EXHIBIT 4.4
EXECUTION COPY
XL CAPITAL LTD,
THE BANK OF NEW YORK,
as Collateral Agent, Custodial Agent and Securities Intermediary
AND
THE BANK OF NEW YORK,
as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of December 9, 2005
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS..........................................................2
SECTION 1.1 Definitions.................................................2
ARTICLE II PLEDGE; CONTROL AND PERFECTION......................................4
SECTION 2.1 The Pledge..................................................4
SECTION 2.2 Delivery, Control and Perfection............................5
ARTICLE III PAYMENTS ON COLLATERAL.............................................7
SECTION 3.1 Payments ...................................................7
SECTION 3.2 Application of Payments.....................................8
ARTICLE IV SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES.............9
SECTION 4.1 Collateral Substitution and the Creation
of Stripped Units.........................................9
SECTION 4.2 Collateral Substitution and the Re-Creation
of Normal Units...........................................9
SECTION 4.3 Termination Event..........................................10
SECTION 4.4 Early Settlement; Merger Early Settlement;
Cash Settlement..........................................11
SECTION 4.5 Remarketing; Application of Proceeds; Settlement...........11
ARTICLE V VOTING RIGHTS -- NOTES..............................................13
SECTION 5.1 Exercise by Purchase Contract Agent........................13
ARTICLE VI RIGHTS AND REMEDIES; SPECIAL EVENT REDEMPTION......................14
SECTION 6.1 Rights and Remedies of the Collateral Agent................14
SECTION 6.2 Substitutions..............................................15
SECTION 6.3 Special Event Redemption...................................15
SECTION 6.4 Cash Received from Holders of Normal Units
not Participating in the Remarketing....................15
ARTICLE VII REPRESENTATIONS AND WARRANTIES; COVENANTS.........................16
SECTION 7.1 Representations and Warranties of the Holders..............16
SECTION 7.2 Representations and Warranties of the Collateral
Agent, Custodial Agent and Securities Intermediary.......16
SECTION 7.3 Covenants..................................................17
ARTICLE VIII THE COLLATERAL AGENT.............................................17
SECTION 8.1 Appointment, Powers and Immunities.........................17
SECTION 8.2 Instructions of the Company................................19
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SECTION 8.3 Reliance 19
SECTION 8.4 Rights in Other Capacities.................................20
SECTION 8.5 Non-Reliance on Collateral Agent...........................20
SECTION 8.6 Compensation and Indemnity.................................20
SECTION 8.7 Failure to Act.............................................21
SECTION 8.8 Resignation; Replacement of Collateral Agent,
Custodial Agent or Securities Intermediary...............22
SECTION 8.9 Right to Appoint Agent or Advisor..........................23
SECTION 8.10 Survival...................................................23
SECTION 8.11 Exculpation................................................23
SECTION 8.12 Limitation on Duty.........................................23
ARTICLE IX AMENDMENT..........................................................24
SECTION 9.1 Amendment Without Consent of Holders.......................24
SECTION 9.2 Amendment with Consent of Holders..........................25
SECTION 9.3 Execution of Amendments....................................25
SECTION 9.4 Effect of Amendments.......................................26
SECTION 9.5 Reference to Amendments....................................26
ARTICLE X MISCELLANEOUS.......................................................26
SECTION 10.1 No Waiver.................................................26
SECTION 10.2 GOVERNING LAW.............................................26
SECTION 10.3 Judgment Currency.........................................27
SECTION 10.4 Notices ..................................................27
SECTION 10.5 Successors and Assigns....................................28
SECTION 10.6 Counterparts..............................................28
SECTION 10.7 Severability..............................................28
SECTION 10.8 Expenses, Etc.............................................28
SECTION 10.9 Security Interest Absolute................................29
SECTION 10.10 Waiver of Jury Trial......................................29
SECTION 10.11 Incorporation by Reference................................29
EXHIBIT A Instruction from Purchase Contract Agent to Collateral Agent
EXHIBIT B Instruction to Purchase Contract Agent
EXHIBIT C Instruction to Custodial Agent Regarding Remarketing
EXHIBIT D Instruction to Custodial Agent Regarding Withdrawal from Remarketing
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of December 9, 2005 (this "Agreement"),
among XL Capital Ltd, a Cayman Islands exempted limited company (the "Company"),
The Bank of New York, a New York banking corporation, not individually but
solely as collateral agent (in such capacity, together with its successors in
such capacity, the "Collateral Agent"), as custodial agent (in such capacity,
together with its successors in such capacity, the "Custodial Agent") and as
"securities intermediary" as defined in Section 8-102(a)(14) of the Code (as
defined herein) (in such capacity, together with its successors in such
capacity, the "Securities Intermediary"), and The Bank of New York, a New York
banking corporation, not individually but solely as purchase contract agent and
as attorney-in-fact of the Holders from time to time of the Units (in such
capacity, together with its successors in such capacity, the "Purchase Contract
Agent") under the Purchase Contract Agreement (as defined herein).
RECITALS
WHEREAS, the Company and the Purchase Contract Agent are parties
to the Purchase Contract Agreement, dated as of the date hereof (as modified,
amended or supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued Units having a Stated Amount
of $25 per Unit, all of which will initially be Normal Units.
WHEREAS, each Normal Unit will be comprised of (a) a Purchase
Contract and (b) either beneficial ownership of (i) a 1/40, or 2.5%, beneficial
ownership interest in a Note having a $1,000 principal amount or (ii) following
a Special Event Redemption in accordance with the Purchase Contract Agreement
and the terms of the Notes, beneficial ownership of the Treasury Consideration.
WHEREAS, in accordance with the terms of the Purchase Contract
Agreement, a Holder of Normal Units may separate the Notes or the Treasury
Consideration, as applicable, from the related Purchase Contracts by
substituting for such Notes or the Treasury Consideration, as the case may be,
Treasury Securities that will pay in the aggregate an amount equal to the
aggregate Stated Amount of such Normal Units. Upon such separation, the Normal
Units will become Stripped Units. Each Stripped Unit will be comprised of (a) a
Purchase Contract and (b) a 1/40 undivided beneficial interest in a Treasury
Security, or, in the case of an opt-out pursuant to Section 6.4, the Cash
Consideration.
WHEREAS, pursuant to the terms of the Purchase Contract Agreement
and the Purchase Contracts, the Holders, from time to time, of the Units 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 Notes, any Treasury
Consideration 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.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, 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 Units, 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) capitalized terms used but not defined herein are used as
defined in the Purchase Contract Agreement;
(b) the defined terms in this Agreement have the meanings
assigned to them in this Article and include the plural as well as the singular;
and
(c) 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.
"AGREEMENT" means this agreement 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.
"CASH CONSIDERATION" has the meaning specified in the Purchase
Contract Agreement.
"CODE" has the meaning specified in Section 6.1 hereof.
"COLLATERAL" has the meaning specified in Section 2.1(a) hereof.
"COLLATERAL ACCOUNT" means the securities account (number 115392)
maintained at The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxxxx 0X, Xxx Xxxx, Xxx
Xxxx 00000, in the name of "BNY PCA HOLD CERTSECUR XL CAP LTD COLLA/C" and any
successor account.
"COLLATERAL AGENT" has the meaning specified in the first
paragraph of this Agreement.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such pursuant to
the applicable provisions of the Purchase Contract Agreement, and thereafter
"Company" shall mean such successor.
"CUSTODIAL AGENT" has the meaning specified in the first paragraph
of this Agreement.
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"INDENTURE" means the Indenture dated as of June 2, 2004 between
the Company and The Bank of New York, as trustee, as supplemented by the Third
Supplemental Indenture, dated as of December 9, 2005.
"INTERMEDIARY" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"PLEDGE" has the meaning specified in Section 2.1(c) hereof.
"PLEDGED NOTES" has the meaning specified in Section 2.1(c)
hereof.
"PLEDGED TREASURY CONSIDERATION" has the meaning specified in
Section 2.1(c) hereof.
"PLEDGED TREASURY SECURITIES" has the meaning specified in Section
2.1(c) hereof.
"PROCEEDS" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, collection or disposition of the Collateral or any
proceeds thereof.
"PURCHASE CONTRACT AGENT" has the meaning specified in the first
paragraph of this Agreement.
"PURCHASE CONTRACT AGREEMENT" has the meaning specified in the
Recitals.
"SECURITIES INTERMEDIARY" has the meaning specified in the first
paragraph of this Agreement.
"SECURITY ENTITLEMENT" has the meaning set forth in Section
8-102(a)(17) of the Code.
"SEPARATE NOTES" means any Notes that are not Pledged Notes.
"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 certificated
securities, delivery as provided in 8-301(a) of the UCC in appropriate
physical form to the recipient accompanied by any duly executed
instruments of transfer, assignments in blank, transfer tax stamps and
any other documents necessary to constitute a legally valid transfer to
the recipient; and
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(ii) in the case of Collateral consisting of security
entitlements relating to securities maintained in book-entry form, by
causing a "securities intermediary" (as defined in Section 8-102(a)(14)
of the Code) to (a) credit such "security entitlement" (as defined in
Section 8-102(a)(17) of the Code) to a "securities account" (as defined
in Section 8-501(a) of the Code) maintained by or on behalf of the
recipient and (b) 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.
In addition, any Transfer of Treasury Securities and Treasury
Consideration hereunder shall be made in accordance with the TRADES
Regulations and other applicable law.
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
------------------------------
SECTION 2.1 THE PLEDGE. (a) The Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact hereby pledge and
grant to the Collateral Agent, for the benefit of the Company, as collateral
security for the payment and performance when due by such Holders of their
respective obligations to the Company under the related Purchase Contracts, a
security interest in, and right of set-off against, all of the right, title and
interest of the Purchase Contract Agent and such Holders in:
(i) the Notes constituting a part of the Units that have not
been released by the Collateral Agent, other than a release to the
Remarketing Agent in connection with a remarketing under Section 4.5
hereof, to such Holders under the provisions of this Agreeement;
(ii) (A) the Treasury Consideration or Treasury Securities
constituting a part of the Units, (B) any Treasury Securities delivered
in exchange for any Notes or Treasury Consideration, as applicable, in
accordance with Section 4.1 hereof, and (C) any Notes or Treasury
Consideration, as applicable, delivered in exchange for any Treasury
Securities in accordance with Section 4.2 hereof, in each case that have
been Transferred to or otherwise received by the Collateral Agent and not
released by the Collateral Agent, other than a release to the Remarketing
Agent in connection with a remarketing under Section 4.5 hereof, to such
Holders under the provisions of this Agreement;
(iii) the Collateral Account and all securities, financial
assets, security entitlements, cash and other property credited thereto
and all Security Entitlements related thereto;
(iv) upon the occurrence of a Special Event Redemption, the
Treasury Portfolio Transferred to the Collateral Account;
(v) all Proceeds of the foregoing; and
(vi) all powers and rights now owned or hereafter acquired under
or with respect to any of the foregoing (all of the foregoing,
collectively, the "COLLATERAL").
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(b) Prior to or concurrently with the execution and delivery of
this Agreement, the Purchase Contract Agent, on behalf of the initial Holders of
the Units, shall cause the Notes comprising a part of the Normal Units, which
will be subject to the Pledge set forth in this Section 2.1, to be Transferred
to the Collateral Agent for the benefit of the Company.
(c) The pledge provided in this Section 2.1 is herein referred
to as the "Pledge" and the Notes (including any Notes that are delivered
pursuant to Section 6.2 hereof), Treasury Consideration and Treasury Securities
subject to the Pledge, excluding any Notes, Treasury Consideration or Treasury
Securities released from the Pledge as provided in Sections 4.1, 4.2 and 4.3
hereof, respectively, are hereinafter referred to as "Pledged Notes," "Pledged
Treasury Consideration" and "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. 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. Whenever directed by the Collateral Agent acting on
behalf of the Company, the Securities Intermediary shall have the right to
reregister in its name the Notes or any other securities held in physical form.
(d) Except as may be required in order to release Notes or
Treasury Consideration, as applicable, in connection with a Special Event
Redemption or with a Holder's election to convert its investment from a Normal
Unit to a Stripped Unit, or except as may be required in order to release
Treasury Securities in connection with a Holder's election to convert its
investment from a Stripped Unit to a Normal Unit, or except as otherwise
required to release Notes, Treasury Consideration or Treasury Securities as
specified herein, the Collateral Agent, shall not relinquish physical possession
of any certificate evidencing Notes, Treasury Securities or Treasury
Consideration, as applicable, prior to the termination of this Agreement. If it
becomes necessary for the Collateral Agent to relinquish physical possession of
a certificate in order to release a portion of the Notes evidenced thereby from
the Pledge, the Company shall use its commercially reasonable best efforts to
arrange for the Securities Intermediary to obtain physical possession of a
replacement certificate evidencing any Notes remaining subject to the Pledge
hereunder registered to the Securities Intermediary or endorsed in blank (or
accompanied by a bond power endorsed in blank) within fifteen calendar days of
the date the Securities Intermediary relinquished possession. The Securities
Intermediary shall promptly notify the Company and the Collateral Agent of its
inability to obtain possession of any such replacement certificate as required
hereby.
(e) Notwithstanding anything contained herein to the contrary,
for avoidance of doubt, (i) the cash payments at the rate of 5.25% per year of
the Stated Amount of the Notes and (ii) after a Special Event Redemption, the
quarterly payments with respect to the Treasury Consideration (as specified in
clause (B) of the definition of Treasury Consideration) that are a part of the
Normal Units to Holders of Normal Units shall not be subject to the Pledge and
therefore are not part of the Collateral.
SECTION 2.2 DELIVERY, CONTROL AND PERFECTION. (a) The Purchase
Contract Agent shall immediately deliver to the Collateral Agent all
certificates or instruments
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representing the Collateral accompanied by stock or
bond powers duly executed in blank or other instruments of reasonable
satisfaction to the Collateral Agent.
(b) Except as provided in Section 5.1, at all times prior to
the termination of the Pledge, the Collateral Agent shall have sole control of
the Collateral Account, and the Securities Intermediary shall take instructions
and directions with respect to the Collateral Account solely from the Collateral
Agent. In connection with the Pledge granted in Section 2.1, and subject to the
other provisions of this Agreement, the Holders from time to time acting through
the Purchase Contract Agent, as their attorney-in-fact, hereby authorize and
direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent may deliver pursuant to the terms hereof or upon the written
direction of the Company with respect to the Collateral Account, the Collateral
credited thereto and any Security Entitlements with respect thereto. Such
instructions and entitlement orders may, without limitation, direct the
Securities Intermediary to transfer, redeem, assign, or otherwise deliver the
Notes, the Treasury Consideration and the Treasury Securities, and any Security
Entitlements with respect thereto, or sell, liquidate or dispose of such assets
through a broker designated by the Company, and to pay and deliver any income,
proceeds or other funds derived therefrom to the Company. The Collateral Agent
shall be the agent of the Company and shall act only in accordance with the
terms hereof or as otherwise 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 required by the
terms hereof or as otherwise directed in writing by the Company.
(c) 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, or its nominee, endorsed to the
Securities Intermediary, or its nominee, or in blank or credited to
another Collateral Account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to the
Collateral Account be registered in the name of the Purchase Contract
Agent, the Collateral Agent, the Company or any Holder, payable to the
order of, or specially indorsed to, the Purchase Contract Agent, the
Collateral Agent, the Company or any Holder except to the extent the
foregoing have been specially endorsed to the Securities Intermediary or
in blank;
(ii) all property delivered to the Securities Intermediary
pursuant to this Agreement (including, without limitation, any Notes,
Treasury Consideration or Treasury Securities) will be promptly credited
to the Collateral Account;
(iii) the Collateral Account is an account to which financial
assets are or may be credited, and the Securities Intermediary shall,
subject to the terms of this Agreement, treat the Purchase Contract Agent
as entitled to exercise the rights of any financial asset credited to the
Collateral Account;
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(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.
(d) 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.
(e) 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, as may be amended pursuant to Article IX hereof,
shall prevail.
(f) 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. Notwithstanding the foregoing, in no event shall the Collateral
Agent, the Custodial Agent, the Securities Intermediary or the Purchase Contract
Agent be responsible for the preparation or filing of any financing or
continuation statements in the appropriate jurisdictions or responsible for
maintenance or perfection of any security interest hereunder.
(g) The Purchase Contract Agent shall file with the United
States Internal Revenue Service and deliver to the Holders Forms 1099 (or
successor or comparable forms), to the extent required of it by law, with
respect to payments to the Holders.
ARTICLE III
PAYMENTS ON COLLATERAL
----------------------
SECTION 3.1 PAYMENTS. So long as the Purchase Contract Agent is
the registered owner of the Pledged Notes, Pledged Treasury Consideration or
Pledged Treasury Securities, it shall receive all payments thereon. If the
Pledged Notes are reregistered such that the Collateral Agent becomes the
registered holder, all payments of the principal of, or interest or other
amounts on, the Pledged Notes and all payments of the principal of, or cash
distributions on, any Pledged Treasury Consideration or Pledged Treasury
Securities, that are received by the
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Collateral Agent and 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) any interest payments with respect to
the Pledged Notes or Pledged Treasury Consideration (including as
specified in clause (B) of the definition of Treasury Consideration), as
the case may be, with respect to Normal Units and (B) any payments with
respect to any Notes or Treasury Consideration (including as specified in
clause (A) of the definition of Treasury Consideration), 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 the Normal Units, to the account designated by the Purchase
Contract Agent for such purpose no later than 11:00 a.m., New York City
time, on the Business Day such payment is received by the Collateral
Agent (provided that in the event such payment or payment instructions
are received by the Collateral Agent on a day that is not a Business Day
or after 10:30 a.m., New York City time, on a Business Day, then such
payment shall be made no later than 9:30 a.m., New York City time, on the
next succeeding Business Day);
(ii) in the case of any 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 Stripped Units, to the accounts and in
such amounts designated by the Purchase Contract Agent (subject to the
Purchase Contract Agent receiving such information from the Holders) 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 or payment instructions are
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); any payment to be made directly to the
Holders of such Stripped Units shall be subject to applicable federal
withholding law, including the requirement that a Holder shall have
provided to the Collateral Agent its certified taxpayer identification
number by furnishing appropriate Forms W-9 (or such other forms as shall
be applicable); and
(iii) in the case of payments in respect of any Pledged Notes,
Pledged Treasury Consideration (as specified in clause (A) of the
definition of Treasury Consideration) or Pledged Treasury Securities, as
the case may be, to be paid upon settlement of such Holder's obligations
to purchase Ordinary Shares under the Purchase Contract, to the Company
on the Stock Purchase Date in accordance with the procedure set forth in
Section 4.5(a) or 4.5(b) hereof, in full satisfaction of the respective
obligations of the Holders under the related Purchase Contracts and, to
the extent such payments exceed the Purchase Price, to the Purchase
Contract Agent for the benefit of the Holders.
SECTION 3.2 APPLICATION OF PAYMENTS. All payments received by the
Purchase Contract Agent as provided herein shall be applied by the Purchase
Contract Agent pursuant to the provisions of the Purchase Contract Agreement.
If, notwithstanding the foregoing, the Purchase Contract Agent shall receive any
payments of principal on account of any Notes or Treasury Consideration (which,
shall be as specified in clause (A) of the definition of Treasury
Consideration), as applicable, that, at the time of such payments, are Pledged
Notes or Pledged
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Treasury Consideration (which, shall be as specified in clause (A) of the
definition of Treasury Consideration), as the case may be, or a Holder of a
Stripped Unit 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 principal so received.
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES
-------------------------------------------------------
SECTION 4.1 COLLATERAL SUBSTITUTION AND THE CREATION OF STRIPPED
UNITS. At any time on or prior to the thirteenth Business Day immediately
preceding the Stock Purchase Date, a Holder of Normal Units shall have the right
to substitute Treasury Securities for the Pledged Notes or Pledged Treasury
Consideration, as the case may be, securing such Holder's obligations under the
Purchase Contracts comprising a part of such Normal Units, in integral multiples
of 40 Normal Units, or after a Special Event Redemption, in integral multiples
of Normal Units so that Treasury Securities to be deposited and the Treasury
Consideration, as the case may be, to be released are in integral multiples of
$1,000, by (a) Transferring to the Collateral Agent Treasury Securities having
an aggregate principal amount equal to the aggregate Stated Amount of such
Normal Units and (b) delivering such Normal Units to the Purchase Contract
Agent, accompanied by a notice, substantially in the form of EXHIBIT B hereto,
to the Purchase Contract Agent, with a copy of such notice to the Company,
stating that such Holder has Transferred Treasury Securities to the Collateral
Agent pursuant to clause (a) above (stating the principal amount, the maturities
and the CUSIP numbers 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 Notes or Pledged Treasury Consideration
related to such Normal Units, whereupon the Purchase Contract Agent shall
promptly give such instruction to the Collateral Agent, with a copy of such
instruction to the Company, in the form provided in EXHIBIT A. Upon receipt of
Treasury Securities from a Holder of Normal Units and the related instruction
from the Purchase Contract Agent, the Collateral Agent shall release the Pledged
Notes or Pledged Treasury Consideration and shall promptly Transfer such Pledged
Notes or Pledged Treasury Consideration 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, except as
otherwise set forth herein.
SECTION 4.2 COLLATERAL SUBSTITUTION AND THE RE-CREATION OF NORMAL
UNITS.
(a) At any time on or prior to the thirteenth Business Day
immediately preceding the Stock Purchase Date, a Holder of Stripped Units shall
have the right to reestablish Normal Units (a) consisting of the Purchase
Contracts and Notes in integral multiples of 40 Normal Units, or (b) after a
Special Event Redemption, consisting of the Purchase Contracts and the Treasury
Consideration (identified and calculated by reference to the Treasury
Consideration
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then comprising Normal Units) or the appropriate portion of the Treasury
Portfolio in integral multiples of Stripped Units so that the Treasury
Consideration to be deposited and the Treasury Securities to be released are in
integral multiples of $1,000, by (x) Transferring to the Collateral Agent Notes
or the Treasury Consideration, as the case may be, then comprising such number
of Normal Units as is equal to such Stripped Units and (y) delivering such
Stripped Units to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of EXHIBIT B hereto, to the Purchase Contract Agent,
with a copy of such notice to the Company, stating that such Holder has
transferred Notes or Treasury Consideration 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 Stripped Units, whereupon the Purchase Contract Agent shall give
such instruction to the Collateral Agent, with a copy of such instruction to the
Company, in the form provided in EXHIBIT A. Upon receipt of the Notes or the
Treasury Consideration, as the case may be, from such Holder and the instruction
from the Purchase Contract Agent, the Collateral Agent shall release the Pledged
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.
(b) Holders of Stripped Units who reestablish Normal Units
shall be responsible for any fees or expenses payable to the Collateral Agent
for its services as Collateral Agent in respect of the substitution, and the
Company shall not be responsible for any such fees or expenses.
SECTION 4.3 TERMINATION EVENT. (a) Upon receipt by the Collateral
Agent of written notice from the Company or the Purchase Contract Agent that
there has occurred a Termination Event and identifying the nature of the
Termination Event, the Collateral Agent shall release all Collateral from the
Pledge and shall promptly Transfer any Pledged Notes or Pledged Treasury
Consideration, as the case may be, and Pledged Treasury Securities to the
Purchase Contract Agent for the benefit of the Holders of the Normal Units and
the Stripped Units, respectively, free and clear of any lien, pledge or security
interest or other interest created in favor of the Collateral Agent hereby.
(b) If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code or becoming subject to a petition
under clause (ii) of the definition of Bankruptcy Law, and if the Collateral
Agent shall fail for any reason to promptly effectuate, the release and Transfer
of all Pledged Notes, Pledged Treasury Consideration or 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, at the expense of the
Company, 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 or becoming subject
to a petition under clause (ii) of the definition of Bankruptcy Law, 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
10
opinion, to refuse to effectuate the release and Transfer of all Pledged
Notes, Pledged Treasury Consideration or 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 applicable Bankruptcy Law
seeking an order requiring the Collateral Agent to effectuate the release
and transfer of all Pledged Notes, Pledged Treasury Consideration or
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 EARLY SETTLEMENT; MERGER EARLY SETTLEMENT; CASH
SETTLEMENT. Upon written notice to the Collateral Agent by the Purchase Contract
Agent that one or more Holders of Units have elected to effect Early Settlement,
Merger Early Settlement or Cash Settlement of their respective obligations under
the Purchase Contracts forming a part of such Units 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, Merger Early Settlement or Cash Settlement), and that
the Purchase Contract Agent has received from such Holders, and paid to the
Company as confirmed by written notice to the Collateral Agent by the Company,
the related Early Settlement Amounts, Merger Early Settlement Amounts or Cash
Settlement Amounts, as the case may be, pursuant to the terms of the Purchase
Contracts and the Purchase Contract Agreement and that all conditions to such
Early Settlement, Merger Early Settlement or Cash Settlement, as the case may
be, have been satisfied, then the Collateral Agent shall release from the Pledge
(a) Pledged Notes or Pledged Treasury Consideration, as the case may be, in the
case of a Holder of Normal Units or (b) Pledged Treasury Securities, in the case
of a Holder of Stripped Units, identified by the Purchase Contract Agent as
relating to such Purchase Contracts as to which such Holders have paid such
Early Settlement Amounts, Merger Early Settlement Amounts or Cash Settlement
Amounts, and shall Transfer all such Pledged Notes, Pledged Treasury
Consideration 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 4.5 REMARKETING; APPLICATION OF PROCEEDS; SETTLEMENT. (a)
Pursuant to the Purchase Contract Agreement, the Purchase Contract Agent shall
notify, by 10:00 a.m., New York City time, on the second Business Day
immediately preceding the Remarketing Date, the Remarketing Agent and the
Collateral Agent of the aggregate principal amount of Notes comprising part of
Normal Units to be remarketed. The Collateral Agent shall, by 10:00 a.m., New
York City time, on the Business Day immediately preceding the Remarketing Date,
without any instruction from Holders of Normal Units, deliver (i) the Pledged
Notes to be remarketed to the Remarketing Agent for remarketing and (ii) the
remaining Pledged Notes to the Purchase Contract Agent for distribution to the
Holders that have elected not to participate in the remarketing in accordance
with the Purchase Contract Agreement. Upon completion of a successful
remarketing, after deducting as the remarketing fee an amount not exceeding 25
basis points (0.25%) of the Remarketing Value of such Pledged Notes, the
Remarketing Agent will deliver the proceeds of such remarketing to the
Collateral Agent for the benefit of the Company to be held in Trust for the
Company. Upon receipt of the proceeds following a successful
11
remarketing, (i) the Collateral Agent, for the benefit of the Company, shall
thereupon apply such proceeds in an amount equal to the aggregate Stated Amount
of the related Normal Units in direct settlement and satisfaction in full of
such Normal Units Holders' obligations to pay to the Company the Purchase Price
under the Purchase Contracts on the Stock Purchase Date and (ii) the remaining
portion, if any, of the proceeds of such successful remarketing shall be
distributed by the Remarketing Agent to the Purchase Contract Agent for payment
on a pro rata basis to such Normal Units Holders participating in such
remarketing.
(b) The Remarketing Agent shall agree to make one or more
attempts to remarket the Notes in accordance with the procedures set forth in
the Purchase Contract Agreement and the Remarketing Agreement between the
Remarketing Date and the last Subsequent Remarketing Date. If by 4:00 p.m., New
York City time, on the third Business Day immediately preceding the Stock
Purchase Date the Remarketing Agent has failed to remarket the Notes at a price
equal to 100.25% of the aggregate principal amount of the Notes participating in
the remarketing, the "Last Failed Remarketing" shall be deemed to have occurred.
In this case, the Remarketing Agent will agree to advise the Collateral Agent in
writing that it cannot remarket the related Pledged Notes of such Holders of
Normal Units and the Remarketing Agent will agree pursuant to the Remarketing
Agreement to return to the Collateral Agent the Notes delivered to it pursuant
to Section 4.5(a) within three Business Days of the Last Failed Remarketing. The
Collateral Agent, for the benefit of the Company will, at the written direction
of the Company, deliver or dispose of the Pledged Notes in accordance with the
Company's written instructions to satisfy in full, from any such disposition or
retention, such Holders' obligations to pay the Purchase Price for the Ordinary
Shares; provided that if upon the Last Failed Remarketing, the Collateral Agent
delivers or disposes of the Pledged Notes in accordance with the written
instructions of the Company, any accumulated and unpaid interest on such Notes
will become payable by the Company to the Purchase Contract Agent for payment to
the Holder of the Normal Units to which such Notes relate in accordance with the
Purchase Contract Agreement.
(c) In the event a Holder of Stripped Units has not made an
Early Settlement, Merger Early Settlement or Cash Settlement of the Purchase
Contracts underlying its Stripped Units, such Holder shall be deemed to have
elected to pay for the Ordinary Shares to be issued under such Purchase
Contracts from the payments received in respect of the related Pledged Treasury
Securities. Without receiving any instruction from any such Holder of Stripped
Units, the Collateral Agent shall apply such payments to the Company in
settlement of such Purchase Contracts on the Stock Purchase Date pursuant to
written instructions from the Purchase Contract Agent. In the event the payments
received in respect of the related Pledged Treasury Securities are 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 payment to such Holders of Stripped Units.
(d) Pursuant to the Remarketing Agreement and the Purchase
Contract Agreement, on or prior to the thirteenth Business Day immediately
preceding the Stock Purchase Date, but no earlier than the sixteenth Business
Day immediately preceding the Stock Purchase Date, holders of Separate Notes may
elect to have their Separate Notes remarketed by delivering their Separate
Notes, together with a notice of such election, substantially in the form of
EXHIBIT C hereto, to the Custodial Agent. On the second Business Day immediately
prior to the
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Remarketing Date, by 10:00 a.m., New York City time, the Custodial Agent shall
notify the Remarketing Agent of the aggregate principal amount of such Separate
Notes to be remarketed. The Custodial Agent will hold such Separate Notes in an
account separate from the Collateral Account. A holder of Separate Notes
electing to have its Separate Notes 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 thirteenth Business Day
immediately preceding the Stock Purchase Date, upon which notice the Custodial
Agent will return such Separate Notes to such holder. On the Business Day
immediately preceding the Remarketing Date, the Custodial Agent at the written
direction of the Remarketing Agent will deliver to the Remarketing Agent for
remarketing all Separate Notes delivered to the Custodial Agent pursuant to this
Section 4.5(d) and not withdrawn pursuant to the terms hereof prior to such
date. In the event of a successful remarketing, after deducting as the
remarketing fee an amount not exceeding 25 basis points (0.25%) of the
Remarketing Value of such Separate Notes, the Remarketing Agent will remit to
the Custodial Agent, for the benefit of the holders of such Separate Notes, the
portion of the proceeds from such remarketing equal to the amount calculated in
respect of such Separate Notes as set forth in Section 5.4(b) of the Purchase
Contract Agreement. If, despite using reasonable best efforts, the Remarketing
Agent advises the Custodial Agent in writing that there has been a Last Failed
Remarketing, the Remarketing Agent will promptly return such Notes to the
Custodial Agent for redelivery to the holders of such Separate Notes. For
purposes of this Section 4.5(d), a "holder" of Separate Notes shall mean the
Person in whose name such Separate Notes are registered on the books of the
registrar for the Notes.
ARTICLE V
VOTING RIGHTS -- NOTES
----------------------
SECTION 5.1 EXERCISE BY PURCHASE CONTRACT AGENT. The Purchase
Contract Agent may exercise, or refrain from exercising, any and all voting and
other consensual rights pertaining to the Pledged Notes 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 Notes; and provided, further, that the Purchase Contract Agent shall
give the Company and the Collateral Agent at least five Business Days' prior
written notice of the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of any notices and
other communications in respect of any Pledged Notes, including notice of any
meeting at which holders of Notes are entitled to vote or solicitation of
consents, waivers or proxies of holders of Notes, the Collateral Agent shall use
reasonable efforts to send promptly to the Purchase Contract Agent such notice
or communication, and as soon as reasonably practicable after receipt of a
written request therefor from the Purchase Contract Agent, execute and deliver
to the Purchase Contract Agent such proxies and other instruments in respect of
such Pledged Notes (in form and substance satisfactory to the Collateral Agent)
as are prepared by the Purchase Contract Agent with respect to the Pledged
Notes.
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ARTICLE VI
RIGHTS AND REMEDIES; SPECIAL EVENT REDEMPTION
---------------------------------------------
SECTION 6.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT. (a) In
addition to the rights and remedies available at law or in equity, after an
event of default under any of the Purchase Contracts by a Holder thereof, 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, at the direction of the Company (i)
retention of the Pledged Notes or other Collateral in full satisfaction of the
Holders' obligations under the Purchase Contracts or (ii) sale of the Pledged
Notes or other Collateral in one or more public or private sales or otherwise at
the written direction of the Company.
(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 any Pledged Treasury
Consideration or Pledged Treasury Securities as provided in Article III hereof
in full satisfaction of the obligations of the Holder of the Units of which such
Pledged Treasury Consideration or Pledged Treasury Securities, as applicable, is
a part under the related Purchase Contracts, any such inability to make a
payment shall constitute an event of default under the Purchase Contracts and
the Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities or such Pledged Treasury Consideration, as applicable, and
such obligations of such Holder, any and all of the rights and remedies
available to a secured party under the Code and the TRADES Regulations after
default by a debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, the Collateral Agent is hereby
irrevocably authorized to receive and collect all payments of (i) the principal
amount of, or interest on, the Pledged Notes, or (ii) the principal amount of
the Pledged Treasury Consideration or Pledged Treasury Securities, subject, in
each case, to the provisions of Article III.
(d) The Purchase Contract Agent, individually and as
attorney-in-fact for each Holder of Units, agrees that, from time to time, upon
the written request of the Company or the Collateral Agent (acting upon the
written request of the Company), the Purchase Contract Agent or such Holder
shall execute and deliver such further documents and do such other acts and
things as may be necessary, including as the Company or the Collateral Agent
(acting upon the written request of the Company) 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
14
taking any such acts requested by the Company or the Collateral Agent (acting
upon the written request of the Company) hereunder, except for liability for its
own grossly negligent act, its own grossly negligent failure to act, its own bad
faith or its own willful misconduct.
SECTION 6.2 SUBSTITUTIONS. Whenever a Holder has the right to
substitute Treasury Securities, Notes, or Treasury Consideration, as the case
may be, for Collateral held by the Collateral Agent, such substitution shall not
constitute a novation of the security interest created hereby.
SECTION 6.3 SPECIAL EVENT REDEMPTION. Upon the occurrence of a
Special Event Redemption prior to the Stock Purchase Date and the receipt of the
Redemption Price of the Pledged Notes by the Collateral Agent, the Collateral
Agent will, at the written direction of the Company, apply the Redemption Price
to purchase on behalf of the Holders of Normal Units the Treasury Portfolio. The
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account
to secure the obligation of all Holders of Normal Units to purchase Ordinary
Shares of the Company under the Purchase Contracts constituting a part of such
Normal Units, in substitution for the Pledged Notes. 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 Notes as provided in
Articles II, III, IV, V and VI, and any reference herein to the Notes shall be
deemed to be reference to such Treasury Portfolio, and any reference herein to
interest on the Notes shall be deemed to be a reference to corresponding
distributions on such Treasury Portfolio. Upon the occurrence of a Special Event
Redemption and the satisfaction of all terms and conditions related thereto as
forth in the Indenture, including receipt of the Redemption Price, the
Collateral Agent shall be authorized to surrender the Notes in accordance with
the provisions of the Indenture.
SECTION 6.4 CASH RECEIVED FROM HOLDERS OF NORMAL UNITS NOT
PARTICIPATING IN THE REMARKETING. If a Holder of Normal Units shall opt not to
participate in the remarketing in accordance with the Purchase Contract
Agreement and upon the receipt by the Collateral Agent of the Cash Consideration
paid by such Holder sufficient to satisfy the Holder's obligations to the
Company under the related Purchase Contracts in full, the Collateral Agent shall
transfer such Cash Consideration to the Collateral Account to secure and be
applied in direct settlement and satisfaction in full of the obligations of such
Holder to purchase Ordinary Shares of the Company under the Purchase Contracts
constituting a part of such Normal Units. Thereupon, the Collateral Agent shall
deliver the related Pledged Notes to the Purchase Contract Agent on the Business
Day immediately preceding the first day of the Remarketing Period, free and
clear of any lien, claim and security interest created hereby. Thereafter, such
Units will be Stripped Units and the Collateral Agent shall have a first
priority perfected security interest in such Cash Consideration paid by such
Holder. In such event, all references in this Agreement, including for purposes
of Section 4.3, to the Treasury Securities or Pledged Treasury Securities shall
be deemed to include such Cash Consideration (the Cash Consideration subject to
the Pledge referred to as the "Pledged Cash Consideration") or Pledged Cash
Consideration, as the case may be, in addition to the Treasury Securities or
Pledged Treasury Securities, as the case may be, with respect to the applicable
Units.
15
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
-----------------------------------------
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF THE HOLDERS. 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,
and on each day a person becomes a Holder, 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;
(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); 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 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 REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL
AGENT, CUSTODIAL AGENT AND SECURITIES INTERMEDIARY. The Collateral Agent,
Custodial Agent and Securities Intermediary (each an "Agent") hereby represents
and warrants:
(a) The Collateral Agent, Custodial Agent and Securities
Intermediary is a banking corporation duly organized and existing under
the laws of the State of New York;
(b) The Securities Intermediary is a "securities intermediary"
as defined in Article 8-102(a)(14) of the Code and the Collateral Account
is a "securities account" as such term is defined in Section 8-501(a) of
the Code;
16
(c) The execution, delivery and performance by the Collateral
Agent, the Custodial Agent and the Securities Intermediary of this
Agreement have each been duly authorized by all necessary corporate
action on the part of each such Agent; this Agreement has been duly
executed and delivered by the Collateral Agent, the Custodial Agent and
the Securities Intermediary and constitutes a valid and legally binding
obligation of each of the Agents, enforceable against such Agents in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(d) The execution, delivery and performance by the Collateral
Agent, the Custodial Agent and the Securities Intermediary of this
Agreement do not violate or constitute a breach of the Articles of
Incorporation or By-Laws of any of such Agents; and
(e) No consent of any federal or state banking authority having
regulatory authority over the Agents in their individual capacity is
required for the execution and delivery of, or performance by the Agents
of their respective obligations under, this Agreement.
SECTION 7.3 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
Units.
ARTICLE VIII
THE COLLATERAL AGENT
--------------------
SECTION 8.1 APPOINTMENT, POWERS AND IMMUNITIES. (a) The
Collateral Agent, the Custodial Agent or the Securities Intermediary shall act
as agent for the Company hereunder with such powers as are specifically vested
in the Collateral Agent, the Custodial Agent or the Securities Intermediary, as
the case may be, by the terms of this Agreement, together with such other powers
as are reasonably incidental thereto. Each of the Collateral Agent, the
Custodial Agent and the Securities Intermediary:
17
(i) 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;
(ii) 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 Units 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 Custodial
Agent or the Securities Intermediary, as the case may be), the Units 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, except as expressly required
hereby, for the existence, validity, perfection, priority or maintenance
of any security interest created hereunder;
(iii) shall not be required to initiate or conduct any litigation
or collection proceedings hereunder (except in the case of the Collateral
Agent, pursuant to written directions furnished under Section 8.2 hereof,
subject to Section 8.6 hereof);
(iv) 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 gross negligence, bad faith or willful
misconduct;
(v) 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 Units or other property deposited hereunder;
(vi) may perform any of their duties hereunder directly or by or
through agents or attorneys appointed with due care;
(vii) shall be entitled to consult with counsel and to act in
full reliance upon the advice of such counsel concerning matters
pertaining to the agencies created hereby and its duties hereunder, and
shall not be liable for any action taken or omitted to be taken by it in
good faith and in reliance upon and in accordance with the reasonable
advice of counsel selected by it;
(viii) shall not be liable with respect to any action taken by it
in good faith in accordance with any direction of the Company or its
agents except for its own gross negligence or willful misconduct; and
(ix) shall not be liable for any failure or delay in the
performance of its obligations hereunder because of circumstances beyond
its control, including, but not limited to, acts of God, flood, war
(whether declared or undeclared), terrorism, fire, riot, embargo,
government action, including any laws, ordinances, regulations,
governmental
18
action or the like which delay, restrict or prohibit the providing of
services contemplated by this Agreement.
Subject to the foregoing, during the term of this Agreement, each
of the Collateral Agent, the Custodial Agent and the Securities Intermediary, in
connection with the safekeeping and preservation of the Collateral hereunder,
shall use the same standard of care it applies for similar property held for its
own account.
(b) 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 set-off, banker's lien,
liens or perfection rights as securities intermediary or any counterclaim
with respect to any of the Collateral.
(c) The Collateral Agent, Custodial Agent and Securities
Intermediary shall have no liability whatsoever for the action or
inaction of any Clearing Agency or any book-entry system thereof. In no
event shall any Clearing Agency or any book-entry system thereof be
deemed an agent or subcustodian of the Collateral Agent, Custodial Agent
and Securities Intermediary.
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,
the Custodial Agent or the Securities Intermediary, as the case may be, 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 that
(i) such direction shall be in writing and 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 each receive indemnity
reasonably satisfactory to it as provided herein. Nothing in this Section 8.2
shall impair the right of each of the Collateral Agent, the Custodial Agent or
the Securities Intermediary in its discretion to take any action or omit to take
any action which it deems proper and which is not inconsistent with such
direction.
SECTION 8.3 RELIANCE. Each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent, in absence of bad faith, shall be
entitled conclusively to rely upon any certification, order, judgment,
instructions, opinion, notice or other communication (including, without
limitation, any thereof by telephone or facsimile) reasonably 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 written 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
19
Securities Intermediary shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with written 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 Units
and any holder of Separate Notes (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be, and the Collateral
Agent, the Custodial Agent and the Securities Intermediary and their affiliates
may accept fees and other consideration from the Purchase Contract Agent, any
Holder of Units or any holder of Separate Notes 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 waives any right of set-off or banker's lien with respect to) 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 not be commingled with any other
assets of any such Person.
SECTION 8.5 NON-RELIANCE ON COLLATERAL AGENT. None of the
Securities Intermediary, the Custodial Agent or the Collateral Agent shall be
required to keep itself informed as to the performance or observance by the
Purchase Contract Agent or any Holder of Units of this Agreement, the Purchase
Contract Agreement, the Units 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 Units. 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 Units or any holder of Separate Notes (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:
(a) to pay each of the Collateral Agent, the Custodial Agent
and the Securities Intermediary from time to time such compensation as shall be
agreed in writing between the Company and the Collateral Agent, Custodial Agent
or the Securities Intermediary, as the case may be, for all services rendered by
each of them hereunder; and
(b) to indemnify the Collateral Agent, the Custodial Agent and
the Securities Intermediary and their officers, directors and agents for, and to
hold each of them harmless from and against, any loss, liability, claim, damage
or reasonable out-of-pocket expense incurred without gross negligence, willful
misconduct or bad faith on its part, arising out of or in connection with the
acceptance or administration of its powers and duties under this Agreement,
including the reasonable out-of-pocket costs and expenses (including reasonable
fees and
20
expenses of one counsel) of defending itself against any claim or liability in
connection with the exercise or performance of such powers and duties or
collecting such amounts. The Collateral Agent, the Custodial Agent and the
Securities Intermediary upon actual knowledge of a Responsible Officer thereof
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 control
the defense of such claim with counsel reasonably satisfactory to the
indemnified party, provided no conflict of interest exists (if such a conflict
of interests exists, the Collateral Agent, the Custodial Agent and the
Securities Intermediary will be entitled to one separate counsel at any one time
payable by the Company), and if the Company so elects to assume such defense,
the Company shall in good faith defend the Collateral Agent, the Custodial Agent
or the Securities Intermediary (in which case all attorney's fees and expenses
shall be borne by the Company). No compromise or settlement of any claims may be
effected by any party without the other parties' consent (which consent shall
not be unreasonably withheld) unless (i) there is no finding or omission of any
violation of law and no effect on any other claims that may be made against any
of such other parties and (ii) the sole relief provided is monetary damages that
are paid in full by the party seeking the compromise or settlement. The
provisions of this Section 8.6(b) shall survive the termination of this
Agreement or the resignation or removal of the Collateral Agent, the Custodial
Agent or the Securities Intermediary.
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, Custodial Agent and the
Securities Intermediary 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, Custodial Agent nor the Securities Intermediary 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, Custodial Agent and the Securities Intermediary shall be entitled to
refuse to act until either (i) such conflicting or adverse claims or demands
shall have been finally determined by a court of competent jurisdiction or
settled by agreement between the conflicting parties as evidenced in a writing,
reasonably satisfactory to the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, or (ii) the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may be, shall have
received security or an indemnity reasonably satisfactory to the Collateral
Agent, Custodial Agent or the Securities Intermediary, as the case may be,
sufficient to save the Collateral Agent, Custodial Agent or the Securities
Intermediary, as the case may be, harmless from and against any and all loss,
liability or reasonable out-of-pocket expense which the Collateral Agent,
Custodial Agent or the Securities Intermediary, as the case may be, may incur by
reason of its acting without bad faith, willful misconduct or negligence. The
Collateral Agent, Custodial Agent or the Securities Intermediary may, but shall
not be required, in addition elect to commence an interpleader action or seek
other judicial relief or orders at the expense of the Company as the Collateral
Agent, Custodial Agent or the Securities Intermediary, as the case may be, may
deem necessary. Notwithstanding anything contained herein to the contrary,
neither the Collateral Agent, Custodial Agent nor the Securities Intermediary
shall be required to take any action that is in the reasonable opinion of its
counsel contrary to law or to the terms of this Agreement, or which would in its
reasonable opinion subject it or any of its officers, employees or directors to
liability.
21
SECTION 8.8 RESIGNATION; REPLACEMENT OF COLLATERAL AGENT,
CUSTODIAL AGENT OR SECURITIES INTERMEDIARY. Subject to the appointment and
acceptance of a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as provided below, (a) the Collateral Agent, Custodial Agent or
the Securities Intermediary may resign at any time by giving notice thereof to
the Company and the Purchase Contract Agent as attorney-in-fact for the Holders
of Units, (b) the Collateral Agent, Custodial Agent or the Securities
Intermediary may be removed at any time by the Company (with or without cause)
by notice to the Purchase Contract Agent and the Collateral Agent, the Custodial
Agent and the Securities Intermediary and (c) if the Collateral Agent, Custodial
Agent or the Securities Intermediary fails to perform any of its material
obligations hereunder in any material respect for a period of not less than 20
days after receiving written notice of such failure by the Purchase Contract
Agent and such failure shall be continuing, the Collateral Agent, Custodial
Agent or the Securities Intermediary may be removed by the Purchase Contract
Agent. The Purchase Contract Agent shall promptly notify the Company of any
removal of the Collateral Agent, the Custodial Agent or the Securities
Intermediary pursuant to clause (c) of the immediately preceding sentence. Upon
notice of any such resignation or removal, the Company shall have the right to
appoint a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be. If no successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be, shall have been so
appointed and shall have accepted such appointment within 30 days after any
notice of such resignation or such removal, then the retiring Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, may at the
Company's expense petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be. Upon removal of the Collateral Agent,
Custodial Agent or Securities Intermediary, no fees paid to the retiring
Collateral Agent, Custodial Agent or Securities Intermediary pursuant to Section
8.6(a) of this Agreement shall be refunded. Each successor Collateral Agent,
Custodial Agent and the Securities Intermediary 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 or any affiliate of a bank holding company having such capital
and surplus. Upon the acceptance of any appointment as Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, hereunder by a
successor Collateral Agent, Custodial Agent or Securities Intermediary, 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,
Custodial Agent or Securities Intermediary, as the case may be, and the retiring
Collateral Agent, Custodial Agent or Securities Intermediary, as the case may
be, upon payment of any of its unpaid fees and expenses, 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,
Custodial Agent or Securities Intermediary shall, upon such succession, be
discharged from its duties and obligations as Collateral Agent, Custodial Agent
or Securities Intermediary hereunder. After any retiring Collateral Agent's,
Custodial Agent's or Securities Intermediary's resignation hereunder as
Collateral Agent, Custodial Agent or Securities Intermediary, the provisions of
this Section 8.8, and Section 8.6 hereof, shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Collateral Agent, Custodial Agent or Securities Intermediary.
Any resignation or removal of the Collateral Agent hereunder shall be deemed for
all purposes of this Agreement as the simultaneous resignation or removal of the
Custodial Agent and the Securities Intermediary hereunder.
22
So long as it meets the requirements of this Section 8.8, any
corporation into which the Collateral Agent, the Custodial Agent or the
Securities Intermediary, in its individual capacity, may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Collateral Agent in its
individual capacity shall be a party, or any corporation to which substantially
all the corporate trust business of the Collateral Agent in its individual
capacity may be transferred, shall be the Collateral Agent, the Custodial Agent,
or the Securities Intermediary, as the case may be, respectively, under this
Agreement without further act.
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 reasonably selected in good faith. The appointment of agents (other
than legal counsel) pursuant to this Section 8.9 shall be subject to prior
written consent of the Company.
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, the Custodial Agent or the Securities Intermediary.
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 or loss of business, relating to, arising from or in connection with
this Agreement, 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 negligence, bad faith or willful misconduct on the part of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.
In no event shall the any of the Collateral Agent, the Custodial
Agent or the Securities Intermediary be liable for any failure or delay in the
performance of its obligations hereunder because of circumstances beyond its
control, including, but not limited to, acts of God, flood, war (whether
declared or undeclared), terrorism, fire, riot, embargo, government action,
including any laws, ordinances, regulations, governmental action or the like
which delay, restrict or prohibit the providing of services contemplated by this
Agreement.
SECTION 8.12 LIMITATION ON DUTY OF THE COLLATERAL AGENT, THE
CUSTODIAL AGENT, THE SECURITIES INTERMEDIARY AND THE PURCHASE CONTRACT AGENT IN
RESPECT OF COLLATERAL; INDEMNIFICATION. (a) Beyond the exercise of reasonable
care in the custody thereof and as expressly set forth in this Agreement or in
the Code, each of the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent shall have no duty as to any
Collateral in its possession or control or in the possession or control of any
agent or bailee or any income thereon or as to preservation of rights against
prior parties or any other rights pertaining thereto and each of the Collateral
Agent, the Custodial Agent, the Securities Intermediary and, except for the
responsibilities expressly set forth in this Agreement or under the Code, the
23
Purchase Contract Agent shall not be responsible for filing any financing or
continuation statements or recording any documents or instruments in any public
office at any time or times or otherwise perfecting or maintaining the
perfection of any security interest in the Collateral. Each of the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent shall be deemed to have exercised reasonable care in the custody
of the Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which it accords its own property and shall not be
liable or responsible for any loss or diminution in the value of any of the
Collateral, by reason of the act or omission of any carrier, forwarding agency
or other agent or bailee selected by each of the Collateral Agent, the Custodial
Agent, the Securities Intermediary and the Purchase Contract Agent in good
faith.
(b) Each of the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall not be responsible
for the existence, genuineness or value of any of the Collateral or for the
validity, perfection, priority or enforceability of the Liens in any of the
Collateral, whether impaired by operation of law or by reason of any of any
action or omission to act on its part hereunder, except to the extent such
action or omission constitutes negligence, bad faith or willful misconduct on
the part of each of the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent, for the validity or sufficiency of
the Collateral or any agreement or assignment contained therein, for the
validity of the title of the Company to the Collateral, for insuring the
Collateral or for the payment of taxes, charges, assessments or Liens upon the
Collateral or otherwise as to the maintenance of the Collateral.
(c) Each of the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall have no duty to
act outside of the United States in respect of any Collateral located in the
jurisdiction other than the United States.
ARTICLE IX
AMENDMENT
---------
SECTION 9.1 AMENDMENT WITHOUT CONSENT OF HOLDERS. Without the
consent of any Holders or the holders of any Separate Notes, 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:
(i) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of the
Company; or
(ii) to add 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
24
(iii) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Custodial Agent, Securities
Intermediary or Purchase Contract Agent; or
(iv) 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, the
Purchase Contract Agent, the Collateral Agent, the Custodial Agent and the
Securities Intermediary may amend this Agreement for the purpose of modifying in
any manner the provisions of this Agreement or the rights of the Holders in
respect of the Units; provided that no such amendment shall, as to any Holder of
an Outstanding Unit adversely affected thereby, without the consent of such
Holder,
(i) change the amount or type of Collateral underlying a Unit
(except for the rights of holders of Normal Units to substitute the
Treasury Securities for the Pledged Notes or the Pledged Treasury
Consideration, as the case may be, or the rights of Holders of Stripped
Units to substitute Notes or the Treasury Consideration, as applicable,
for the Pledged Treasury Securities), impair the right of the Holder of
any Unit to receive distributions on the underlying Collateral or
otherwise adversely affect the Holder's rights in or to such Collateral;
or
(ii) otherwise effect any action that would require the consent
of the Holder of each Outstanding Unit affected thereby pursuant to the
Purchase Contract Agreement if such action were effected by an agreement
supplemental thereto; or
(iii) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment;
provided that if any amendment or proposal referred to above would adversely
affect only the Normal Units or the Stripped Units, then only the affected class
of Holders as of the record date for the Holders entitled to vote thereon will
be entitled to vote on or consent to such amendment or proposal.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
SECTION 9.3 EXECUTION OF AMENDMENTS. In executing any amendment
permitted by this Article IX, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be provided with
and (subject to Section 8.1 hereof, with respect to the Collateral Agent, and
Section 7.1 of the Purchase Contract Agreement, with respect to the Purchase
Contract Agent) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such
25
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 and, in the case of an amendment pursuant to Section 9.1, that such
amendment does not adversely affect the validity, perfection or priority of the
security interests granted or created hereunder.
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. Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Article IX may, and shall if required by the
Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Certificates so modified as to conform, in the opinion of the Collateral Agent,
the Purchase Contract Agent and the Company, to any such amendment may be
prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in accordance with the
Purchase Contract Agreement in exchange for outstanding Certificates.
ARTICLE X
MISCELLANEOUS
-------------
SECTION 10.1 NO WAIVER. No failure on the part of any party hereto
or any of its agents to exercise, and no course of dealing with respect to, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by any party hereto or
any of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
SECTION 10.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without
limiting the foregoing, the above choice of law is expressly agreed to by the
Securities Intermediary, the Collateral Agent, the Custodial 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, which law, for purposes of the Code, shall be deemed to be
the law governing all Security Entitlements related thereto. In addition, such
parties agree that, for purposes of the Code, New York shall be the Securities
Intermediary's jurisdiction. The Company, the Collateral Agent
26
and the Holders from time to time of the Units, 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 the Borough of Manhattan in
New York City for the purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. The Company,
the Collateral Agent and the Holders from time to time of the Units, 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 hereby designates
and appoints CT Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
as its authorized agent upon which process may be served in any legal suit,
action or proceeding arising out of or relating to this Agreement which may be
instituted in any federal or state court in the Borough of Manhattan, The City
of New York, New York, and agrees that service of process upon such agent, and
written notice of said service to the Company by the Person serving the same,
shall be deemed in every respect effective service of process upon the Company
in any such suit, action or proceeding and further designates its domicile, the
domicile of CT Corporation System specified above and any domicile CT
Corporation System may have in the future as its domicile to receive any notice
hereunder (including service of process). If for any reason CT Corporation
System (or any successor agent for this purpose) shall cease to act as agent for
service of process as provided above, the Company will promptly appoint a
successor agent for this purpose reasonably acceptable to the Collateral Agent,
the Custodial Agent, the Securities Intermediary and the Purchase Contract
Agent. The Company agrees to take any and all actions as may be necessary to
maintain such designation and appointment of such agent in full force and
effect.
SECTION 10.3 JUDGMENT CURRENCY. The Company agrees, to the fullest
extent that it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the sum
due (the "Required Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Purchase Contract
Agent could purchase in The City of New York the requisite amount of the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which a final unappealable judgment is given and (b) its
obligations under this Agreement to make payments in the Required Currency (i)
shall not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment (whether or not entered in accordance with clause (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Agreement. For purpose of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or obligated by law, regulation or executive
order to be closed.
SECTION 10.4 NOTICES. Unless otherwise stated herein, all notices,
requests, instructions, 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) and, if sent to the Company, will be mailed, delivered
or telecopied to XX Xxxxx, Xxx Xxxxxxxxxx Xxxx, Xxxxxxxx XX00, Xxxxxxx,
Xxxxxxxxx: Xxxx X. Xxxxxxxx (fax no.: (000) 000-0000); or if sent to the
Purchase
27
Contract Agent as attorney-in-fact of the Holders from time to time of the
Units, will be mailed, delivered or telefaxed to 000 Xxxxxxx Xxxxxx, Xxxxx 0X,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust Administration (fax no.:
(000) 000-0000); or if sent to the Collateral Agent, Custodial Agent and
Securities Intermediary, will be mailed, delivered or telefaxed to 000 Xxxxxxx
Xxxxxx, Xxxxx 0X, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust
Administration (fax no.: (000) 000-0000), 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 personally delivered or, in the case of a
mailed notice or notice transmitted by telecopier, upon receipt, in each case
given or addressed as aforesaid.
SECTION 10.5 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 Units, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.
SECTION 10.6 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 10.7 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 10.8 EXPENSES, ETC. The Company agrees to reimburse the
Collateral Agent, the Securities Intermediary and the Custodial Agent for:
(a) all reasonable out-of-pocket costs and all reasonable
expenses of the Collateral Agent, the Custodial Agent and the Securities
Intermediary (including, without limitation, the reasonable fees and expenses of
one counsel to the Collateral Agent, the Custodial Agent and the Securities
Intermediary), in connection with (i) the negotiation, preparation, execution
and delivery or performance of this Agreement and (ii) any modification,
supplement or waiver of any of the terms of this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent,
the Custodial Agent and the Securities Intermediary (including, without
limitation, reasonable fees and expenses of one counsel) in connection with (i)
any enforcement or proceedings resulting or incurred in connection with causing
any Holder of Units to satisfy its obligations under the Purchase Contracts
forming a part of the Units 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
28
other document referred to herein and all costs, expenses, taxes, assessments
and other charges, if any, incurred in connection with any filing, registration,
recording or perfection of any security interest to the extent contemplated
hereby.
SECTION 10.9 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 Units or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or
any other term of, or any increase in the amount of, all or any of the
obligations of Holders of Units under the related Purchase Contracts, or any
other amendment or waiver of any term of, or any consent to any departure from
any requirement of, the Purchase Contract Agreement or any Purchase Contract or
any other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a pledgor.
SECTION 10.10 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 10.11 INCORPORATION BY REFERENCE. Each of the Company, the
Collateral Agent and the Securities Intermediary agrees that the Purchase
Contract Agent is, in acting hereunder with respect to the Company, entitled to
all rights, privileges, benefits, protections, immunities and indemnities
provided to it under the Purchase Contract Agreement.
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
XL CAPITAL LTD
By: /s/ Xxxxxxx Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxx Xxxxx
Title: Senior Vice President, Chief
Corporate Legal Officer and
Secretary
THE BANK OF NEW YORK,
as Purchase Contract Agent and
as attorney-in-fact of the Holders
from time to time of the Units
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Vice President
THE BANK OF NEW YORK,
as Collateral Agent, Custodial
Agent and Securities Intermediary
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Vice President
2
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: 7.00% EQUITY SECURITY UNITS
OF XL CAPITAL LTD (THE "COMPANY")
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of December 9, 2005 (the "Pledge Agreement"), among
the Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Normal Units] [Stripped Units] from time to time, that the
holder of Units listed below (the "Holder") has elected to substitute [$________
aggregate principal amount of Treasury Securities (CUSIP No. 912820 JW 8)]
[$________ aggregate principal amount of Notes or $__________ aggregate
principal amount of Treasury Consideration (CUSIP No. [________]) in exchange
for the related [Pledged Notes or Pledged Treasury Consideration] [Pledged
Treasury Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Notes or the Treasury Consideration] to you, as Collateral Agent.
We hereby instruct you, upon receipt of such [Pledged Treasury Securities]
[Pledged Notes or Pledged Treasury Consideration], to release the [Notes or the
Treasury Consideration] [Treasury Securities] related to such [Normal Units]
[Stripped Units] to us in accordance with the Holder's instructions. Capitalized
terms used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Date: _____________________
The Bank of New York,
as Purchase Contract Agent
By: ___________________________________
Name:
Title:
A-1
Please print name and address of Registered Holder electing to
substitute [Treasury Securities] [Notes or Treasury Consideration] for the
[Pledged Notes or the Pledged Treasury Consideration] [Pledged Treasury
Securities]:
Name: ______________________________
Social Security or other Taxpayer
Identification Number, if any: ___________________
Address: __________________________________________________________
A-2
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York,
as Purchase Contract Agent
000 Xxxxxxx Xxxxxx
Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Re: 7.00% EQUITY SECURITY UNITS
OF XL CAPITAL LTD (THE "COMPANY")
The undersigned Holder hereby notifies you that it has delivered
to The Bank of New York, as Collateral Agent, [$_________ aggregate principal
amount of Treasury Securities (CUSIP No. 912820 JW 8)] [$_________ aggregate
principal amount of Notes or $___________ principal amount of Treasury
Consideration (CUSIP No. [__________]) in exchange for the related [Pledged
Notes or Pledged Treasury Consideration] [Pledged Treasury Securities] held by
the Collateral Agent, in accordance with Section [4.1][4.2] of the Pledge
Agreement, dated as of December 9, 2005 (the "Pledge Agreement"), among 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 Notes or the Pledged Treasury Consideration] [Pledged
Treasury Securities] related to such [Normal Units] [Stripped Units].
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date: ___________________
Signature: ______________________________________
Signature Guarantee: _____________________________
Please print name and address of Registered Holder: ________________________
Name: __________________________
Social Security or other Taxpayer
Identification Number, if any: ________________________
Address: ________________________________________________________
B-1
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: 5.25% NOTES DUE 2011 OF XL CAPITAL LTD
The undersigned hereby notifies you in accordance with Section
4.5(d) of the Pledge Agreement, dated as of December 9, 2005 (the "Pledge
Agreement"), among XL Capital Ltd, yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent, and The Bank of New York, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Normal Units and Stripped Units
from time to time, that the undersigned elects to deliver on the fourth Business
Day immediately preceding the Remarketing Date commencing on February _, 2009
$__________ aggregate principal amount of Notes for delivery to the Remarketing
Agent for remarketing pursuant to Section 4.5(d) 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
Notes tendered hereby.
The undersigned hereby instructs you, upon receipt of the proceeds
of such remarketing from the Remarketing Agent, net of amounts payable to the
Remarketing Agent in accordance with the Pledge Agreement, 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 the Last Failed Remarketing upon receipt of the Notes tendered herewith
from the Remarketing Agent, to deliver such Notes to the person(s) and the
address(es) indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and
warrants that the undersigned has full power and authority to tender, sell,
assign and transfer the Notes tendered hereby and that the undersigned is the
record owner of any Notes tendered herewith in physical form or a participant in
The Depository Trust Company ("DTC") and the beneficial owner of any Notes
tendered herewith by book-entry transfer to your account at DTC and (ii) agrees
to be bound by the terms and conditions of Section 4.5(d) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
C-1
Date: _________________
Signature: ______________________________
Signature Guarantee: ______________________
Name: __________________________________
(Please Print)
Address: __________________________________
(Please Print)
Zip Code: __________________________________
Country: ______________________________________
Telecopy (include country code if outside U.S.): __________________________
Telephone (include country code if outside U.S.): ______________________________
(Tax Identification or Social Security Number): _______________________________
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: __________________________________
Country: __________________________________
Telecopy (include country code if outside U.S.): _____________________________
Telephone (include country code if outside U.S.): ____________________________
(Special Identification or Social Security Number): ___________________________
B. DELIVERY INSTRUCTIONS
In the event of the Last Failed Remarketing, Notes which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.
C-2
Name(s): __________________________________
(Please Print)
Address: __________________________________
(Please Print)
Zip Code: _________________________________
Country: __________________________________
Telecopy (include country code if outside U.S.): ______________________________
Telephone (include country code if outside U.S.): _____________________________
(Special Identification or Social Security Number): ___________________________
In the event of [a/the Last] Failed Remarketing, Notes which are in book-entry
form should be credited to the account at The Depository Trust Company set forth
below.
Name of Account Party: __________________________
DTC Account Number: _____________________________
C-3
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: 5.25% NOTES DUE 2011 OF XL CAPITAL LTD
The undersigned hereby notifies you in accordance with Section
4.5(d) of Pledge Agreement, dated as of December 9, 2005 (the "Pledge
Agreement"), among XL Capital Ltd, yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent, and The Bank of New York, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Normal Units and Stripped Units
from time to time, that the undersigned elects to withdraw the $__________
aggregate principal amount of Notes delivered to the Custodial Agent on
_________, 2009 for remarketing pursuant to Section 4.5(d) of the Pledge
Agreement. The undersigned hereby instructs you to return such Notes to the
undersigned in accordance with the undersigned's instructions. With this notice,
undersigned hereby agrees to be bound by the terms and conditions 4.5(d) of the
Pledge Agreement. Capitalized terms used herein but shall have the meaning set
forth in the Pledge Agreement.
Date: _________________
Signature: ________________________________
Signature Guarantee: ______________________
Name: _____________________________________
(Please Print)
Address: __________________________________
(Please Print)
Zip Code: _________________________________
Country: __________________________________
Telecopy (include country code if outside U.S.): ______________________________
Telephone (include country code if outside U.S.): _____________________________
D-1
(Tax Identification or Social Security Number): _______________________________
A. DELIVERY INSTRUCTIONS
In the event of [a/the Last] Failed Remarketing, Notes which are in physical
form should be delivered to the person(s) set forth below and mailed to the
address set forth below.
Name(s): __________________________________
(Please Print)
Address: __________________________________
(Please Print)
Zip Code: _________________________________
Country: __________________________________
Telecopy (include country code if outside U.S.): ______________________________
Telephone (include country code if outside U.S.): _____________________________
(Special Identification or Social Security Number): ___________________________
In the event of [a/the Last] Failed Remarketing, Notes which are in book-entry
form should be credited to the account at The Depository Trust Company set forth
below.
Name of Account Party: __________________________
DTC Account Number: _____________________________
D-2
