate, (vi) Contract
Adjustment Payments, (vii) Debentures, (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;
(xix) Income PRIDES; (xx) Growth PRIDES; 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.
"Applicable Ownership Interest" means, with respect to an Income
PRIDES and the Treasury Securities in the Treasury Portfolio, (A) a 1/25, or
2.5%, undivided beneficial ownership interest in a $1,000 principal or interest
amount of a principal or interest strip in a U.S. Treasury Security included in
such Treasury Portfolio which matures on or prior to o 15, 2002 and (B) for
each scheduled interest payment date on the Debentures that occurs after the Tax
Event Redemption Date, a % undivided beneficial ownership interest in a
$1,000 face amount of such U.S. Treasury Security which is a principal or
interest strip maturing on such date.
"Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to o 16, 2002,
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the aggregate principal amount of the Debentures which are components of Income
PRIDES on the Tax Event Redemption Date or (ii) if the Tax Event Redemption
occurs on or after o 16, 2002, the aggregate principal amount of the Debentures
outstanding on such Tax Event Redemption Date.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State of
New York) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the securities account (number o)
maintained at o in the name "The Bank of New York, as Purchase Contract Agent on
behalf of the holders of certain securities of The Coastal Corporation,
Collateral Account subject to the security interest of The Chase Manhattan Bank,
as Collateral Agent, for the benefit of The Coastal Corporation, as pledgee" and
any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this instrument.
"Common Stock" has the meaning specified in the Recitals.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
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"Custodial Agent" has the meaning specified in the first paragraph of
this instrument.
"Debentures" has the meaning specified in the Recitals.
"Debenture Trustee" means Xxxxxx Trust and Savings Bank, as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Indenture" means, collectively, the Base Indenture and the Seventh
Supplemental Indenture, and any other indentures supplemental thereto pursuant
to which the Debentures are to be issued.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Permitted Investments" means any one of the following which shall
mature not later than the next succeeding Business Day (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US $200.0 million at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which commercial paper has a
rating at the time of purchase at least equal to "A- 1" by Standard & Poor's
Ratings Services ("S&P") or at least equal to "P-1" by Xxxxx'x Investors
Service, Inc. ("Moody's"); and (v) investments in money market funds registered
under the Investment Company Act of 1940, as amended, rated in the highest
applicable rating category by S&P or Moody's.
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"Person" and "person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Debentures" has the meaning specified in Section 2.1 hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Primary Treasury Dealer" means a primary U.S. government securities
dealer in The City of New York.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, collection or disposition of the Collateral or any
proceeds thereof.
"Purchase Contract" has the meaning specified in the Recitals.
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the
Recitals.
"Purchase Contract Settlement Date" has the meaning specified in the
Recitals.
"Purchase Price" has the meaning specified in Section 5.1 of the
Purchase Contract Agreement.
"Quotation Agent" means (i) Xxxxxxx Xxxxx Government Securities, Inc.
and its respective successors, provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer or (ii) any other Primary Treasury Dealer
selected by the Company.
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"Redemption Amount" means for each Debenture, the product of (i) the
principal amount of such Debenture and (ii) a fraction whose numerator is the
Treasury Portfolio Purchase Price and whose denominator is the Applicable
Principal Amount.
"Redemption Price" means the redemption price per Security equal to
the Redemption Amount plus any accrued and unpaid Distributions to the date of
redemption or, in the case of any redemption in connection with the final
maturity of the Debentures, an amount per Debenture equal to the redemption
price for $25 in principal amount of Debentures plus accrued and unpaid
Distributions to the date of redemption.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section
8-102(a)(17) of the Code.
"Separate Debentures" means any Debentures that are not Pledged
Debentures.
"Stated Amount" has the meaning specified in the Recitals.
"Supplemental Remarketing Agreement" means the Supplemental
Remarketing Agreement, as defined in the Remarketing Agreement.
"Tax Event" means the receipt by the Company of an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, or change (including any
announced proposed change) in, the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any amendment to or change in an interpretation
or application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the generally
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accepted position on the date the Securities are issued, which amendment, change
or proposed change is effective or which interpretation or pronouncement is
announced on or after the date of the first issuance of Debentures under the
Indenture, there is more than an insubstantial risk that (i) interest payable by
the Company on the Debentures would not be deductible, in whole or in part, by
the Company for United States federal income tax purposes.
"Tax Event Redemption" means, if a Tax Event shall occur and be
continuing, the redemption of the Debentures, at the option of the Company, in
whole but not in part, on not less than 30 days nor more than 60 days notice.
"Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, except as otherwise expressly provided herein, 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;
(ii) in the case of Collateral consisting of securities
maintained in book-entry form by causing a "securities
intermediary" (as defined in
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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 Portfolio" means, with respect to the Applicable Principal
Amount of Debentures (a) if the Tax Event Redemption Date occurs prior to o 16,
2002, a portfolio of zero-coupon U.S. Treasury Securities consisting of (i)
principal or interest strips of U.S. Treasury Securities which mature on or
prior to o 15, 2002 in an aggregate amount equal to the Applicable Principal
Amount and (ii) with respect to each scheduled interest payment date on the
Debentures that occurs after the Tax Event Redemption Date, principal or
interest strips of U.S. Treasury Securities which mature on or prior to such
date in an aggregate amount equal to the aggregate interest payment that would
be due on the Applicable Principal Amount of the Debentures on such date, and
(b) if the Tax Event Redemption Date occurs after 16, 2002, a portfolio of
zero-coupon U.S. Treasury Securities consisting of (i) principal or interest
strips of U.S. Treasury Securities which mature on or prior to o 15, 2004 in an
aggregate amount equal to the Applicable Principal Amount and (ii) with respect
to each scheduled interest payment date on the Debentures that occurs after the
Tax Event Redemption Date, principal or interest strips of such U.S. Treasury
Securities which mature on or prior to such date in an aggregate amount equal to
the aggregate interest payment that would be due on the Applicable Principal
Amount of the Debentures on such date.
"Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by the Primary Treasury Dealer to the Quotation Agent on the third
Business Day immediately preceding the Tax Event Redemption Date for the
purchase
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of the Treasury Portfolio for settlement on the Tax Event Redemption Date.
"Treasury Securities" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means, as
to (i) a Debenture, the stated liquidation amount thereof, (ii) Cash, the face
amount thereof and (iii) Treasury Securities, the aggregate principal amount
thereof at maturity.
Section 2. Pledge; Control and Perfection.
Section 2.1. The Pledge. (a) The Holders from time to time as
beneficial owners of the Collateral (as defined below) acting through the
Purchase Contract Agent, as their attorney-in-fact, and the Purchase Contract
Agent, as nominal owner of the Collateral (as defined below), each 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 Debentures and Treasury Securities constituting a part of the
Securities and any Treasury Securities delivered in exchange for any Debentures
(or, if applicable, the Applicable Ownership Interest in the Treasury
Portfolio), any Debentures (or if applicable, the Applicable Ownership Interest
in the Treasury Portfolio) delivered in exchange for any Treasury Securities, in
accordance with Section 4 hereof, in each case that have been Transferred to or
received by the Collateral Agent and not released by the Collateral Agent to
such Holders under the provisions of this Agreement; (b) in payments made by
Holders pursuant to Section 4.4; (c) in the Collateral Account and all
securities, financial assets, Cash and other property credited thereto and all
Security Entitlements related thereto; (d) in the Treasury Portfolio purchased
on behalf of the Holders of Income PRIDES by the Collateral Agent upon the
occurrence of a Tax Event Redemption as provided in Section 6.2 and (e) all
Proceeds of the foregoing (all of the foregoing, collectively, the
"Collateral"). Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial
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Holders of the Securities, shall cause the Debentures comprising a part of the
Income PRIDES, and the Treasury Securities comprising a part of the Growth
PRIDES, to be Transferred to the Collateral Agent for the benefit of the
Company. Such Debentures shall be Transferred by physically delivering such
Debentures to the Securities Intermediary endorsed in blank (or accompanied by a
stock or bond power indorsed in blank) and causing the Securities Intermediary
to credit the Collateral Account with such Debentures and sending the Collateral
Agent a confirmation of the deposit of such Debentures. 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 as provided in Section 4.1
hereof in exchange for the release by the Collateral Agent on behalf of the
Company of Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, with an aggregate stated liquidation
amount equal to the aggregate principal amount of the Treasury Securities so
Transferred, in the case of Debentures, or with an appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio equal to the aggregate principal amount of the
Treasury Securities so transferred, in the event that a Tax Event Redemption has
occurred, to the Purchase Contract Agent on behalf of such Holder. In the event
that a Holder of Growth PRIDES so elects, such Holder may Transfer Debentures or
the appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio to the Collateral Agent for
the benefit of the Company as provided in Section 4.2 hereof in exchange for the
release by the Collateral Agent on behalf of the Company of Treasury Securities
with an aggregate principal amount at maturity equal to the aggregate stated
liquidation amount of the Debentures or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio so transferred to the Purchase Contract Agent on behalf of
such Holder. Treasury Securities and the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as applicable, shall be Transferred to the
Collateral Account maintained by the Collateral Agent at the Securities
Intermediary by book-entry transfer to the Collateral Account in accordance with
the TRADES Regulations and other applicable law and by the notation by the
Securities Intermediary on its
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books that a Security Entitlement with respect to such Treasury Securities or
appropriate Applicable Ownership Interest of the Treasury Portfolio, has been
credited to the Collateral Account.
(b) For purposes of perfecting the Pledge under applicable law,
including, to the extent applicable, the TRADES Regulations or the Uniform
Commercial Code as adopted and in effect in any applicable jurisdiction, the
Collateral Agent shall be the agent of the Company as provided herein. The
pledge provided in this Section 2.1 is herein referred to as the "Pledge" and
the Debentures or Treasury Securities subject to the Pledge, excluding any
Debentures that are delivered pursuant to Section 6.2 hereof or Treasury
Securities released from the Pledge as provided in Section 4 hereof, are
hereinafter referred to as "Pledged Debentures" 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
Debentures or any other securities held in physical form in its name.
Except as may be required in order to release Debentures 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 Debentures as
specified herein, neither the Collateral Agent nor the Securities Intermediary
shall relinquish physical possession of any certificate evidencing a Debentures
prior to the termination of this Agreement, except they may be held in any
clearing corporation in an account including only assets of customers of the
Collateral Agent or Securities Intermediary. If it becomes necessary for the
Securities Intermediary to relinquish physical possession of a certificate in
order to release a portion of the Debentures evidenced thereby from the Pledge,
the Securities Intermediary shall use its best efforts to obtain physical
possession of a replacement certificate evidencing any Debentures remaining
subject to the Pledge hereunder registered to it or indorsed in blank (or
accompanied by a stock or bond power indorsed in blank) within fifteen days of
the date it relinquished possession. The Securities Intermediary shall promptly
notify the Company
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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, and the Purchase Contract Agent each hereby authorize
and direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent on behalf of the Company may give in writing with respect to
the Collateral Account, the Collateral credited thereto and any Security
Entitlements with respect to any thereof. Such instructions and entitlement
orders may, without limitation, direct the Securities Intermediary to transfer,
redeem, sell, liquidate, assign, deliver or otherwise dispose of the Debentures,
the Treasury Securities, the Treasury Portfolio, and any Security Entitlements
with respect thereto and to pay and deliver any income, proceeds or other funds
derived therefrom to the Company. The 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
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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 Debentures, the Treasury Portfolio or Treasury
Securities) will be promptly credited to the Collateral Account; (iii) the
Collateral Account is an account to which financial assets are or may be
credited, and the Securities Intermediary shall, subject to the terms of this
Agreement, treat the Purchase Contract Agent as entitled to exercise the rights
of any financial asset credited to the Collateral Account; (iv) the Securities
Intermediary has not entered into, and until the termination of the this
Agreement will not enter into, any agreement with any other person relating to
the Collateral Account and/or any financial assets credited thereto pursuant to
which it has agreed to comply 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.
(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.
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(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 attorneys-in-fact to take on behalf of, and in
the name, place and stead of, the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such
power-of-attorney shall not be deemed to require of the Collateral Agent any
specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder.
Section 3. Distributions on Pledged Collateral. So long as the
Purchase Contract Agent is the registered owner of the Pledged Debentures, it
shall receive all payments thereon. If the Pledged Debentures are reregistered,
such that the Collateral Agent becomes the registered holder, all payments of
interest or, if applicable, the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, or interest payments on, the Pledged Debentures or on the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, 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) interest payments with respect to the
Pledged Debentures or the appropriate Applicable Ownership Interest
(as specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, and (B) any payments of the
Stated Amount or, if applicable, the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio with respect to any Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, that have been released from the Pledge pursuant
to Section 4.1 or 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
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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 4.2 or 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
(iii) In the case of payments of interest on any Pledged
Debentures or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, or the principal of any
Pledged Treasury Securities, to the Company on the Purchase Contract
Settlement Date in accordance with the procedure set forth in Section
4.6(a) or 4.6(b) hereof, in full satisfaction of the respective
obligations of the Holders under the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein shall be
applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount or, if
applicable, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) on account of any Debenture or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as
applicable, that, at the time of such payment, is subject to the Pledge, or a
Holder of a
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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.
Section 4. Substitution, Release, Repledge and Settlement of
Debentures.
Section 4.1. Substitution for Debentures and the Creation of Growth
PRIDES. At any time on or prior to the fifth Business Day immediately preceding
the Purchase Contract Settlement Date (or on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, if a Tax Event
Redemption has occurred), a Holder of Income PRIDES shall have the right to
substitute Treasury Securities for the Pledged Debentures (or, if a Tax Event
Redemption has occurred, the appropriate Applicable Ownership Interest (as
defined in clause (A) of the definition of such term) in the Treasury Portfolio)
securing such Holder's obligations under the Purchase Contract(s) comprising a
part of its Income PRIDES in integral multiples of 40 Income PRIDES by (a)
Transferring to the Collateral Agent Treasury Securities having a Value equal to
the aggregate principal amount of the Pledged Debentures (or appropriate
Applicable Ownership Interest in the Treasury Portfolio as the case may be), to
be released and (b)(i) 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 date that Contract Adjustment Payments were made to the
date of substitution on the Growth PRIDES being created by the Holder, over the
Contract Adjustment Payments that have accrued over the same time period on the
related Income PRIDES, which amount the Purchase Contract Agent shall promptly
remit to the Company, and (ii) transferring 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 the relevant Treasury Securities to the Collateral Agent pursuant to
clause (a) above (stating
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the Value of the Treasury Securities Transferred by such Holder) and requesting
that the Purchase Contract Agent instruct the Collateral Agent to release from
the Pledge the Pledged Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, related to such Income
PRIDES. The Purchase Contract Agent shall instruct the Collateral Agent in the
form provided in Exhibit A; provided, however, that if a Tax Event Redemption
has occurred and the Treasury Portfolio has become a component of the Income
PRIDES, Holders of Income PRIDES may make such substitution only in integral
multiples of Income PRIDES at any time on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date. Upon receipt of
Treasury Securities from a Holder of Income PRIDES and the related instruction
from the Purchase Contract Agent, the Collateral Agent shall release the Pledged
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, and shall promptly Transfer to the securities
account specified by the Purchase Contract Agent such Pledged Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, free and clear of any lien, pledge or security interest created hereby,
to the Purchase Contract Agent. All items Transferred and/or substituted 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 (or on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date, if a
Tax Event Redemption has occurred), a Holder of Growth PRIDES shall have the
right to create or recreate Income PRIDES in integral multiples of 40 Income
PRIDES by (a) Transferring to the Collateral Agent Debentures (or the
appropriate Applicable Ownership Interest (as defined in clause (A) of the
definition of such term) of the Treasury Portfolio) having a Value equal to the
Value of the Pledged Treasury Securities to be released and (b) 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
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transferred the relevant amount of Debentures (or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be) 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 underlying such Growth PRIDES. The Purchase Contract
Agent shall instruct the Collateral Agent in the form provided in Exhibit A;
provided, however, that if a Tax Event Redemption has occurred and the Treasury
Portfolio has become a component of the Income PRIDES, Holders of Growth PRIDES
may make such substitution only in integral multiples of Growth PRIDES, at any
time on or prior to the Business Day immediately preceding the Purchase Contract
Settlement Date. Upon receipt of the Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, from such
Holder and the instruction from the Purchase Contract Agent, the Collateral
Agent shall release the Treasury Securities having a corresponding aggregate
principal amount from the Pledge and shall promptly Transfer such Treasury
Securities, free and clear of any lien, pledge or security interest created
hereby, to the Purchase Contract Agent.
Section 4.3. Termination Event. Upon receipt by the Collateral Agent
of written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall promptly Transfer any Pledged Debentures (or the
Applicable Ownership Interest of the Treasury Portfolio if a Tax Event
Redemption has occurred) and Pledged Treasury Securities to the Purchase
Contract Agent for the benefit of the Holders of the 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
Debentures, the Treasury Portfolio 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
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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 Debentures, the Treasury Portfolio or the Pledged Treasury
Securities, as the case may be, as provided in this Section 4.3, then the
Purchase Contract Agent shall within fifteen days after the occurrence of such
Termination Event commence an action or proceeding in the court with
jurisdiction of the Company's case under the Bankruptcy Code seeking an order
requiring the Collateral Agent to effectuate the release and transfer of all
Pledged Debentures, the Treasury Portfolio or of the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3 or (ii) commence
an action or proceeding 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 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
Purchase 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
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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 (if a Tax Event Redemption has not
occurred) fails to notify the 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 Debentures pursuant to the remarketing as described
in Section 5.4(b) of the Purchase Contract Agreement, which is incorporated
herein by reference. If a Holder of an Income PRIDES does notify the 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, the
Debentures of such a Holder will not be remarketed but instead the Collateral
Agent, for the benefit of the Company, will exercise its rights as a secured
party with respect to such Debentures at the direction of the Company to retain
or dispose of the Collateral in accordance with applicable law. In addition, in
the event of a Failed Remarketing as described in Section 5.4(b) of the Purchase
Contract Agreement, such Failed Remarketing shall constitute an additional 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 Debentures at the direction of the Company to retain or dispose of the
Collateral in accordance with applicable law.
(c) If a Holder of an Income PRIDES (if a Tax Event Redemption has
occurred) 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 an Income PRIDES (if a Tax Event
Redemption has occurred) does notify the 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
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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 the appropriate Applicable Ownership Interest of the Treasury
Portfolio, held by the Collateral Agent on the Business Day immediately
preceding the Purchase Contract Settlement Date, the principal amount of the
appropriate Applicable Ownership Interest of the Treasury Portfolio, received by
the Collateral Agent shall, upon written direction of the Company, be invested
promptly in overnight Permitted Investments. On the Purchase Contract Settlement
Date, an amount equal to the Purchase Price will be remitted to the Company as
payment thereof without receiving any instructions from the Holder. In the event
the sum of the proceeds from the appropriate Applicable Ownership Interest of
the Treasury Portfolio 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 shall distribute such excess to the
Purchase Contract Agent for the benefit of the Holder of the related 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 Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio 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, in each case with an aggregate liquidation amount or
principal amount, as the case may be, equal to the product of (i) the Stated
Amount times (ii) the number of such Purchase Contracts as to which such Holders
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have elected to effect Early Settlement and shall Transfer all such Pledged
Debentures, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or the Pledged Treasury Securities, as the case may be, free and clear
of the Pledge created hereby, to the Purchase Contract Agent for the benefit of
such Holders.
Section 4.6. Application of Proceeds; Settlement. (a) In the event a
Holder of Income PRIDES (if a Tax Event Redemption has not occurred) has not
elected to make an effective Cash Settlement by notifying the Purchase Contract
Agent in the manner provided for in paragraph 5.4(a)(i) in the Purchase Contract
Agreement and has not made an Early Settlement of the Purchase Contracts
underlying its Income PRIDES, such Holder shall be deemed to have elected to pay
for the shares of Common Stock to be issued under such Purchase Contracts from
the Proceeds of the related Pledged Debentures. The Collateral Agent shall, by
10:00 a.m., New York City time, on the fourth Business Day immediately preceding
the Purchase Contract Settlement Date, without any instruction from such Holder
of Income PRIDES, present the related Pledged Debentures to the Remarketing
Agent for remarketing. Upon receiving such Pledged Debentures, the Remarketing
Agent, pursuant to the terms of the Remarketing Agreement and the Supplemental
Remarketing Agreement, will use its reasonable efforts to remarket such Pledged
Debentures on such date at a price of approximately % (but not less than 100%)
of the aggregate Value of such Pledged Debentures, plus accrued and unpaid
interest (including deferred interest), if any, thereon. After deducting as the
Remarketing Fee an amount not exceeding basis points ( %) of the aggregate Value
of the remarketed Pledged Debentures from any amount of such Proceeds in excess
of the aggregate Value, plus such accrued and unpaid interest (including
deferred interest) of the remarketed Pledged Debentures, 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 of such remarketed Pledged Debentures to satisfy in full the
obligations of such Holders of Income PRIDES to pay the Purchase Price to
purchase the Common Stock under the related Purchase Contracts. The remaining
portion of such Proceeds, if any, shall be remitted by the Collateral
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Agent to the Purchase Contract Agent for payment to the Holders. If the
Remarketing Agent advises the Collateral Agent in writing that it cannot
remarket the related Pledged Debentures of such Holders of Income PRIDES at a
price not less than 100% of the aggregate Value of such Pledged Debentures plus
any accrued and unpaid interest (including deferred interest) or if the
remarketing shall not have occurred because a condition precedent to the
remarketing shall not have been fulfilled, 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 Debentures in
accordance with applicable law and satisfy in full, from any such disposition or
retention, such Holder's obligation to pay the Purchase Price for the Common
Stock.
(b) In the event a Holder of Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) has not made an Early Settlement of the Purchase
Contracts underlying its Growth PRIDES or Income PRIDES, or in the event a Tax
Event Redemption has occurred and a Holder of Income PRIDES has not elected to
make an effective Cash Settlement by notifying the Purchase Contract Agent in
the manner provided in paragraph 5.4(d)(i) of the Purchase Contract Agreement,
such Holder shall be deemed to have elected to pay for the shares of Common
Stock to be issued under such Purchase Contracts from the Proceeds of the
related Pledged Treasury Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be. On the Business Day
immediately prior to the Purchase Contract Settlement Date, the Collateral Agent
shall, at the written direction of the Purchase Contract Agent, invest the Cash
proceeds of the maturing Pledged Treasury Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, in
overnight Permitted Investments. Without receiving any instruction from any such
Holder of Growth PRIDES or Income PRIDES (if a Tax Event Redemption has
occurred), the Collateral Agent shall apply the Proceeds of the related Pledged
Treasury Securities or appropriate Applicable Ownership Interest of the Treasury
Portfolio to the settlement of such Purchase Contracts on the Purchase Contract
Settlement Date.
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In the event the sum of the Proceeds from the related Pledged Treasury
Securities or appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, 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
remit 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 Supplemental Remarketing Agreement, on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, but no earlier than
the Payment Date immediately preceding the Purchase Contract Settlement Date,
holders of Separate Debentures may elect to have their Separate Debentures
remarketed by delivering their Separate Debentures, together with a notice of
such election, substantially in the form of Exhibit C hereto, to the Custodial
Agent. The Custodial Agent shall hold such Separate Debentures in an account
separate from the Collateral Account. A holder of Separate Debentures electing
to have its Separate Debentures remarketed will also have the right to withdraw
such election by written notice to the Custodial Agent, substantially in the
form of Exhibit D hereto, on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, upon which notice the Custodial
Agent shall return such Separate Debentures to such holder. On the fourth
Business Day immediately preceding the Purchase Contract Settlement Date, the
Custodial Agent shall notify the Remarketing Agent of the aggregate principal
amount of the separate Debentures to be remarketed and will deliver to the
Remarketing Agent for remarketing all separate Debentures delivered to the
Custodial Agent pursuant to this Section 4.6(c) and not withdrawn pursuant to
the terms hereof prior to such date. The portion of the proceeds from such
remarketing equal to the aggregate Value of such Separate Debentures will
automatically be remitted by the Remarketing Agent to the Custodial Agent for
the benefit of the holders of such Separate Debentures. In addition, after
deducting as the Remarketing Fee an amount not exceeding basis points ( %) of
the Value of the remarketed Separate Debentures, from any amount of such
proceeds in excess of the aggregate Value of the remarketed Separate Debentures
plus any accrued and unpaid interest (including deferred
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interest, if any), the Remarketing Agent will remit to the Custodial Agent the
remaining portion of the proceeds, if any, for the benefit of such holders. If,
despite using its reasonable efforts, the Remarketing Agent advises the
Custodial Agent in writing that it cannot remarket the related Separate
Debentures of such holders at a price not less than 100% of the aggregate Value
of such Separate Debentures plus accrued and unpaid interest (including deferred
interest) or if the remarketing shall not have occurred because a condition
precedent to the remarketing shall not have been fulfilled, and thus resulting
in a Failed Remarketing, the Remarketing Agent will promptly return such
Debentures to the Custodial Agent for redelivery to such holders.
Section 5. Voting Rights -- Debentures. The Purchase Contract Agent
may exercise, or refrain from exercising, any and all voting and other
consensual rights pertaining to the Pledged Debentures or any part thereof for
any purpose not inconsistent with the terms of this Agreement and in accordance
with the terms of the Purchase Contract Agreement; provided, that the Purchase
Contract Agent shall not exercise or, as the case may be, shall not refrain from
exercising such right if, in the judgment of the Company, such action would
impair or otherwise have a material adverse effect on the value of all or any of
the Pledged Debentures; and provided, further, that the Purchase Contract Agent
shall give the Company and the Collateral Agent at least five days' prior
written notice of the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of any notices and
other communications in respect of any Pledged Debentures, including notice of
any meeting at which holders of Debentures are entitled to vote or solicitation
of consents, waivers or proxies of holders of Debentures, the Collateral Agent
shall use reasonable efforts to send promptly to the Purchase Contract Agent
such notice or communication, and as soon as reasonably practicable after
receipt of a written request therefor from the Purchase Contract Agent, execute
and deliver to the Purchase Contract Agent such proxies and other instruments in
respect of such Pledged Debentures (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect to
the Pledged Debentures.
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Section 6. Rights and Remedies; Tax Event Redemption
Section 6.1. Rights and Remedies of the Collateral Agent. (a) In
addition to the rights and remedies specified in Section 4.4 hereof or otherwise
available at law or in equity, after an event of default hereunder, the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
"Code") (whether or not, to the extent permitted by law, the Code is in effect
in the jurisdiction where the rights and remedies are asserted) and the TRADES
Regulations and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted. Wherever reference is made in this Agreement
to any section of the Code, such reference shall be deemed to include a
reference to any provision of the Code which is a successor to, or amendment of,
such section. Without limiting the generality of the foregoing, such remedies
may include, to the extent permitted by applicable law, (i) retention of the
Pledged Debentures or other Collateral in full satisfaction of the Holders
obligations under the Purchase Contracts or (ii) sale of the Pledged Debentures
or other Collateral in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio or on account of principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities, or
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such appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as applicable, and such
obligations of such Holder, any and all of the rights and remedies available to
a secured party under the Code and the TRADES Regulations after default by a
debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the stated liquidated
amount of or, interest payments on, the Pledged Debentures, (ii) the principal
amount of the Pledged Treasury Securities, or (iii) the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, subject, in each case, to the provisions of Section
3, and as otherwise granted herein.
(d) The Purchase Contract Agent, individually and as attorney-in-fact
for each Holder of Securities, in the event such Holder becomes the Holder of 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 or taking any such acts requested by the
Collateral Agent hereunder, except for liability for its own negligent act, its
own negligent failure to act or its own willful misconduct.
Section 6.2. Tax Event Redemption. Upon the occurrence of a Tax Event
Redemption prior to the Purchase Contract Settlement Date, the Redemption Price
payable on the Tax Event Redemption Date with respect to the Applicable
Principal Amount of Debentures shall be delivered to the Collateral Agent by the
Debenture Trustee on or prior to 12:00 p.m., New York City time, by check or
wire transfer in immediately available funds at such place and at such account
as may be designated by the Collateral Agent in exchange for the Pledged
Debentures. In the event the Collateral Agent receives such Redemption
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Price, the Collateral Agent will, at the written direction of the Company, apply
an amount equal to the Redemption Amount of such Redemption Price to purchase
from the Quotation Agent the Treasury Portfolio and promptly remit the remaining
portion of such Redemption Price to the Purchase Contract Agent for payment to
the Holders of Income PRIDES. The Collateral Agent shall Transfer the Treasury
Portfolio to the Collateral Account in the manner specified herein for Pledged
Debentures to secure the obligation of all Holders of Income PRIDES to purchase
Common Stock of the Company under the Purchase Contracts constituting a part of
such Income PRIDES, in substitution for the Pledged Debentures. Thereafter the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Treasury Portfolio as it had in respect of the Pledged Debentures
as provided in Sections 2, 3, 4, 5 and 6, and any reference herein to the
Debentures shall be deemed to be reference to such Treasury Portfolio, and any
reference herein to interest on the Debentures shall be deemed to be a reference
to distributions on such Treasury Portfolio.
Section 6.3. Substitutions. Whenever a Holder has the right to
substitute Treasury Securities, Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, for Collateral
held by the Collateral Agent, such substitution shall not constitute a novation
of the security interest created hereby.
Section 7. Representations and Warranties; Covenants.
Section 7.1. Representations and Warranties. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security interest in
and lien on the Collateral;
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(b) such Holder is the sole beneficial owner of the Collateral
and, in the case of Collateral delivered in physical form,
is the sole holder of such Collateral and is the sole
beneficial owner of, or has the right to Transfer, the
Collateral it Transfers to the Collateral Agent, free and
clear of any security interest, lien, encumbrance, call,
liability to pay money or other restriction other than the
security interest and lien granted under Section 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral
Account, 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 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
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by or on behalf of a Holder), hereby covenant to the Collateral Agent that for
so long as the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will
create or purport to create or allow to subsist any
mortgage, charge, lien, pledge or any other security
interest whatsoever over the Collateral or any part of it
other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will
sell or otherwise dispose (or attempt to dispose) of the
Collateral or any part of it except for the beneficial
interest therein, subject to the pledge hereunder,
transferred in connection with the Transfer of the
Securities.
Section 8. The Collateral Agent. It is hereby agreed as follows:
Section 8.1. Appointment, Powers and Immunities. The Collateral Agent
shall act as Agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. Each of
the Collateral Agent, the Custodial Agent and the Securities Intermediary: (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants or obligations shall be inferred from
this Agreement against any of them, nor shall any of them be bound by the
provisions of any agreement beyond the specific terms hereof; (b) shall not be
responsible for any recitals contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by it under, this
Agreement, the Securities or the Purchase Contract Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement (other than as against the Collateral Agent), the Securities or the
Purchase Contract Agreement 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
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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; (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;
and (f) shall not be responsible for the acts or omissions of any clearing
corporation with whom collateral is deposited. Subject to the foregoing, during
the term of this Agreement, the Collateral Agent shall take all reasonable
action in connection with the safekeeping and preservation of the Collateral
hereunder.
No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the Value of
the Collateral. Notwithstanding the foregoing, the Collateral Agent, the
Custodial Agent, 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
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Agent, the Custodial Agent or the Securities Intermediary, as the case may be,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement and (ii) the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall be adequately
indemnified as provided herein. Nothing in this Section 8.2 shall impair the
right of the Collateral Agent in its discretion to take any action or omit to
take any action which it deems proper and which is not inconsistent with such
direction.
Section 8.3. Reliance. Each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent shall be entitled conclusively to rely
upon any certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be. As to
any matters not expressly provided for by this Agreement, the Collateral Agent,
the Custodial Agent and the Securities Intermediary shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.
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
Securities and any holder of separate Debentures (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
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Agent, any Holder of Securities or any holder of separate Debentures without
having to account for the same to the Company; provided that each of the
Securities Intermediary, the Custodial Agent and the Collateral Agent covenants
and agrees with the Company that it shall not accept, receive or permit there to
be created in favor of itself and shall take no affirmative action to permit
there to be created in favor of any other Person, any security interest, lien or
other encumbrance of any kind in or upon the Collateral and the Collateral shall
be segregated or the books and records of the Collateral Agent and not
commingled with any other assets of any such Person.
Section 8.5. Non-Reliance. None of the Securities Intermediary, the
Custodial Agent or the Collateral Agent shall be required to keep itself
informed as to the performance or observance by the Purchase Contract Agent or
any Holder of Securities of this Agreement, the Purchase Contract Agreement, the
Securities or any other document referred to or provided for herein or therein
or to inspect the properties or books of the Purchase Contract Agent or any
Holder of Securities. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall not have any duty or responsibility to provide the
Company 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 Securities or any holder of separate Debentures (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
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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 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 negligence. The
Collateral Agent or the Custodial Agent may in addition elect to commence an
interpleader action or seek other judicial relief or
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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. Subject to the appointment and acceptance of
a successor Collateral Agent or Custodial Agent as provided below, (a) the
Collateral Agent and the Custodial Agent may resign at any time by giving notice
thereof to the Company and the Purchase Contract Agent as attorney-in-fact for
the Holders of Securities, (b) the Collateral Agent and the Custodial Agent may
be removed at any time by the Company and (c) if the Collateral Agent or the
Custodial Agent fails to perform any of its material obligations hereunder in
any material respect for a period of not less than 20 days after receiving
written notice of such failure by the Purchase Contract Agent and such failure
shall be continuing, the Collateral Agent or the Custodial Agent may be removed
by the Purchase Contract Agent. The Purchase Contract Agent shall promptly
notify the Company of any removal of the Collateral Agent pursuant to clause (c)
of the immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent or
Custodial Agent, as the case may be. If no successor Collateral Agent or
Custodial Agent, as the case may be, shall have been so appointed and shall have
accepted such appointment within 30 days after the retiring Collateral Agent's
or Custodial Agent's giving of notice of resignation or such removal, then the
retiring Collateral Agent or Custodial Agent, as the case may be, may petition
any court of competent jurisdiction for the appointment of a successor
Collateral Agent or Custodial Agent, as the case may be. Each of the Collateral
Agent and the Custodial Agent shall be a bank which has an office in New York,
New York with a combined capital and surplus of at least $75,000,000. Upon the
acceptance of any appointment as Collateral Agent or Custodial Agent, as the
case may 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
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Custodial Agent, as the case may be, shall take all appropriate action to
transfer any money and property held by it hereunder (including the Collateral)
to such successor. The retiring Collateral Agent or Custodial Agent shall, upon
such succession, be discharged from its duties and obligations as Collateral
Agent or Custodial Agent hereunder. After any retiring Collateral Agent's or
Custodial Agent's resignation hereunder as Collateral Agent or Custodial Agent,
the provisions of this Section 8 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Collateral Agent or Custodial Agent. Any resignation or removal of the
Collateral Agent hereunder shall be deemed for all purposes of this Agreement as
the simultaneous resignation or removal of the Custodial Agent and the
Securities Intermediary.
Section 8.9. Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
Section 8.10. Survival. The provisions of this Section 8 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent or the Custodial Agent.
Section 8.11. Exculpation. Anything in this Agreement to the contrary
notwithstanding, in no event shall any of the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, employees or agents be
liable under this Agreement to any third party for indirect, special, punitive,
or consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent, the Custodial Agent or the Securities Intermediary, or any of them,
incurred without any act or deed that is found to be attributable to gross
negligence or willful misconduct on the part of the
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Collateral Agent, the Custodial Agent or the Securities Intermediary.
Section 9. Amendment.
Section 9.1. Amendment Without Consent of Holders. Without the consent
of any Holders or the holders of any Separate Debentures, the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form 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
(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
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and the Securities Intermediary may amend this Agreement for the purpose of
modifying in any manner the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the amount or type of Collateral underlying a Security
(except for the rights of holders of Income PRIDES to substitute the
Treasury Securities for the Pledged Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, or the rights of Holders of Growth PRIDES to substitute
Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as applicable, for the Pledged Treasury
Securities), impair the right of the Holder of any Security to receive
distributions on the underlying Collateral or otherwise adversely
affect the Holder's rights in or to such Collateral; or
(2) otherwise effect any action that would require the consent of
the Holder of each Outstanding Security affected thereby pursuant to
the Purchase Contract Agreement if such action were effected by an
agreement supplemental thereto;
(3) reduce the amount payable or distributable to Holders upon
the remarketing of Debentures; or
(4) 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 8.1 hereof, with respect to the Collateral
Agent, and Section 7.1 of the Purchase Contract Agreement, with respect to the
Purchase Contract Agent) shall be fully protected in relying upon, an
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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. All amendments
must be in writing, signed by all parties to this Agreement.
Section 9.4. Effect of Amendments. Upon the execution of any amendment
under this Section 9, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
Section 9.5. Reference to Amendments. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Section may, and shall if required
by the Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement and without charge or expense
to Holders in exchange for Outstanding Security Certificates.
Section 10. Miscellaneous.
Section 10.1. No Waiver. To the extent permitted by law, 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. To the extent permitted by law, the remedies
herein are
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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, as well as to trial by jury.
Section 10.3. Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, 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.
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Section 10.4. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.
Section 10.5. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 10.6. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be 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
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revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
Section 10.8. Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of
the Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the
obligations of Holders of Securities under the related Purchase
Contracts, or any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the Purchase
Contract Agreement or any Purchase Contract or any other agreement or
instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
THE COASTAL CORPORATION
By:
--------------------------------------
Name:
Title:
Address for Notices:
THE COASTAL CORPORATION
Coastal Tower
Nine Greenway Plaza
Houston, TX 77046-0995
Attention: Chief Financial Officer
Telephone: (000) 000-0000
The Bank of New York,
as Purchase Contract Agent and as
attorney-in-fact of the Holders
from time to time of the Securities
By:
--------------------------------------
Name:
Title:
Address for Notices:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
48
The Chase Manhattan Bank,
as Collateral Agent, Custodial
Agent and as Securities Intermediary
By:
--------------------------------------
Name:
Title:
Address for Notices:
o
o
o
o
Attention: Corporate Trust Administration
Telecopy: o
49
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
THE CHASE MANHATTAN BANK
[ADDRESS]
Attention:
Re: FELINE PRIDES of The Coastal Corporation
(the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of ____________, 1999, (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 of Treasury Securities] [$_______stated
liquidation amount of Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] in exchange for an
equal Value of [Pledged Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be,] to you, as Collateral Agent. We hereby
instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,], and upon the payment by such Holder of any
applicable fees, to release the [Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] [Treasury
Securities] related to such [Income PRIDES] [Growth PRIDES]
50
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:
---------------------
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] for the [Pledged
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities]:
------------------------------ -----------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
------------------------------
Address
------------------------------
------------------------------
51
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Re: FELINE PRIDES of The Coastal Corporation (the
"Company")
The undersigned Holder hereby notifies you that it has delivered to
The Chase Manhattan, as Collateral Agent, [$_______ aggregate principal amount
of Treasury Securities] [$ aggregate stated liquidation amount of Debentures or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, the
case may be,] in exchange for an equal Value of [Pledged Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] [Pledged Treasury Securities] held by the Collateral Agent, in
accordance with Section [4.1][4.2] of the Pledge Agreement, dated ______, 1999
(the "Pledge Agreement"), between you, the Company and the Collateral Agent. The
undersigned Holder has paid the Collateral Agent all applicable fees relating to
such exchange. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio] [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.
Dated:
-------------------- -----------------------------------------
Signature
Signature Guarantee:
---------------------
52
Please print name and address of Registered Holder:
------------------------------ -----------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
------------------------------
Address
------------------------------
------------------------------
53
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
The Chase Manhattan Bank
[ADDRESS]
Attention:
Re: Debentures of The Coastal Corporation (the
"Company")
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of ________, 1999 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and The Bank of New York, 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
Debentures for delivery to the Remarketing Agent on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date for remarketing
pursuant to Section 4.6(c) of the Pledge Agreement. The undersigned will, upon
request of the Remarketing Agent, execute and deliver any additional documents
deemed by the Remarketing Agent or by the Company to be necessary or desirable
to complete the sale, assignment and transfer of the Debentures tendered hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions". The undersigned hereby instructs you, in the event of
Failed Remarketing, upon receipt of the Debentures tendered herewith from the
Remarketing Agent, to 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 Debentures tendered hereby and that the undersigned is the record
owner of any Debentures tendered herewith in physical form or a participant in
The Depositary Trust Company ("DTC") and the beneficial owner of any Debentures
tendered herewith by book-entry transfer to your account at DTC and (ii) agrees
to be bound by the terms and conditions of Section 4.6(c) of the Pledge
Agreement. Capitalized terms
54
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
------------------------------
Address
------------------------------
------------------------------
--------------------------------------------------------------------------------
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, Debentures 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, Debentures which are in book-entry form
should be credited to the account at The Depositary Trust Company set forth
below.
-------------------
DTC Account Number
Name of Account Party:
-----------------
--------------------------------------------------------------------------------
55
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Chase Manhattan Bank
[ADDRESS]
Attention:
Re: Debentures of The Coastal Corporation (the
"Company"), and KBHC Financing I
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of ________, 1999 (the "Pledge Agreement")
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and The Bank of New York, 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 Debentures delivered to the Custodial Agent on ________,
2002 for remarketing pursuant to Section 4.6(c) of the Pledge Agreement. The
undersigned hereby instructs you to return such Debentures to the undersigned in
accordance with the undersigned's instructions. With this notice, the
Undersigned hereby agrees to be bound by the terms and conditions of Section
4.6(c) of the Pledge Agreement. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date:
-------------------- -----------------------------------------
By:
--------------------------------------
Name:
Title:
Signature Guarantee:
---------------------
56
Please print name and address:
------------------------------ -----------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
------------------------------
Address
------------------------------
------------------------------
--------------------------------------------------------------------------------
A. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Debentures 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, Debentures which are in book-entry form
should be credited to the account at The Depositary Trust Company set forth
below.
-------------------
DTC Account Number
Name of Account Party:
---------------
--------------------------------------------------------------------------------
