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EXHIBIT 99(c)
SEMCO Energy, Inc.
The Bank of New York
as Collateral Agent, Custodial Agent
and Securities Intermediary
AND
Bank One Trust Company, National Association
as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of June 16, 2000
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Table of Contents
ARTICLE 1
Definitions
Section 1.1 Definitions................................................................................2
ARTICLE II Pledge; Control and
Perfection
Section 2.1 The Pledge ................................................................................6
Section 2.2 Control and Perfection ....................................................................7
ARTICLE III Distributions on
Pledged Collateral.
ARTICLE IV
Substitution, Release, Repledge and Settlement of Trust Preferred Securities.
Section 4.1 Substitution for Trust Preferred Securities and the Creation of
Growth PRIDES .............................................................................10
Section 4.2 Substitution of Treasury Securities and the Creation of
Income PRIDES .............................................................................11
Section 4.3 Termination Event .........................................................................11
Section 4.4 Cash Settlement ...........................................................................12
Section 4.5 Early Settlement ..........................................................................13
Section 4.6 Application of Proceeds Settlement ........................................................14
ARTICLE V
Voting Rights - Trust Preferred Securities
ARTICLE VI
Rights and Remedies; Distribution of the Senior Deferrable Notes; Tax Event Redemption
Section 6.1 Rights and Remedies of the Collateral Agents ..............................................16
Section 6.2 Distribution of the Senior Deferrable Notes; Investment Company
Event; Tax Event Redemption ...............................................................17
Section 6.3 Substitutions .............................................................................18
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ARTICLE VII Representations
and Warranties; Covenants.
Section 7.1 Representations and Warranties ............................................................18
Section 7.2 Covenants .................................................................................19
ARTICLE VIII
The Collateral Agent.
Section 8.1 Appointment, Powers and Immunities ........................................................19
Section 8.2 Instructions of the Company ...............................................................20
Section 8.3 Reliance by Collateral Agent ..............................................................20
Section 8.4 Rights in Other Capacities ................................................................21
Section 8.5 Non-Reliance on Collateral Agent ..........................................................21
Section 8.6 Compensation and Indemnity ................................................................21
Section 8.7 Failure to Act ............................................................................22
Section 8.8 Resignation of Collateral Agent ...........................................................22
Section 8.9 Right to Appoint Agent or Advisor .........................................................23
Section 8.10 Survival ..................................................................................23
Section 8.11 Exculpation ...............................................................................23
ARTICLE IX
Amendment
Section 9.1 Amendment Without Consent of Holders ......................................................24
Section 9.2 Amendment with Consent of Holders .........................................................24
Section 9.3 Execution of Amendment ....................................................................25
Section 9.4 Effect of Amendments ......................................................................25
Section 9.5 Reference to Amendment ....................................................................25
ARTICLE X
Miscellaneous.
Section 10.1 No Waiver .................................................................................25
Section 10.2 Governing Law .............................................................................26
Section 10.3 Notices ...................................................................................26
Section 10.4 Successors and Assigns ....................................................................26
Section 10.5 Counterparts ..............................................................................26
Section 10.6 Severability ..............................................................................26
Section 10.7 Expenses, Etc .............................................................................27
Section 10.8 Security Interest Absolute ................................................................27
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EXHIBIT A
Instruction to Collateral Agent .............................................................................A-1
EXHIBIT B
Instruction to Purchase Contract Agent ......................................................................B-1
EXHIBIT C
Instruction to Custodial Agent Regarding Remarketing ........................................................C-1
EXHIBIT D
Instruction to Custodial Agent Regarding Withdrawal from
Remarketing ...........................................................................................D-1
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of June 16, 2000 (this "Agreement"), among
SEMCO Energy, Inc., a Michigan corporation (the "Company"), The Bank of New
York, a New York banking corporation, not individually but solely as Collateral
Agent (in such capacity, together with its successors in such capacity, the
"Collateral Agent"), as custodial agent (in such capacity, together with its
successors in such capacity, the "Custodial Agent") and as securities
intermediary" as defined in Section 8-102(a)(14) of the Code (as defined herein)
(in such capacity, together with its successors in such capacity, the
"Securities Intermediary"), and Bank One Trust Company, National Association,
not individually but solely as purchase contract agent and as attorney-in-fact
of the Holders (as defined in the Purchase Contract Agreement) from time to time
of the Securities (as hereinafter defined) (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under the Purchase
Contract Agreement (as herein after defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement, dated as of the date hereof (as modified and supplemented
and in effect from time to time, the "Purchase Contract Agreement"), pursuant to
which there may be issued up to 9,000,000 FELINE PRIDES of the Company and an
additional 1,350,000 FELINE PRIDES if the Underwriters' over-allotment option
pursuant to the Underwriting Agreement and Pricing Agreement is exercised in
full having a stated amount of $10 (the "Stated Amount") per FELINE PRIDES. The
FELINE PRIDES will initially consist of an Income PRIDES unit that will
initially be comprised of (a) a stock purchase contract (the "Purchase
Contract") under which (i) the holder will purchase from the Company not later
than August 16, 2003 (the "Purchase Contract Settlement Date"), for an amount of
cash equal to the Stated Amount, a number of shares of the common stock, $1.00
par value per share (the "Common Stock"), of the Company equal to the Settlement
Rate (as defined below), and (ii) the Company will pay to the Holder, on a
quarterly basis, adjustment payments ("Contract Adjustment Payments") at the
rate of 9% of the stated amount per annum, and (b) a beneficial ownership of a
Trust Preferred Security (as defined below) unless a Tax Event Redemption has
occurred, in which case, the Trust Preferred Security shall be replaced by the
Applicable Ownership Percentage of the Treasury Portfolio (as defined below). At
any time after the issuance of the Income PRIDES, a holder may substitute for
the related Trust Preferred Securities, or the appropriate Applicable Ownership
Interest in the Treasury Portfolio in the event of a Tax Event Redemption,
zero-coupon U.S. Treasury Securities maturing on August 15, 2003 in total
principal amount at maturity equal to the aggregate principal amount of such
Trust Preferred Securities or the amount of such Applicable Ownership Interest
in the Treasury Portfolio, as the case may be. Each Growth PRIDES created will
initially be comprised of (a) a Purchase Contract under which (i) the holder
will purchase from the Company not later than the Purchase Contract Settlement
Date, for an amount in cash equal to the Stated Amount, a number of shares of
Common Stock of the Company equal to the Settlement Rate, and (ii) the Company
will pay Contract Adjustment Payments to the Holder at the rate of 2% of the
Stated Amount per annum, and (b) a 1.0% undivided beneficial interest in a
zero-coupon U.S. Treasury Security having a principal amount at maturity equal
to $1,000 and maturing on August 15, 2003 (the "Treasury Securities").
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Pursuant to the terms of the Declaration (as defined below), SEMCO
Capital Trust II, a statutory business trust formed under the laws of the State
of Delaware (the "Trust"), will issue 9,000,000, 10,350,000 if the Underwriters'
over-allotment option pursuant to the Underwriting Agreement and Pricing
Agreement is exercised in full, 9% Trust Preferred Securities, (the "Trust
Preferred Securities") having a stated liquidation value equal to the Stated
Amount.
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 Trust Preferred
Securities, any Applicable Ownership Interest in the Treasury Portfolio and any
Treasury Securities delivered in exchange therefor to secure each Holder's
obligations under the related Purchase Contract, as provided herein and subject
to the terms hereof. Upon such pledge, the Trust Preferred Securities, any
Applicable Ownership Interest in the Treasury Portfolio and the Treasury
Securities will be beneficially owned by the Holders but will be owned of record
by the Purchase Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own
behalf and as attorney-in-fact of the Holders from time to time of the
Securities, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in the
Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board Resolution, (iv)
Cash Settlement, (v) Certificate, (vi) Contract Adjustment Payments, (vii)
Senior Deferrable Notes, (viii) Early Settlement, (ix) Early Settlement Amount,
(x) Early Settlement Date, (xi) Failed Remarketing, (xii) Holder, (xiii) Opinion
of Counsel, (xiv) Outstanding Securities, (xv) Remarketing Agent, (xvi)
Remarketing Agreement, (xvii) Settlement Rate, and (xviii) Termination Event;
and
(d) the following terms have the meanings assigned to them in the
Declaration: (i) Applicable Principal Amount, (ii) Indenture, (iii) Investment
Company Event, (iv) Primary Treasury Dealer, (v) Property Trustee, (vi)
Quotation Agent, (vii) Redemption Amount, (viii) Redemption Price, (ix) Tax
Event, (x) Tax Event Redemption, (xi) Tax Event Redemption Date, (xii) Treasury
Portfolio, and (xiii) Treasury Portfolio Purchase Price.
"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 U.S. Treasury Securities in the Treasury Portfolio, (A) a 1/100, or 1%,
undivided beneficial ownership
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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 August 15, 2003 and (B) for each scheduled interest
payment date on the Senior Deferrable Notes that occurs after the Tax Event
Redemption Date, a .0225% 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.
"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
bankruptcy laws.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions and trust companies in The City 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 ) maintained
at The Bank of New York in the name Bank One Trust Company, National
Association, as Purchase Contract Agent on behalf of the holders of certain
securities of SEMCO Capital Trust II, Collateral Account subject to the security
interest of The Bank of New York, as Collateral Agent, for the benefit of SEMCO
Energy, Inc., as pledgee and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this Agreement.
"Common Stock" has the meaning specified in the Recitals.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Custodial Agent" has the meaning specified in the Recitals.
"Declaration" means the Amended and Restated Declaration of Trust as of
June 16, 2000 among the Company as sponsor, the trustees named herein and the
holders from time to time of undivided beneficial interests in the assets of the
Trust.
"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
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obligation of it); (ii) deposits, certificates of deposit or acceptances with an
original maturity of 365 days or less of any institution which is a member of
the Federal Reserve System having combined capital and surplus and undivided
profits of not less than US $200,000,000 at the time of deposit; (iii)
investments with an original maturity of 365 days or less of any person that is
fully and unconditionally guaranteed by a bank referred to in clause (ii); (iv)
investments in commercial paper, other than commercial paper .issued by the
Company or its affiliates, of any corporation incorporated under the laws of the
United States or any State thereof, which commercial paper has a rating at the
time of purchase at least equal to "A-1 by Standard & Poor's Ratings Services
("S&P") or at least equal to "P-1 by Xxxxx'x Investors Service, Inc.
("Moody's"); and (v) investments in money market funds registered under the
Investment Company Act of 1940, as amended, and rated in the highest applicable
rating category by S&P or Moody's.
"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 Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Pledged Trust Preferred Securities" has the meaning specified in
Section 2.1 hereof.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Sections 8-102(a)(9) of the Code)
and other property from time to time received, receivable or otherwise
distributed upon the sale, exchange, collection or disposition of the Collateral
or any proceeds thereof.
"Purchase Contract" has the meaning specified in the Recitals.
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the
Recitals.
"Purchase Contract Settlement Date" has the meaning specified in the
Recitals.
"Remarketing Underwriting Agreement" means the Remarketing Underwriting
Agreement attached as Exhibit A to the Remarketing Agreement.
"Securities" means the Income PRIDES and the Growth PRIDES.
"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.
"Senior Deferrable Note Trustee" means Bank One Trust Company, National
Association, as Trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
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"Separate Trust Preferred Securities" means any Trust Preferred
Securities that are not Pledged Trust Preferred Securities.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance with
the instructions of the Collateral Agent, the Purchase Contract Agent or the
Holder, as applicable:
(i) 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 Section 8-102 (a) (14) of the Code) to (i) credit a
"security entitlement" (as defined in Section 8-102(a)(17) of the Code)
with respect to such securities to a "securities account" (as defined
in Section 8-501(a) of the Code) maintained by or on behalf of the
recipient and (ii) to issue a confirmation to the recipient with
respect to such credit. In the case of Collateral to be delivered to
the Collateral Agent, the Securities Intermediary shall be the
Securities Intermediary and the securities account shall be the
Collateral Account.
"Treasury Security" has the meaning specified in the Recitals.
"Trust" has the meaning specified in the Recitals.
"Trust Preferred Securities" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means, as to
(i) a Trust Preferred Security, the Stated Amount, (ii) Cash, the face amount
thereof and (iii) Treasury Securities, the aggregate principal amount thereof at
maturity.
ARTICLE II
PLEDGE; CONTROL AND PERFECTION.
Section 2.1 The Pledge. The Holders from time to time acting through the
Purchase Contract Agent, as their attorney-in-fact, and the Purchase Contract
Agent, as such attorney-in-fact, hereby pledge and grant to the Collateral
Agent, for the benefit of the Company, as collateral security for the
performance when due by such Holders of their respective obligations under the
related Purchase Contracts, a security interest in all of the right, title and
interest of the Purchase Contract Agent and such Holders (a) in the Trust
Preferred Securities and Treasury Securities constituting a part of the
Securities and any Treasury Securities
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delivered in exchange for any Trust Preferred Securities, and any Trust
Preferred Securities delivered in exchange for any Treasury Securities, in
accordance with Section 4.2 hereof, in each case that have been transferred to
or received by the Collateral Agent and not released by the Collateral Agent to
such Holders under the provisions of this Agreement; (b) in payments made by
Holders pursuant to Section 4.4; (c) in the Collateral Account and all
securities, financial assets, Cash and other property credited thereto and all
Security Entitlements related thereto; (d) in any Senior Deferrable Notes
delivered to the Collateral Agent upon the occurrence of an Investment Company
Event or a liquidation of the Trust as provided in Section 6.2; (e) 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 (f) all Proceeds of the foregoing (all of the foregoing,
collectively, the "Collateral"). Prior to or concurrently with the execution and
delivery of this Agreement, the Purchase Contract Agent, on behalf of the
initial Holders of the Income PRIDES, shall cause the Trust Preferred Securities
comprising a part of the Income PRIDES to be Transferred to the Collateral Agent
for the benefit of the Company. Such Trust Preferred Securities shall be
Transferred by physically delivering such securities to the Securities
Intermediary endorsed in blank and causing the Securities Intermediary to credit
the Collateral Account with such securities and sending the Collateral Agent a
confirmation of the deposit of such securities. In the event a Holder of Income
PRIDES so elects, such Holder may Transfer Treasury Securities to the Collateral
Agent for the benefit of the Company in exchange for the release by the
Collateral Agent on behalf of the Company of Trust Preferred Securities 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 Trust
Preferred Securities, 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
transferred, in the event that a Tax Event Redemption has occurred, to the
Purchase Contract Agent on behalf of such Holder. Treasury Securities and the
Treasury Portfolio, as applicable, shall be Transferred to the Collateral
Account maintained by the Collateral Agent at the Securities Intermediary by
book entry transfer to the Collateral Account in accordance with the TRADES
Regulations and other applicable law and by the notation by the Securities
Intermediary on its books that a Security Entitlement with respect to such
Treasury Securities or Treasury Portfolio, has been credited to the Collateral
Account. For purposes of perfecting the Pledge under applicable law, including,
to the extent applicable, the TRADES Regulations or the Uniform Commercial Code
as adopted and in effect in any applicable jurisdiction, the Collateral Agent
shall be the agent of the Company as provided herein. The pledge provided in
this Section 2.1 is herein referred to as the "Pledge" and the Trust Preferred
Securities (or the Senior Deferrable Notes that are delivered pursuant to
Section 6.2 hereof) or Treasury Securities subject to the Pledge, excluding any
Trust Preferred Securities or the Senior Deferrable Notes that are delivered
pursuant to Section 6.2 hereof) or Treasury Securities released from the Pledge
as provided in Sections 4.1 and 4.2 hereof, respectively, are hereinafter
referred to as "Pledged Trust Preferred Securities" 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
Trust Preferred Securities or any other securities held in physical form in its
name.
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Except as may be required in order to release Trust Preferred
Securities in connection with a Holder's election to convert its investment from
an Income PRIDES to a Growth PRIDES, or except as otherwise required to release
securities as specified herein, neither the Collateral Agent nor the Securities
Intermediary shall relinquish physical possession of any certificate evidencing
a Trust Preferred Security 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 Trust Preferred Securities
evidenced hereby from the Pledge, the Securities Intermediary shall use its best
efforts to obtain physical possession of a replacement certificate evidencing
any Trust Preferred Securities remaining subject to the Pledge hereunder
registered to it or endorsed in blank within fifteen days of the date it
relinquished possession. The Securities Intermediary shall promptly notify the
Company and the Collateral Agent of the Securities Intermediary's failure to
obtain possession of any such replacement certificate as required hereby.
Section 2.2 Control and Perfection. (a) In connection with the Pledge
granted in Section 2.1, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, 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 Trust
Preferred Securities, the Treasury Securities, the Treasury Portfolio, and any
Security Entitlements with respect thereto and to pay and deliver any income,
proceeds or other funds derived therefrom to the Company. The 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, endorsed to the Securities Intermediary or in blank or credited to
another Collateral Account maintained in the name of the Securities Intermediary
and in no case will any financial asset credited to the Collateral Account be
registered in the name of the Purchase Contract Agent, the Collateral Agent, the
Company or any Holder, payable to the order of, or specially endorsed to, the
Purchase Contract Agent, the Collateral Agent, the Company or any Holder except
to the extent the foregoing have been specially endorsed to the Securities
Intermediary or in blank; (ii) all property delivered to the Securities
Intermediary pursuant to this Pledge Agreement (including, without limitation,
any Trust Preferred Securities, the Treasury Portfolio or Treasury Securities)
will be promptly credited to the Collateral Account; (iii) the Collateral
Account is an account to which financial assets are or may be credited, and the
Securities Intermediary shall, subject to the terms of this Agreement, treat the
Purchase Contract Agent as entitled to exercise the rights of any financial
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asset credited to the Collateral Account; (iv) the Securities Intermediary has
not entered into, and until the termination of this Agreement will not enter
into, any agreement with any other person relating to the Collateral Account
and/or any financial assets credited thereto pursuant to which it has agreed to
comply with entitlement orders (as defined in Section 8-102(a)(8) of the Code)
of such other person; and (v) the Securities Intermediary has not entered into,
and until the termination of this Agreement will not enter into, any agreement
with the Company, the Collateral Agent or the Purchase Contract Agent purporting
to limit or condition the obligation of the Securities Intermediary to comply
with entitlement orders as set forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item of
property whether investment property, financial asset, security, instrument or
cash credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or any
portion thereof) and any other agreement now existing or hereafter entered into,
the terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorney-in-fact to take on behalf of, and in
the name, place and stead of the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such
power-of-attorney shall not be deemed to require of the Collateral Agent any
specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder.
(f) At least annually after the execution and delivery of this
Pledge Agreement, an opinion of counsel (who may be of counsel for the Company)
either stating that in the opinion of such counsel such action has been taken
with respect to the recording, filing, re-recording, and refiling of the
security interest as is necessary to maintain the perfected security interest in
the Collateral referred to in Section 2.1, and reciting the details of such
action, or stating that in the opinion of such counsel no such action is
necessary to maintain such perfected security interest.
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ARTICLE III
DISTRIBUTIONS ON PLEDGED COLLATERAL.
So long as the Purchase Contract Agent is the registered owner of the
Pledged Trust Preferred Securities, it shall receive all payments thereon. If
the Pledged Trust Preferred Securities are reregistered, such that the
Collateral Agent becomes the registered holder, all 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, or cash distributions on, the Pledged Trust Preferred Securities 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) cash distributions with respect to the
Pledged Trust Preferred Securities 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
Trust Preferred Securities 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 4.3 hereof, to the
Purchase Contract Agent, for the benefit of the relevant Holders of
Securities, to the account designated by the Purchase Contract Agent
for such purpose, no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral Agent (provided
that in the event such payment is received by the Collateral Agent on a
day that is not a Business Day or after 12:30 p.m., New York City time,
on a Business Day, then such payment shall be made no later than 10:30
a.m., New York City time, on the next succeeding Business Day);
(ii) In the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Holders of the Growth PRIDES to the accounts
designated by them in writing for such purpose no later than 2:00 p.m.,
New York City time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment is received
by the Collateral Agent on a day that is not a Business Day or after
12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day); and
(iii) In the case of payments of the Stated Amount of any
Pledged Trust Preferred Securities 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
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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 Trust Preferred Security or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as applicable, that, at the time
of such payment, is a Pledged Trust Preferred Security or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, or
a Holder of a Growth PRIDES shall receive any payments of principal on account
of any Treasury Securities that, at the time of such payment, are Pledged
Treasury Securities, the Purchase Contract Agent or such Holder shall hold the
same as trustee of an express trust for the benefit of the Company (and promptly
deliver the same over to the Company) for application to the obligations of the
Holders under the related Purchase Contracts, and the Holders shall acquire no
right, title or interest in any such payments of Stated Amount or principal so
received.
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF TRUST PREFERRED SECURITIES.
Section 4.1 Substitution for Trust Preferred Securities and the
Creation of Growth PRIDES. At any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date (unless a Tax Event
Redemption has occurred), a Holder of Income PRIDES shall have the right to
substitute Treasury Securities for the Pledged Trust Preferred Securities
securing such Holder's obligations under the Purchase Contract(s) comprising a
part of its Income PRIDES in integral multiples of 100 Income PRIDES by (a)
transferring to the Collateral Agent Treasury Securities having a value equal to
the aggregate Stated Amount of the Pledged Trust Preferred Securities to be
released and (b)(ii) delivering the related Income PRIDES to the Purchase
Contract Agent, accompanied by a notice, substantially in the form of Exhibit B
hereto, to the Purchase Contract Agent stating that such Holder has Transferred
Treasury Securities to the Collateral Agent pursuant to clause (a) above
(stating the value of the Treasury Securities Transferred by such Holder) and
requesting that the Purchase Contract Agent instruct the Collateral Agent to
release from the Pledge the Pledged Trust Preferred Securities 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 his 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 40,000 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 Trust Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, and shall promptly
Transfer such Pledged Trust Preferred Securities 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 Recreation of
Income PRIDES. At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (unless a Tax Event Redemption
has occurred), a Holder of Growth PRIDES shall have the right to reestablish
Income PRIDES consisting of the Purchase Contracts and Trust Preferred
Securities in integral multiples of 100 Income PRIDES by (a) Transferring to the
Collateral Agent Trust Preferred Securities having a Value equal to the Value of
the Pledged
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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 transferred Trust Preferred Securities to the Collateral Agent
pursuant to clause (a) above and requesting that the Purchase Contract Agent
instruct the Collateral Agent to release from the Pledge the Pledged Treasury
Securities related to such 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 40,000 Growth PRIDES, at any
time on or prior to the Business Day immediately preceding the Purchase Contract
Settlement Date. Upon receipt of the Trust Preferred Securities 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 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 Trust Preferred
Securities (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 Trust
Preferred Securities, 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 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 Trust
Preferred Securities, 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 Trust Preferred
Securities, the Treasury Portfolio or of the Pledged Treasury Securities, as the
case may be, as provided by this Section 4.3 or (ii) commence an action or
proceeding like that described in subsection (i)(z) hereof within ten days after
the occurrence of such Termination Event.
Section 4.4 Cash Settlement. (a) Upon receipt by the Collateral Agent
of (i) a notice from the Purchase Contract Agent promptly after the receipt by
the Purchase Contract Agent of such notice that a Holder of an Income PRIDES or
Growth PRIDES has elected, in accordance with the procedures specified in
Section 5.4 (a) (i) or (d) (i) of the Purchase Contract Agreement,
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respectively, to settle its Purchase Contract with Cash and (ii) payment of the
amount required to settle such contract by such Holder on or prior to 11:00
a.m., New York City time, on the Business Day immediately preceding the Purchase
Contract Settlement Date in lawful money of the United States by certified or
cashiers check or wire transfer in immediately available funds payable to or
upon the order of the Company, then the Collateral Agent shall promptly invest
any Cash received from a Holder in connection with a Cash Settlement in
Permitted Investments. Upon receipt of the proceeds upon the maturity of the
Permitted Investments on the Purchase Contract Settlement Date, the Collateral
Agent shall pay the portion of such proceeds and deliver any certified or
cashiers checks received and any funds so wired, in an aggregate amount equal to
the Purchase Price, to the Company on the Purchase Contract Settlement Date, and
shall distribute any funds in respect of the interest earned from the Permitted
Investments to the Purchase Contract Agent for payment to the relevant Holders.
(b) If a Holder of an Income PRIDES fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
Section 5.4 (a) (i) of the Purchase Contract Agreement, such failure shall
constitute an event of default under the Purchase Contract Agreement and
hereunder, and the Holder shall be deemed to have consented to the disposition
of the Pledged Trust Preferred Securities pursuant to the remarketing as
described in Section 5.4(b) of the Purchase Contract Agreement, which is
incorporated herein by reference. If a Holder of an Income PRIDES does notify
the Purchase Contract Agent as provided in Section 5.4 (a) (i) of the Purchase
Contract Agreement of its intention to pay the Purchase Price in cash, but fails
to make such payment as required by Section 5.4(a)(ii) of the Purchase Contract
Agreement, such failure will constitute an event of default under the Purchase
Contract Agreement and hereunder, and the Trust Preferred Securities of such a
Holder will not be remarketed but instead the Collateral Agent, for the benefit
of the Company, will exercise its rights as a secured party with respect to such
Trust Preferred Securities at the direction of the Company to retain or dispose
of the Collateral in accordance with applicable law. In addition, in the event
of a Failed Remarketing as described in Section 5.4(b) of the Purchase Contract
Agreement, such Failed Remarketing shall constitute an event of default
hereunder by such Holder and the Collateral Agent, for the benefit of the
Company, will also exercise its rights as a secured party with respect to such
Trust Preferred Securities at the direction of the Company to retain or dispose
of the Collateral in accordance with applicable law.
(c) If a Holder of a Growth PRIDES fails to notify the Purchase
Contract Agent of such Holder's intention to make a Cash Settlement in
accordance with Section 5.4(d)(i) of the Purchase Contract Agreement, or if a
Holder of a Growth PRIDES does notify the Purchase Contract Agent as provided in
paragraph 5.4(d)(i) of the Purchase Contract Agreement of its intention to pay
the Purchase Price in cash, but fails to make such payment as required by
Section 5.4(d)(ii) of the Purchase Contract Agreement, such failure shall
constitute an event of default hereunder by such Holder and upon the maturity of
any Pledged Treasury Securities or the Treasury Portfolio, if any, held by the
Collateral Agent on the Business Day immediately preceding the Purchase Contract
Settlement Date, the principal amount of the Pledged Treasury Securities or the
Treasury Portfolio received by the Collateral Agent shall, upon written
direction of the Company, be invested promptly in Permitted Investments. On the
Purchase Contract Settlement Date, an amount equal to the Purchase Price will be
remitted to the Company as payment thereof. In the event the sum of the proceeds
from the related Pledged Treasury Securities or the Treasury Portfolio, as the
case may be, and the investment earnings earned from such investments is in
excess of the Aggregate Purchase Price of the Purchase Contracts being settled
thereby, the Collateral Agent will distribute such excess to the Purchase
Contract Agent for the benefit of the Holder of the related Growth PRIDES or
Income PRIDES when received.
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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 Trust Preferred Securities 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, with a principal amount equal to
the product of (i) the Stated Amount times (ii) the number of such Purchase
Contracts as to which such Holders have elected to effect Early Settlement and
shall Transfer all such Pledged Trust Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio or Pledged Treasury
Securities, as the case may be, free and clear of the Pledge created hereby, to
the Purchase Contract Agent for the benefit of the Holders.
Section 4.6 Application of Proceeds Settlement. (a) In the event a
Holder of 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 or has not made an Early Settlement of the Purchase Contract(s)
underlying its Income PRIDES, such Holder shall be deemed to have elected to pay
for the shares of Common Stock to be issued under such Purchase Contract(s) from
the Proceeds of the related Pledged Trust Preferred Securities. The Collateral
Agent shall, by 10:00 a.m., New York City time, on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date, without any
instruction from such Holder of Income PRIDES, present the related Pledged Trust
Preferred Securities to the Remarketing Agent for remarketing. Upon receiving
such Pledged Trust Preferred Securities, the Remarketing Agent, pursuant to the
terms of the Remarketing Agreement and the Remarketing Underwriting Agreement,
will use its reasonable efforts to remarket such Pledged Trust Preferred
Securities on such date at a price not less than approximately 100.5% of the
aggregate Value of such Pledged Trust Preferred Securities, plus accumulated and
unpaid distributions, if any, thereon. After deducting as the remarketing fee an
amount not exceeding 25 basis points (.25%) of the aggregate Value of the
Pledged Trust Preferred Securities from any amount of such proceeds in excess of
the aggregate Value, plus such accumulated and unpaid distributions of the
remarketed Pledged Trust Preferred Securities, the Remarketing Agent will remit
the entire amount of the Proceeds of such remarketing to the Collateral Agent.
On the Purchase Contract Settlement Date, the Collateral Agent shall apply that
portion of the Proceeds from such remarketing equal to the Aggregate Value, plus
such accumulated and unpaid distributions of such Pledged Trust Preferred
Securities, 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
distributed by the Collateral Agent to the Purchase Contract Agent for payment
to the Holders. If the Remarketing Agent advises the Collateral Agent in writing
that it cannot remarket the related Pledged Trust Preferred Securities of such
Holders of Income PRIDES at a price not less than 100% of the aggregate Value of
such pledged Trust Preferred Securities plus any accumulated and unpaid
distributions (including deferred distributions) or if the remarketing shall not
have occurred because a condition
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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 Trust
Preferred Securities in accordance with applicable law and satisfy in full, from
any such disposition or retention, such Holder's obligation to pay the Purchase
Price for the Common Stock.
(b) In the event a Holder of Growth PRIDES or Income PRIDES (if a
Tax Event redemption has occurred) has not made an Early Settlement of the
Purchase Contract(s) underlying its Growth PRIDES or Income PRIDES, such Holder
shall be deemed to have elected to pay for the shares of Common Stock to be
issued under such Purchase Contract(s) from the Proceeds of the related Pledged
Treasury Securities or the Treasury Portfolio, as the case may be. on the
Business Day immediately prior to the Purchase Contract Settlement Date. The
Collateral Agent shall, at the written direction of the Purchase Contract Agent,
invest the Cash proceeds of the maturing Pledged Treasury Securities or the
Treasury Portfolio, as the case may be, in overnight Permitted Investments.
Without receiving any instruction from any such Holder of Growth PRIDES or
Income PRIDES, the Collateral Agent shall apply the Proceeds of the related
Pledged Treasury Securities or Treasury Portfolio to the settlement of such
Purchase Contracts on the Purchase Contract Settlement Date.
(c) In the event the sum of the Proceeds from the related Pledged
Treasury Securities or Treasury Portfolio and the investment earnings from the
investment in overnight Permitted Investments is in excess of the aggregate
Purchase Price of the Purchase Contracts being settled thereby, the Collateral
Agent shall distribute such excess, when received, to the Purchase Contract
Agent for the benefit of the Holders. Pursuant to the Remarketing Agreement and
subject to the terms of the Remarketing Underwriting Agreement, on or prior to
the fifth Business Day immediately preceding the Purchase Contract Settlement
Date, but no earlier than the Payment Date immediately preceding the Purchase
Contract Settlement Date, holders of Separate Trust Preferred Securities may
elect to have their Separate Trust Preferred Securities remarketed by delivering
their Separate Trust Preferred Securities, together with a notice of such
election, substantially in the form of Exhibit C hereto, to the Custodial Agent.
The Custodial Agent will hold such Separate Trust Preferred Securities in an
account separate from the Collateral Account. A holder of Separate Trust
Preferred Securities electing to have its Separate Trust Preferred Securities
remarketed will also have the right to withdraw such election by written notice
to the Custodial Agent, substantially in the form of Exhibit D hereto, on or
prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, upon which notice the Custodial Agent will return such Separate
Trust Preferred Securities to such holder. On the fourth Business Day
immediately preceding the Purchase Contract Settlement Date, the Custodial Agent
will deliver to the Remarketing Agent for remarketing all Separate Trust
Preferred Securities delivered to the Custodial Agent pursuant to this Section
4.6(c) and not withdrawn pursuant to the terms hereof prior to such date. The
portion of the proceeds from such remarketing equal to the aggregate Value of
such Separate Trust Preferred Securities will automatically be remitted by the
Remarketing Agent to the Custodial Agent for the benefit of the holders of such
Separate Trust Preferred Securities. In addition, after deducting as the
remarketing fee an amount not proceeding 25 basis points (.25%) of the Value of
the remarketed Separate Trust Preferred Securities, from any amount of such
proceeds in excess of the aggregate Value of the remarketed Separate Trust
Preferred Securities plus any accrued and unpaid distributions (including
deferred distributions, if any), the Remarketing Agent will remit to the
Custodial Agent the remaining portion of the proceeds, if any, for the benefit
of such holders. If, despite using its reasonable efforts, the Remarketing Agent
advises the Custodial Agent in
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writing that it cannot remarket the related Separate Trust Preferred Securities
of such holders at a price not less than 110% of the aggregate Value of such
Separate Trust Preferred Securities plus accrued and unpaid distributions
(including deferred distributions) 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 Trust Preferred Securities to the Custodial Agent for redelivery to
such holders. In the event of a dissolution of the Trust and the distribution of
the Senior Deferrable Notes as described in the Declaration, all references to
"Separate Trust Preferred Securities" in this Section 4.6(c) shall be deemed to
be references to Senior Deferrable Notes which are not pledged hereunder or
required to be part of the Collateral.
ARTICLE V
VOTING RIGHTS -- TRUST PREFERRED SECURITIES.
The Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the Pledged Trust
Preferred Securities or any part thereof for any purpose not inconsistent with
the terms of this Agreement and in accordance with the terms of the Purchase
Contract Agreement; provided, that the Purchase Contract Agent shall not
exercise or, as the case may be, shall not refrain from exercising such right
if, in the judgment of the Company, such action would impair or otherwise have a
material adverse effect on the value of all or any of the Pledged Trust
Preferred Securities; and provided, further, that the Purchase Contract Agent
shall give the Company and the Collateral Agent at least five days' prior
written notice of the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of any notices and
other communications in respect of any Pledged Trust Preferred Securities,
including notice of any meeting at which holders of Trust Preferred Securities
are entitled to vote or solicitation of consents, waivers or proxies of holders
of Trust Preferred Securities, the Collateral Agent shall use reasonable efforts
to send promptly to the Purchase Contract Agent such notice or communication,
and as soon as reasonably practicable after receipt of a written request
therefor from the Purchase Contract Agent, execute and deliver to the Purchase
Contract Agent such proxies and other instruments in respect of such Pledged
Trust Preferred Securities (in form and substance satisfactory to the Collateral
Agent) as are prepared by the Purchase Contract Agent with respect to the
Pledged Trust Preferred Securities.
ARTICLE VI
RIGHTS AND REMEDIES; DISTRIBUTION OF THE SENIOR DEFERRABLE NOTES; TAX EVENT
REDEMPTION
Section 6.1 Rights and Remedies of the Collateral Agent. (a) In
addition to the rights and remedies specified in Section 4.4 hereof or otherwise
available at law or in equity, after an event of default hereunder, the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
"Code") (whether or not the Code is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Wherever reference is made in this Agreement to any section of the
Code, such reference shall be deemed to include a reference to any provision of
the Code which is 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 Trust Preferred
Securities or other Collateral in full satisfaction of the Holders' obligations
under the Purchase Contracts or (ii) sale of the Pledged Trust Preferred
Securities or other Collateral in one or more public or private sales.
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(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 Article III 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 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 all payments of (i) the Stated Amount of or,
cash distributions on, the Pledged Trust Preferred Securities, (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 Article 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, its bad faith or its own willful misconduct.
Section 6.2 Distribution of the Senior Deferrable Notes; Investment
Company Event; Tax Event Redemption. Upon the occurrence of an Investment
Company Event or a Liquidation of the Trust, a principal amount of the Senior
Deferrable Notes constituting the assets of the Trust and underlying the Trust
Preferred Securities equal to the aggregate stated liquidation amount of the
Pledged Trust Preferred Securities shall be delivered to the Collateral Agent in
exchange for the Pledged Trust Preferred Securities. In the event the Collateral
Agent receives such Senior Deferrable Notes in respect of Pledged Trust
Preferred Securities upon the occurrence of an Investment Company Event or
liquidation of the Trust, the Collateral Agent shall Transfer the Senior
Deferrable Notes to the Collateral Account in the manner specified herein
(including, without limitation, physical delivery thereof as set forth in
Section 2.1) for Pledged Trust Preferred Securities to secure the obligations of
the Holders of Income PRIDES to purchase the Company's Common Stock under the
related Purchase Contracts. Thereafter, the Collateral Agent shall have such
security interests, rights and obligations with respect to the Senior Deferrable
Notes as it had in respect of the Pledged Trust Preferred Securities as provided
in Articles II, III, IV, V and VI hereof, and any reference herein to the
Pledged Trust Preferred Securities shall be deemed to be referring to such
Senior Deferrable Notes.
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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 Senior
Deferrable Notes shall be delivered to the Collateral Agent by the Property
Trustee or upon a dissolution of the Trust and the distribution of the related
Senior Deferrable Notes by the Senior Deferrable Note Trustee on or prior to
12:30 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 Trust Preferred Securities or
Senior Deferrable Notes, as the case may be. In the event the Collateral Agent
receives such Redemption Price, the Collateral Agent will, at the written
direction of the Company, apply an amount equal to the Redemption Amount of such
Redemption Price to purchase from the Quotation Agent the Treasury Portfolio and
promptly remit the remaining portion of such Redemption Price to the Purchase
Contract Agent for payment to the Holders of Income PRIDES. The Collateral Agent
shall Transfer the Treasury Portfolio to the Collateral Account in the manner
specified herein for Pledged Trust Preferred Securities 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 Trust Preferred Securities. Thereafter the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Treasury Portfolio as it had in respect of the Pledged Trust
Preferred Securities or Senior Deferrable Notes, as the case may be, as provided
in Articles II, III, IV, V and VI, and any reference herein to the Pledged Trust
Preferred Securities or the Senior Deferrable Notes shall be deemed to be
reference to such Treasury Portfolio.
Section 6.3 Substitutions. Whenever a Holder has the right to
substitute Treasury Securities, Trust Preferred Securities 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.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS.
Section 7.1 Representations and Warranties. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and
lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral
and, in the case of Collateral delivered in physical form, is the sole
holder of such Collateral and is the sole beneficial owner of, or has
the right to Transfer, the Collateral it Transfers to the Collateral
Agent, free and clear of any security interest, lien, encumbrance,
call, liability to pay money or other restriction other than the
security interest and lien granted under Section 2.1 hereof;
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(c) upon the Transfer of the Collateral to the Collateral
Account, the Collateral Agent, for the benefit of the Company, will
have a valid and perfected first priority security interest therein
(assuming that any central clearing operation or any Intermediary or
other entity not within the control of the Holder involved in the
Transfer of the Collateral, including the Collateral Agent, gives the
notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the
establishment and exercise of control pursuant to Section 2.2 hereof);
and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result in the creation of any
security interest, lien or other encumbrance on the Collateral other
than the security interest and lien granted under Section 2.1 hereof or
violate any provision of any existing law or regulation applicable to
it or of any mortgage, charge, pledge, indenture, contract or
undertaking to which it is a party or which is binding on it or any of
its assets.
Section 7.2 Covenants. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will
create or purport to create or allow to subsist any mortgage, charge,
lien, pledge or any other security interest whatsoever over the
Collateral or any part of it other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will
sell or otherwise dispose (or attempt to dispose) of the Collateral or
any part of it except for the beneficial interest therein, subject to
the pledge hereunder, transferred in connection with the Transfer of
the Securities.
ARTICLE VIII
THE COLLATERAL AGENT.
Section 8.1 Appointment, Powers and Immunities. The Collateral Agent
shall act as Agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. Each of
the Collateral Agent, the Custodial Agent and the Securities Intermediary: (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants or obligations shall be inferred from
this Agreement against any of them, nor shall any of them be bound by the
provisions of any agreement by any party hereto beyond the specific terms
hereof; (b) shall not be responsible for any recitals contained in this
Agreement, or in any certificate or other document referred to or provided for
in, or received by it under, this Agreement, the 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 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
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litigation or collection proceedings hereunder (except in the case of the
Collateral Agent, pursuant to directions furnished under Section 8.2 hereof,
subject to Section 8.6 hereof); (d) shall not be responsible for any action
taken or omitted to be taken by it hereunder or under any other document or
instrument referred to or provided for herein or in connection herewith or
therewith, except for its own negligence or willful misconduct; and (e) shall
not be required to advise any party as to selling or retaining, or taking or
refraining from taking any action with respect to, the Securities or other
property deposited hereunder; 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 Agent, the Custodial Agent
or the Securities Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this Agreement; provided,
however, that (i) such direction shall not conflict with the provisions of any
law or of this Agreement and (ii) the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall be adequately indemnified as provided herein.
Nothing in this Section 8.2 shall impair the right of the Collateral Agent in
its discretion to take any action or omit to take any action which it deems
proper and which is not inconsistent with such direction.
Section 8.3 Reliance by Collateral Agent. Each of the Securities
Intermediary, the Custodial Agent and the Collateral Agent shall be entitled
conclusively to rely upon any certification, order, judgment, opinion, notice or
other communication (including, without limitation, any thereof by telephone or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein) , and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be. As to
any matters not expressly provided for by this Agreement, the Collateral Agent,
the Custodial Agent and the Securities Intermediary shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.
Section 8.4 Rights in Other Capacities. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any Holder of
Securities and any holder of Separate Trust Preferred Securities (and any of
their respective
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subsidiaries of affiliates) as if it were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary and their
affiliates may accept fees and other consideration from the Purchase Contract
Agent, any Holder of Securities or any holder of Separate Trust Preferred
Securities without having to account for the same to the Company; provided that
each of the Securities Intermediary, the Custodial Agent and the Collateral
Agent covenants and agrees with the Company that it shall not accept, receive or
permit there to be created in favor of itself and shall take no affirmative
action to permit there to be created in favor of any other Person, any security
interest, lien or other encumbrance of any kind in or upon the Collateral and
the Collateral shall be segregated on the books and records of the Collateral
Agent and not commingled with any other assets of any such Person.
Section 8.5 Non-Reliance on Collateral Agent. None of the Securities
Intermediary, the Custodial Agent or the Collateral Agent shall be required to
keep itself informed as to the performance or observance by the Purchase
Contract Agent or any Holder of Securities of this Agreement, the Purchase
Contract Agreement, the 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
Trust Preferred Securities (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
expenses incurred without negligence or willful misconduct on its part, arising
out of or in connection with 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
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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 expenses which
the Collateral Agent or the Custodial Agent, as the case may be, may incur by
reason of its acting without willful misconduct or gross negligence. The
Collateral Agent or the Custodial Agent may in addition elect to commence an
interpleader action or seek other judicial relief or orders as the Collateral
Agent or the Custodial Agent, as the case may be, may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor the Custodial Agent shall be required to take any action
that is in its opinion contrary to law or to the terms of this Agreement, or
which would in its opinion subject it or any of its officers, employees or
directors to liability.
Section 8.8 Resignation of Collateral Agent. Subject to the appointment
and acceptance of a successor Collateral Agent or Custodial Agent as provided
below, (a) the Collateral Agent and the Custodial Agent may resign at any time
by giving notice thereof to the Company and the Purchase Contract Agent as
Attorney-in-fact for the Holders of 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 or agency in New York, New York with a combined capital and
surplus of at least $50,000,000. Upon the acceptance of any appointment as
Collateral Agent or Custodial Agent, as the case may be, hereunder by a
successor Collateral Agent or Custodial Agent, as the case may be, such
successor shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Collateral Agent or Custodial
Agent, as the case may be, and the retiring Collateral Agent or Custodial Agent,
as the case may be, shall take all appropriate action to transfer any money and
property held by it hereunder (including the Collateral) to such successor. The
retiring Collateral Agent or Custodial Agent shall, upon such succession, be
discharged from its duties and obligations as Collateral Agent or Custodial
Agent hereunder. After any retiring Collateral Agent's or Custodial Agent's
resignation hereunder as Collateral Agent or Custodial Agent, the provisions of
this Section 8.8 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Collateral
Agent or Custodial 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.
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Section 8.9 Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
Section 8.10 Survival. The provisions of this Article VIII shall
survive termination of this Agreement and the resignation or removal of the
Collateral Agent or the Custodial Agent.
Section 8.11 Exculpation. Anything in this Agreement to the contrary
notwithstanding, in no event shall any of the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, employees or agents be
liable under this Agreement to any third party for indirect, special, punitive,
or consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent, the Custodial Agent or the Securities Intermediary, or any of them
incurred without any act or deed that is found to be attributable to gross
negligence, bad faith or willful misconduct on the part of the Collateral Agent,
the Custodial Agent or the Securities Intermediary.
ARTICLE IX
AMENDMENT.
Section 9.1 Amendment Without Consent of Holders. Without the consent
of any Holders or the holders of any Separate Trust Preferred Securities, the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, at any time and from time to time, may amend
this Agreement, in form satisfactory to the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the
Company; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company so long as such covenants or such surrender do not adversely
affect the validity, perfection or priority of the security interests
granted or created hereunder; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or
Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such
provisions herein, or to make any other provisions with respect to
such matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
Section 9.2 Amendment with Consent of Holders. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of
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modifying in any manner the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Security adversely affected thereby,
(1) change the amount or type of Collateral underlying a Security
(except for the rights of Holders of Income PRIDES to substitute the
Treasury Securities for the Pledged Trust Preferred Securities 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 Trust Preferred Securities 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; or
(3) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to
prove the particular form of any proposed amendment, but it shall be sufficient
if such Act shall approve the substance thereof.
Section 9.3 Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 6.1 hereof, with respect to the Collateral
Agent, and Section 7.1 of the Purchase Contract Agreement, with respect to the
Purchase Contract Agent) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and that all conditions precedent, if any, to the execution
and delivery of such amendment have been satisfied. 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 Article IX, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
Section 9.5 Reference to Amendments. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Section may, and shall if required
by the Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement in exchange for Outstanding
Security Certificates.
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ARTICLE X
MISCELLANEOUS.
Section 10.1 No Waiver. No failure on the part of any party hereto or
any of its agents to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by any party hereto or
any of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
Section 10.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the state of New York, without limiting
the foregoing, the above choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent and the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account, the Company
and the Purchase Contract Agent. The Company, the Purchase Contract Agent, 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
Purchase Contract Agent, 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. The Company, the Purchase Contract Agent, 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 waives the right to a trial by
jury in any action or proceeding with the Collateral Agent, the Custodian Agent
and the Securities Intermediary.
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
foresaid.
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.
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Section 10.5 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 10.6 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
Section 10.7 Expenses, Etc. The Company agrees to reimburse the
Collateral Agent and the Custodial Agent for: (a) all reasonable out-of-pocket
costs and expenses of the Collateral Agent and the Custodial Agent (including,
without limitation, the reasonable fees and expenses of counsel to the
Collateral Agent and the Custodial Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
Section 10.8 Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of
the Purchase Contracts or the Securities or any other agreement or
instrument relating hereto;
(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.
SEMCO ENERGY, INC.
By:
-----------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman of the Board and Chief Executive Officer
Address for Notices:
SEMCO Energy, Inc.
000 Xxxxx Xxxxxx, Xxxx Xxxxx, XX 00000
Attention: Treasurer
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
as Purchase Contract Agent and as attorney-in-fact
of the Holders from time to time of the Securities
By:
-----------------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
Address for Notices:
Bank One Trust Company, National Association
00xx Xxxxx, Xxxxx XX0-0000,
000 Xxxxxxxx Xxxxxx,
Xxxxxxx, XX 00000
Attention: Corporate Trust Administration
The Bank of New York, as Collateral Agent,
Custodial Agent and as Securities Intermediary
By:
-----------------------------------------------------
Name:
Title:
Address for Notices:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
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EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Re: FELINE PRIDES of SEMCO Energy, Inc.
(the "Company"), and SEMCO Capital Trust II
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of June 19, 2000, (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, Custodial Agent and the Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of Income PRIDES and Growth PRIDES from time to time, that the
Holder of Securities listed below (the "Holder") has elected to substitute [$
aggregate principal amount of Treasury Securities] [$ Stated Amount of
Trust Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio] in exchange for an equal Value of [Pledged Trust
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio] [Pledged Treasury Securities] held by you in accordance with
the Pledge Agreement and has delivered to us a notice stating that the Holder
has Transferred [Treasury Securities] [(Trust Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio] to you, as
Collateral Agent. We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Trust Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio], to release the (Trust Preferred
Securities or the Appropriate Applicable Ownership Interest of the Treasury
Portfolio] [Treasury Securities) related to such [Income PRIDES] [Growth PRIDES]
to us in accordance with the Holder's instructions. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.
Date: Bank One Trust Company, National
------------------------------- Association
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Medallion Guarantee:
---------------
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Please print name and address of Registered Holder electing to
substitute [Treasury Securities] [Trust Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] for the [Pledged Trust
Preferred Securities or the Treasury Portfolio] [Pledged Treasury Securities]:
------------------------------- -------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
-------------------------------
-------------------------------
Address
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EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Re: FELINE PRIDES of SEMCO Energy, Inc.
(the "Company"), and SEMCO Capital Trust II
The undersigned Holder hereby notifies you that it has delivered to
, as Collateral Agent, [$ aggregate principal amount of Treasury
Securities] [$ aggregate Stated Amount of Trust Preferred Securities
or the appropriate Applicable Ownership Interest of the Treasury Portfolio] in
exchange for an equal Value of [Pledged Trust Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio] [Pledged
Treasury Securities] held by the Collateral Agent, in accordance with Section
[4.1][4.2] of the Pledge Agreement, dated as of June 19, 2000 (the "Pledge
Agreement"), between you, the Company and the Collateral Agent. The undersigned
Holder hereby instructs you to instruct the Collateral Agent to release to you
on behalf of the undersigned Holder the [(Pledged Trust Preferred Securities 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.
Date: Medallion Guarantee:
------------------ ---------------------------
Please print name and address of Registered Holder:
--------------------------- -----------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
---------------------------
---------------------------
Address
1
34
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Re: Trust Preferred Securities of SEMCO Energy, Inc.
(the "Company"), and SEMCO Capital Trust II
The undersigned hereby notifies you in accordance with Section 4.6(c)
the Pledge Agreement, dated as of June 19, 2000 (the "Pledge Agreement"), among
the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and , as Purchase Contract Agent and as
attorney-in-fact for the Holders of Income PRIDES and Growth PRIDES from time to
time, that the undersigned elects to deliver $ stated liquidation
amount of Trust Preferred Securities for delivery to the Remarketing Agent on
the fourth Business Day immediately preceding the Purchase Contract Settlement
Date for remarketing pursuant to Section 4.6(c) of the Pledge Agreement. The
undersigned will, upon request of the Remarketing Agent, execute and deliver any
additional documents deemed by the Remarketing Agent or by the Company to be
necessary or desirable to complete the sale, assignment and transfer of the
Trust Preferred Securities tendered hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A,
Payment Instructions." The undersigned hereby instructs you, in the event of
Failed Remarketing, upon receipt of the Trust Preferred Securities tendered
herewith from the Remarketing Agent, to be delivered to the person(s) and the
addresses) indicated herein under "B. Delivery Instructions."
1
35
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 Trust Preferred Securities tendered hereby and that the undersigned
is the record owner of any Trust Preferred Securities tendered herewith in
physical form or a participant in The Depositary Trust Company ("DTC") and the
beneficial owner of any Trust Preferred Securities tendered herewith by
book-entry transfer to your account at DTC and (ii) agrees to be bound by the
terms and conditions of Section 4.6(c) of the Pledge Agreement. Capitalized
terms used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Date:
---------------------------------------
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Medallion Guarantee:
--------------
Please print name and address:
----------------------------- -------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
-----------------------------
-----------------------------
-----------------------------
Address
2
36
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, Trust Preferred Securities 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)
It the event of a Failed Remarketing, Trust Preferred Securities which are in
book-entry form should be credited to the account at The Depositary Trust
Company set forth below.
----------------------------
DTC Account Number
Name of Account Party:
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EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Re: Trust Preferred Securities of SEMCO Energy, Inc.
(the "Company"), and SEMCO Capital Trust II
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of June 19, 2000 (the "Pledge Agreement")
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and , as Purchase Contract Agent and as
attorney-in-fact for the Holders of Income PRIDES and Growth PRIDES from time to
time, that the undersigned elects to withdraw the $ aggregate
stated liquidation amount of Trust Preferred Securities 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
Trust Preferred Securities to the undersigned in accordance with the
undersigned's instructions. With this notice, the Undersigned hereby agrees to
be bound by the terms and conditions of Section 4.6(c) of the Pledge Agreement.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date:
---------------------------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Medallion Guarantee:
------------------
Please print name and address:
----------------------------- -------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
----------------------------------
----------------------------------
----------------------------------
Address
1
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A. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Trust Preferred Securities 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)
It the event of a Failed Remarketing, Trust Preferred Securities which are in
book-entry form should be credited to the account at The Depositary Trust
Company set forth below.
-------------------------
DTC Account Number
Name of Account Party:
2
