INGERSOLL-RAND COMPANY,
THE CHASE MANHATTAN BANK,
as Collateral Agent, Custodial Agent
and Securities Intermediary
AND
THE BANK OF NEW YORK,
as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of March 23, 1998
TABLE OF CONTENTS
Page
RECITALS 1
Section 1. Definitions 3
Section 2. Pledge; Control and Perfection 8
Section 2.1. The Pledge 8
Section 2.2. Control and Perfectio 10
Section 3. Distributions on Pledged Collateral 12
Section 4. Substitution, Release, Repledge and
Settlement of Capital Securities 14
Section 4.1. Substitution for Capital
Securities and the Creation
of Growth PRIDES 14
Section 4.2. Substitution of Treasury
Securities and the Creation
of Income PRIDES 15
Section 4.3. Termination Event 16
Section 4.4. Cash Settlement 17
Section 4.5. Early Settlement 19
Section 4.6. Application of Proceeds
Settlement 19
Section 5. Voting Rights -- Capital Securities 22
Section 6. Rights and Remedies; Distribution
of the Debentures; Tax Event
Redemption 23
Section 6.1. Rights and Remedies of the
Collateral Agent 23
Section 6.2. Distribution of the Debentures;
Tax Event Redemption 25
Section 6.3. Substitutions 26
Section 7. Representations and Warranties;
Covenants 26
Section 7.1. Representations and Warranties 26
Section 7.2. Covenants 27
Section 8. The Collateral Agent 28
Section 8.1. Appointment, Powers and
Immunities 28
Section 8.2. Instructions of the Company 29
Section 8.3. Reliance by Collateral Agent 30
Section 8.4. Rights in Other Capacities 30
Section 8.5. Non-Reliance on Collateral Agent 31
Section 8.6. Compensation and Indemnity 31
Section 8.7. Failure to Act 31
Section 8.8. Resignation of Collateral
Agent 32
Section 8.9. Right to Appoint Agent or
Advisor 34
Section 8.10. Survival 34
Section 8.11. Exculpation 34
Section 9. Amendment 34
Section 9.1. Amendment Without Consent
of Holders 34
Section 9.2. Amendment with Consent of
Holders 35
Section 9.3. Execution of Amendments 36
Section 9.4. Effect of Amendments 36
Section 9.5. Reference to Amendments 36
Section 10. Miscellaneous 37
Section 10.1. No Waiver 37
Section 10.2. Governing Law 37
Section 10.3. Notices 38
Section 10.4. Successors and Assigns 38
Section 10.5. Counterparts 38
Section 10.6. Severability 38
Section 10.7. Expenses, etc. 39
Section 10.8. Security Interest Absolute 39
EXHIBIT A INSTRUCTION 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
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of March 23, 1998 (this
"Agreement"), among Ingersoll-Rand Company, a New Jersey
corporation (the "Company"), The Chase Manhattan Bank, a New York
banking corporation, not individually but solely as collateral
agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent") as custodial agent (in such
capacity, together with its successors in such capacity, the
"Custodial Agent") and in its capacity as a "securities
intermediary" as defined in Section 8-102(a)(14) of the Code (as
defined herein) (in such capacity, together with its successors
in such capacity, the "Securities Intermediary"), and The Bank of
New York, not individually but solely as purchase contract agent
and as attorney-in-fact of the Holders (as defined in the
Purchase Contract Agreement) from time to time of the Securities
(as hereinafter defined) (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under
the Purchase Contract Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to
the Purchase Contract Agreement, dated as of the date hereof (as
modified and supplemented and in effect from time to time, the
"Purchase Contract Agreement"), pursuant to which there may be
issued up to 16,100,000 FELINE PRIDES of the Company, having a
stated amount of $25 (the "Stated Amount") per FELINE PRIDES.
The FELINE PRIDES will initially consist of (A) 14,490,000
units (referred to as "Income PRIDES") with a face amount, per
Income PRIDES, equal to the Stated Amount and (B)1,610,000 units
(referred to as "Growth PRIDES" and, together with the Income
PRIDES, the "Securities") with a face amount, per Growth PRIDES,
equal to the Stated Amount. Each Income PRIDES will initially be
comprised of (a) a stock purchase contract (a "Purchase
Contract") under which (i) the holder will purchase from the
Company on May 16, 2001 (the "Purchase Contract Settlement
Date"), for an amount of cash equal to the Stated Amount, a
number of newly issued shares of common stock, $2.00 par value
per share (the "Common Stock"), of the Company equal to the
Settlement Rate (as defined below) and (ii) the Company will pay
the Holder Contract Adjustment Payments (as defined below) at the
rate of .53% of the Stated Amount per annum and (b) either bene
ficial ownership of a Capital Security (as defined below) or upon
the occurrence of a Tax Event Redemption the Applicable Ownership
Interest of the Treasury Portfolio. Each Growth PRIDES will
initially be comprised of (a) a Purchase Contract under which (i)
the holder will purchase from the Company on the Purchase
Contract Settlement Date, for an amount in cash equal to the
Stated Amount, a number of newly issued shares of Common Stock of
the Company, equal to the Settlement Rate, and (ii) the Company
will pay the Holder Contract Adjustment Payments, at the rate of
.78% of the Stated Amount per annum, and (b) a 1/40 undivided
beneficial interest in a zero-coupon U.S. Treasury Security
(CUSIP No. 912820BA4) having a principal amount equal to $1,000
and maturing on May 15, 2001 (the "Treasury Securities").
Pursuant to the terms of the Declaration (as defined below),
Ingersoll-Rand Financing I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust") will issue
16,100,000 6.22% Capital Securities (the "Capital Securities")
having a stated liquidation value equal to the Stated Amount.
Pursuant to the terms of the Purchase Contract Agreement and
the Purchase Contracts, the Holders, from time to time, of the
Securities have irrevocably authorized the Purchase Contract
Agent, as attorney-in-fact of such Holders, among other things,
to execute and deliver this Agreement on behalf of such Holders
and to grant the pledge provided hereby of the Capital
Securities, any Applicable Ownership Interest in the Treasury
Portfolio and any Treasury Securities delivered in exchange there
for to secure each Holder's obligations under the related
Purchase Contract, as provided herein and subject to the terms
hereof. Upon such pledge, the Capital Securities will be
beneficially owned by the Holders but will be owned of record by
the Purchase Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the
Securities Intermediary, the Custodial Agent and the Purchase
Contract Agent, on its own behalf and as attorney-in-fact of the
Holders from time to time of the Securities, agree as follows:
Section 1. Definitions. For all purposes of this
Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as
well as the singular;
(b) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other
subdivision;
(c) the following terms have the meanings assigned to
them in the Purchase Contract Agreement: (i) Act, (ii)
Agent, (iii) Board Resolution, (iv) Cash Settlement, (v)
Certificate, (vi) Contract Adjustment Payments, (vii)
Debentures, (viii) Early Settlement, (ix) Early Settlement
Amount, (x) Early Settlement Date, (xi) Failed Remarketing,
(xii) Holder, (xiii) Opinion of Counsel, (xiv) Outstanding
Securities, (xv) Purchase Agreement, (xvi) Purchase
Contract, (xvii) Purchase Contract Settlement Date, (xviii)
Remarketing Agent, (xix) Remarketing Agreement, (xx)
Remarketing Underwriting Agreement, (xxi) Settlement Rate,
and (xxii) Termination Event; and
(d) the following terms have the meanings assigned to
them in the Declaration: (i) Applicable Ownership Interest
(ii) Applicable Principal Amount, (iii) Institutional
Trustee, (iv) Investment Company Event,(v) Primary Treasury
Dealer, (vi) Quotation Agent, (vii) Redemption Amount,
(viii) Redemption Price, (ix) Tax Event, (x) Tax Event
Redemption, (xi) Tax Event Redemption Date, (xii) Treasury
Portfolio, (xiii) Treasury Portfolio Purchase Price.
"Agreement" means this instrument as originally executed or
as it may from time to time be supplemented or amended by one or
more agreements supplemental hereto entered into pursuant to the
applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States Code,
or any other law of the United States that from time to time
provides a uniform system of bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday
or any other day on which banking institutions in The City of New
York (in the State of New York) are permitted or required by any
applicable law to close.
"Capital Securities" has the meaning specified in the
Recitals.
"Cash" means any coin or currency of the United States as at
the time shall be legal tender for payment of public and private
debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1
hereof.
"Collateral Account" means the securities account (number
C27328) maintained at The Chase Manhattan Bank in the name "The
Bank of New York, as Purchase Contract Agent on behalf of the
holders of certain securities of Ingersoll-Rand Financing I,
Collateral Account subject to the security interest of The Chase
Manhattan Bank, as Collateral Agent, for the benefit of Ingersoll-
Rand Company, as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first
paragraph of this instrument.
"Common Stock" has the meaning specified in the Recitals.
"Company" means the Person named as the "Company" in the
first paragraph of this instrument until a successor shall have
become such, and thereafter "Company" shall mean such successor.
"Custodial Agent" has the meaning specified in the Recitals.
"Debenture Trustee" means The Bank of New York, as trustee
under the Indenture until a successor is appointed thereunder,
and thereafter means such successor trustee.
"Declaration" means the Amended and Restated Declaration of
Trust, dated as of March 23, 1998, among the Company as sponsor,
the trustees named therein and the holders from time to time of
undivided beneficial interests in the assets of the Trust.
"Intermediary" means any entity that in the ordinary course
of its business maintains securities accounts for others and is
acting in that capacity.
"Permitted Investments" means any one of the following which
shall mature not later than the next succeeding Business Day (i)
any evidence of indebtedness with an original maturity of 365
days or less issued, or directly and fully guaranteed or insured,
by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof or such indebt
edness constitutes a general obligation of it); (ii) deposits,
certificates of deposit or acceptances with an original maturity
of 365 days or less of any institution which is a member of the
Federal Reserve System having combined capital and surplus and
undivided profits of not less than US$ 200.0 million at the time
of deposit; (iii) investments with an original maturity of 365
days or less of any Person that is fully and unconditionally
guaranteed by a bank referred to in clause (ii); (iv) investments
in commercial paper, other than commercial paper issued by the
Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which
commercial paper has a rating at the time of purchase at least
equal to "A-1" by Standard & Poor's Ratings Services ("S&P") or
at least equal to "P-1" by Moody's Investors Service, Inc.
("Moody's"); and (v) investments in money market funds registered
under the Investment Company Act of 1940, as amended, rated in
the highest applicable rating category by S&P or Moody's.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Capital Securities" has the meaning specified in
Section 2.1 hereof.
"Pledged Treasury Securities" has the meaning specified in
Section 2.1 hereof.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in 8-102(a)(9) of the
Code) and other property from time to time received, receivable
or otherwise distributed upon the sale, exchange, collection or
disposition of the Collateral or any proceeds thereof.
"Purchase Contract" has the meaning specified in the
Recitals.
"Purchase Contract Agent" has the meaning specified in the
first paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in
the Recitals.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the
first paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section
8-102(a)(17) of the Code.
"Separate Capital Securities" means any Capital Securities
that are not Pledged Capital Securities.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry
System maintained by the Federal Reserve Bank of New York
pursuant to the TRADES Regulations.
"TRADES Regulations" means the regulations of the United
States Department of the Treasury, published at 31 C.F.R. Part
357, as amended from time to time. Unless otherwise defined
herein, all terms defined in the TRADES Regulations are used
herein as therein defined.
"Transfer" means, with respect to the Collateral and in
accordance with the instructions of the Collateral Agent, the
Purchase Contract Agent or the Holder, as applicable:
(i) in the case of Collateral consisting of securities
which cannot be delivered by book-entry or which the
parties agree are to be delivered in physical form,
delivery in appropriate physical form to the
recipient accompanied by any duly executed
instruments of transfer, assignments in blank,
transfer tax stamps and any other documents necessary
to constitute a legally valid transfer to the
recipient;
(ii) in the case of Collateral consisting of securities
maintained in book-entry form by causing a
"securities intermediary" (as defined in Section
8-102(a)(14) of the Code) to (i) credit a "security
entitlement" (as defined in Section 8-102(a)(17) of
the Code) with respect to such securities to a
"securities account" (as defined in Section 8-501(a)
of the Code) maintained by or on behalf of the
recipient and (ii) to issue a confirmation to the
recipient with respect to such credit. In the case
of Collateral to be delivered to the Collateral
Agent, the Securities Intermediary shall be the
Securities Intermediary and the securities account
shall be the Collateral Account.
"Treasury Security" means a zero-coupon U.S. Treasury
Security (Cusip Number 912820 BA 4) which are the principal
strips of the U.S. Treasury Securities which mature on May 15,
2001.
"Trust" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date
means, as to (i) a Capital Security, the Stated Amount, (ii)
Cash, the face amount thereof and (iii) Treasury Securities, the
aggregate principal amount thereof at maturity.
Section 2. Pledge; Control and Perfection.
Section 2.1. The Pledge. 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
performance when due by such Holders of their respective
obligations under the related Purchase Contracts, a security
interest in (i) all of the right, title and interest of such
Holders (a) in the Capital Securities and Treasury Securities
constituting a part of the Securities and any Treasury Securities
delivered in exchange for any Capital Securities, and any Capital
Securities delivered in exchange for any Treasury Securities, in
accordance with Section 4 hereof, in each case that have been
Transferred to or received by the Collateral Agent and not
released by the Collateral Agent to such Holders under the
provisions of this Agreement; (b) in payments made by Holders
pursuant to Section 4.4; (c) in the Collateral Account and all
securities, financial assets, Cash and other property credited
thereto and all Security Entitlements related thereto; (d) in any
Debentures delivered to the Collateral Agent upon the occurrence
of an Investment Company Event or a liquidation of the Trust as
provided in Section 6.2; (e) in the Treasury Portfolio purchased
on behalf of the Holders of Income PRIDES by the Collateral Agent
upon the occurrence of a Tax Event Redemption as provided in
Section 6.2 and (f) all Proceeds of the foregoing (all of the
foregoing, collectively, the "Collateral"). Prior to or concur
rently with the execution and delivery of this Agreement, the
Purchase Contract Agent, on behalf of the initial Holders of the
Securities, shall cause the Capital Securities comprising a part
of the Income PRIDES, and the Treasury Securities comprising a
part of the Growth PRIDES, to be Transferred to the Collateral
Agent for the benefit of the Company. Such Capital Securities
shall be Transferred by physically delivering such Securities to
the Securities Intermediary endorsed in blank and causing the
Securities Intermediary to credit the Collateral Account with
such Securities and sending the Collateral Agent a confirmation
of the deposit of such Securities. In the event a Holder of
Income PRIDES so elects, such Holder may Transfer Treasury
Securities to the Collateral Agent for the benefit of the Company
in exchange for the release by the Collateral Agent on behalf of
the Company of Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
with an aggregate stated liquidation amount equal to the
aggregate principal amount of the Treasury Securities so
Transferred, in the case of Capital Securities, or with an
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio
equal to the aggregate principal amount of the Treasury
Securities so transferred, in the event that a Tax Event
Redemption has occurred, to the Purchase Contract Agent on behalf
of such Holder. Treasury Securities and the Treasury Portfolio,
as applicable, shall be Transferred to the Collateral Account
maintained by the Collateral Agent at the Securities Intermediary
by book-entry transfer to the Collateral Account in accordance
with the TRADES Regulations and other applicable law and by the
notation by the Securities Intermediary on its books that a
Security Entitlement with respect to such Treasury Securities or
Treasury Portfolio, has been credited to the Collateral Account.
For purposes of perfecting the Pledge under applicable law,
including, to the extent applicable, the TRADES Regulations or
the Uniform Commercial Code as adopted and in effect in any
applicable jurisdiction, the Collateral Agent shall be the agent
of the Company as provided herein. The pledge provided in this
Section 2.1 is herein referred to as the "Pledge" and the Capital
Securities (or the Debentures that are delivered pursuant to
Section 6.2 hereof) or Treasury Securities subject to the Pledge,
excluding any Capital Securities (or the Debentures that are
delivered pursuant to Section 6.2 hereof) or Treasury Securities
released from the Pledge as provided in Section 4 hereof, are
hereinafter referred to as "Pledged Capital Securities" or the
"Pledged Treasury Securities," respectively. Subject to the
Pledge and the provisions of Section 2.2 hereof, the Holders from
time to time shall have full beneficial ownership of the
Collateral. Whenever directed by the Collateral Agent acting on
behalf of the Company, the Securities Intermediary shall have the
right to reregister the Capital Securities or any other
Securities held in physical form in its name.
Except as may be required in order to release Capital
Securities in connection with a Holder's election to convert its
investment from an Income PRIDES to a Growth PRIDES, or except as
otherwise required to release Securities as specified herein,
neither the Collateral Agent nor the Securities Intermediary
shall relinquish physical possession of any certificate
evidencing a Capital Security prior to the termination of this
Agreement. If it becomes necessary for the Securities
Intermediary to relinquish physical possession of a certificate
in order to release a portion of the Capital Securities evidenced
thereby from the Pledge, the Securities Intermediary shall use
its best efforts to obtain physical possession of a replacement
certificate evidencing any Capital Securities remaining subject
to the Pledge hereunder registered to it or endorsed in blank
within fifteen days of the date it relinquished possession. The
Securities Intermediary shall promptly notify the Company and the
Collateral Agent of the Securities Intermediary's failure to
obtain possession of any such replacement certificate as required
hereby.
Section 2.2. Control and Perfection. (a) In connection
with the Pledge granted in Section 2.1, and subject to the other
provisions of this Agreement, the Holders from time to time
acting through the Purchase Contract Agent, as their attorney-in-
fact, hereby authorize and direct the Securities Intermediary
(without the necessity of obtaining the further consent of the
Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any
instructions and entitlement orders (as defined in Section 8-
102(a)(8) of the Code) that the Collateral Agent on behalf of the
Company may give in writing with respect to the Collateral
Account, the Collateral credited thereto and any security
entitlements with respect to any thereof. Such instructions and
entitlement orders may, without limitation, direct the Securities
Intermediary to transfer, redeem, sell, liquidate, assign,
deliver or otherwise dispose of the Capital Securities, the
Treasury Securities, the Treasury Portfolio, and any Security
Entitlements with respect thereto and to pay and deliver any
income, proceeds or other funds derived therefrom to the Company.
The Holders from time to time acting through the Purchase
Contract Agent hereby further authorize and direct the Collateral
Agent, as Agent of the Company, to itself issue instructions and
entitlement orders, and to otherwise take action, with respect to
the Collateral Account, the Collateral credited thereto and any
security entitlements with respect thereto, pursuant to the terms
and provisions hereof, all without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the
Holders. The Collateral Agent shall be the Agent of the Company
and shall act as directed in writing by the Company. Without
limiting the generality of the foregoing, the Collateral Agent
shall issue entitlement orders to the Securities Intermediary
when and as directed by the Company.
(b) The Securities Intermediary hereby confirms and agrees
that: (i) all securities or other property underlying any
financial assets credited to the Collateral Account shall be
registered in the name of the Securities Intermediary, indorsed
to the Securities Intermediary or in blank or credited to another
Collateral Account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to
the Collateral Account be registered in the name of the Purchase
Contract Agent, the Collateral Agent, the Company or any Holder,
payable to the order of, or specially indorsed to, the Purchase
Contract Agent, the Collateral Agent, the Company or any Holder
except to the extent the foregoing have been specially indorsed
to the Securities Intermediary or in blank; (ii) all property
delivered to the Securities Intermediary pursuant to this Pledge
Agreement (including, without limitation, any Capital Securities,
the Treasury Portfolio or Treasury Securities) will be promptly
credited to the Collateral Account; (iii) the Collateral Account
is an account to which financial assets are or may be credited,
and the Securities Intermediary shall, subject to the terms of
this Agreement, treat the Purchase Contract Agent as entitled to
exercise the rights of any financial asset credited to the
Collateral Account; (iv) the Securities Intermediary has not
entered into, and until the termination of the this Agreement
will not enter into, any agreement with any other person relating
the Collateral Account and/or any financial assets credited
thereto pursuant to which it has agreed to comply with entitle
ment 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 debtor or the secured
party purporting to limit or condition the obligation of the
Securities Intermediary to comply with entitlement orders as set
forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each
item of property (whether investment property, financial asset,
security, instrument or cash) credited to the Collateral Account
shall be treated as a "financial asset" within the meaning of
Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or
any portion thereof) and any other agreement now existing or
hereafter entered into, the terms of this Agreement shall
prevail.
Section 3. Distributions on Pledged Collateral. So long
as the Purchase Contract Agent is the registered owner of the
Pledged Capital Securities, it shall receive all payments
thereon. If the Pledged Capital Securities are reregistered,
such that the Collateral Agent becomes the registered holder, all
payments of the Stated Amount or, if applicable, the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, or cash
distributions on, the Pledged Capital Securities or on the appro
priate Applicable Ownership Interest (as specified in clause (B)
of the definition of such term) of the Treasury Portfolio, as the
case may be, and all payments of the principal of, or cash
distributions on, any Pledged Treasury Securities received by the
Collateral Agent that are properly payable hereunder shall be
paid by the Collateral Agent by wire transfer in same day funds:
(i) In the case of (A) cash distributions with respect
to the Pledged Capital Securities or the appropriate
Applicable Ownership Interest (as specified in clause (B) of
the definition of such term) of the Treasury Portfolio, as
the case may be, and (B) any payments of the Stated Amount
or, if applicable, the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio with respect to any
Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, that
have been released from the Pledge pursuant to Section 4.3
hereof, to the Purchase Contract Agent, for the benefit of
the relevant Holders of Securities, to the account
designated by the Purchase Contract Agent for such purpose,
no later than 2:00 p.m., New York City time, on the Business
Day such payment is received by the Collateral Agent
(provided that in the event such payment is received by the
Collateral Agent on a day that is not a Business Day or
after 12:30 p.m., New York City time, on a Business Day,
then such payment shall be made no later than 10:30 a.m.,
New York City time, on the next succeeding Business Day);
(ii) In the case of any principal payments with
respect to any Treasury Securities that have been released
from the Pledge pursuant to Section 4.3 hereof, to the
Holders of the Growth PRIDES to the accounts designated by
them in writing for such purpose no later than 2:00 p.m.,
New York City time, on the Business Day such payment is
received by the Collateral Agent (provided that in the event
such payment is received by the Collateral Agent on a day
that is not a Business Day or after 12:30 p.m., New York
City time, on a Business Day, then such payment shall be
made no later than 10:30 a.m., New York City time, on the
next succeeding Business Day); and
(iii) In the case of payments of the Stated Amount of
any Pledged Capital Securities or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the
case may be, or the principal of any Pledged Treasury
Securities, to the Company on the Purchase Contract
Settlement Date in accordance with the procedure set forth
in Section 4.6(a) or 4.6(b) hereof, in full satisfaction of
the respective obligations of the Holders under the related
Purchase Contracts.
All payments received by the Purchase Contract Agent as provided
herein shall be applied by the Purchase Contract Agent pursuant
to the provisions of the Purchase Contract Agreement. If,
notwithstanding the foregoing, the Purchase Contract Agent shall
receive any payments of the Stated Amount or, if applicable, the
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) on account of any Capital
Security or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as applicable that, at the time of such
payment, is a Pledged Capital Security or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, or a Holder of a Growth PRIDES shall receive any
payments of principal on account of any Treasury Securities that,
at the time of such payment, are Pledged Treasury Securities, the
Purchase Contract Agent or such Holder shall hold the same as
trustee of an express trust for the benefit of the Company (and
promptly deliver the same over to the Company) for application to
the obligations of the Holders under the related Purchase
Contracts, and the Holders shall acquire no right, title or
interest in any such payments of Stated Amount or principal so
received.
Section 4. Substitution, Release, Repledge and Settlement
of Capital Securities.
Section 4.1. Substitution for Capital Securities and the
Creation of Growth PRIDES. At any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract
Settlement Date (unless a Tax Event Redemption has occurred), a
Holder of Income PRIDES shall have the right to substitute
Treasury Securities for the Pledged Capital Securities securing
such Holder's obligations under the Purchase Contract(s)
comprising a part of its Income PRIDES in integral multiples of
40 Income PRIDES by (a) Transferring to the Collateral Agent Trea
sury Securities having a Value equal to the Stated Amount of the
Pledged Capital Securities to be released and (b)(i) in the event
that Contract Adjustment Payments are at a higher rate for Growth
PRIDES than for Income PRIDES, delivering to the Purchase
Contract Agent Cash in an amount equal to the excess of the
Contract Adjustment Payments that would have accrued since the
last Payment Date through the date of substitution on the Growth
PRIDES being created by the Holder, over the Contract Adjustment
Payments that have accrued over the same time period on the
related Income PRIDES, which amount the Purchase Contract Agent
shall promptly remit to the Company, and (ii) delivering the
related Income PRIDES to the Purchase Contract Agent, accompanied
by a notice, substantially in the form of Exhibit B hereto, to
the Purchase Contract Agent stating that such Holder has
Transferred Treasury Securities to the Collateral Agent pursuant
to clause (a) above (stating the Value of the Treasury Securities
Transferred by such Holder) and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release from the
Pledge the Pledged Capital Securities related to such Income
PRIDES. The Purchase Contract Agent shall instruct the
Collateral Agent in the form provided in Exhibit A; provided, how
ever, that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Income PRIDES,
Holders of Income PRIDES may make such substitution only in
integral multiples of 1,600,000 Income PRIDES at any time on or
prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date. Upon receipt of Treasury
Securities from a Holder of Income PRIDES and the related
instruction from the Purchase Contract Agent, the Collateral
Agent shall release the Pledged Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, and shall promptly Transfer such
Pledged Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
free and clear of any lien, pledge or security interest created
hereby, to the Purchase Contract Agent.
Section 4.2. Substitution of Treasury Securities and the
Creation of Income PRIDES. At any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract
Settlement Date (unless a Tax Event Redemption has occurred), a
Holder of Growth PRIDES shall have the right to establish or
reestablish Income PRIDES consisting of the Purchase Contracts
and Capital Securities in integral multiples of 40 Income PRIDES
by (a) Transferring to the Collateral Agent Capital Securities
having a Value equal to the Value of the Pledged Treasury
Securities to be released and (b) delivering the related Growth
PRIDES to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of Exhibit B hereto, to the Purchase
Contract Agent stating that such Holder has transferred Capital
Securities to the Collateral Agent pursuant to clause (a) above
and requesting that the Purchase Contract Agent instruct the
Collateral Agent to release from the Pledge the Pledged Treasury
Securities related to such Growth PRIDES. The Purchase Contract
Agent shall instruct the Collateral Agent in the form provided in
Exhibit A; provided, however, that if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the
Income PRIDES, Holders of Growth PRIDES may make such
substitution only in integral multiples of 1,600,000 Growth
PRIDES, at any time on or prior to the Business Day immediately
preceding the Purchase Contract Settlement Date. Upon receipt of
the Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, from such
Holder and the instruction from the Purchase Contract Agent, the
Collateral Agent shall release the Treasury Securities and shall
promptly Transfer such Treasury Securities, free and clear of any
lien, pledge or security interest created hereby, to the Purchase
Contract Agent.
Section 4.3. Termination Event. Upon receipt by the
Collateral Agent of written notice from the Company or the
Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from the
Pledge and shall promptly Transfer any Pledged Capital Securities
(or the Applicable Ownership Interest of the Treasury Portfolio
if a Tax Event Redemption has occurred) and Pledged Treasury
Securities to the Purchase Contract Agent for the benefit of the
Holders of the Income PRIDES and the Growth PRIDES, respectively,
free and clear of any lien, pledge or security interest or other
interest created hereby.
If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code, and if the
Collateral Agent shall for any reason fail promptly to effectuate
the release and Transfer of all Pledged Capital Securities, the
Treasury Portfolio or of the Pledged Treasury Securities, as the
case may be, as provided by this Section 4.3, the Purchase
Contract Agent shall (i) use its best efforts to obtain an
opinion of a nationally recognized law firm reasonably acceptable
to the Collateral Agent to the effect that, as a result of the
Company's being the debtor in such a bankruptcy case, the
Collateral Agent will not be prohibited from releasing or
Transferring the Collateral as provided in this Section 4.3, and
shall deliver such opinion to the Collateral Agent within ten
days after the occurrence of such Termination Event, and if (y)
the Purchase Contract Agent shall be unable to obtain such
opinion within ten days after the occurrence of such Termination
Event or (z) the Collateral Agent shall continue, after delivery
of such opinion, to refuse to effectuate the release and Transfer
of all Pledged Capital Securities, the Treasury Portfolio or the
Pledged Treasury Securities, as the case may be, as provided in
this Section 4.3, then the Purchase Contract Agent shall within
fifteen days after the occurrence of such Termination Event
commence an action or proceeding in the court with jurisdiction
of the Company's case under the Bankruptcy Code seeking an order
requiring the Collateral Agent to effectuate the release and
transfer of all Pledged Capital Securities, the Treasury
Portfolio or of the Pledged Treasury Securities, as the case may
be, as provided by this Section 4.3 or (ii) commence an action or
proceeding like that described in subsection (i)(z) hereof within
ten days after the occurrence of such Termination Event.
Section 4.4. Cash Settlement. (a) Upon receipt by the
Collateral Agent of (i) a notice from the Purchase Contract Agent
promptly after the receipt by the Purchase Contract Agent of such
notice that a Holder of an Income PRIDES or Growth PRIDES has
elected, in accordance with the procedures specified in Section
5.4(a)(i) or (d)(i) of the Purchase Contract Agreement,
respectively, to settle its Purchase Contract with Cash and (ii)
payment by such Holder on or prior to 11:00 a.m., New York City
time, on the Business Day immediately preceding the Purchase
Contract Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer in immediately
available funds payable to or upon the order of the Company, then
the Collateral Agent shall, promptly invest any Cash received
from a Holder in connection with a Cash Settlement in Permitted
Investments. Upon receipt of the proceeds upon the maturity of
the Permitted Investments on the Purchase Contract Settlement
Date, the Collateral Agent shall pay the portion of such proceeds
and deliver any certified or cashiers' checks received, in an
aggregate amount equal to the Purchase Price, to the Company on
the Purchase Contract Settlement Date, and shall distribute any
funds in respect of the interest earned from the Permitted Invest
ments to the Purchase Contract Agent for payment to the relevant
Holders.
(b) If a Holder of an Income PRIDES fails to notify the
Agent of its intention to make a Cash Settlement in accordance
with Section 5.4(a)(i) of the Purchase Contract Agreement, such
failure shall constitute an event of default under the Purchase
Contract Agreement and hereunder, and the Holder shall be deemed
to have consented to the disposition of the pledged Capital
Securities pursuant to the remarketing as described in Section
5.4(b) of the Purchase Contract Agreement, which is incorporated
herein by reference. If a Holder of an Income PRIDES does notify
the Agent as provided in Section 5.4(a)(i) of the Purchase
Contract Agreement of its intention to pay the Purchase Price in
cash, but fails to make such payment as required by Section
5.4(a)(ii) of the Purchase Contract Agreement, the Capital
Securities of such a Holder will not be remarketed but instead
the Collateral Agent, for the benefit of the Company, will
exercise its rights as a secured party with respect to such
Capital Securities at the direction of the Company to retain or
dispose of the Collateral in accordance with applicable law. In
addition, in the event of a Failed Remarketing as described in
Section 5.4(b) of the Purchase Contract Agreement, such Failed
Remarketing shall constitute an event of default hereunder by
such Holder and the Collateral Agent, for the benefit of the
Company, will also exercise its rights as a secured party with
respect to such Capital Securities at the direction of the
Company to retain or dispose of the Collateral in accordance with
applicable law.
(c) If a Holder of a Growth PRIDES fails to notify the
Purchase Contract Agent of such Holder's intention to make a Cash
Settlement in accordance with Section 5.4(d)(i) of the Purchase
Contract Agreement, or if a Holder of an Income PRIDES does
notify the Agent as provided in paragraph (d)(i) of the Purchase
Contract Agreement of its intention to pay the Purchase Price in
cash, but fails to make such payment as required by paragraph
5.4(d)(ii) of the Purchase Contract Agreement, such failure shall
constitute an event of default hereunder by such Holder and upon
the maturity of any Pledged Treasury Securities or the Treasury
Portfolio, if any, held by the Collateral Agent on the Business
Day immediately preceding the Purchase Contract Settlement Date,
the principal amount of the Pledged Treasury Securities or the
Treasury Portfolio received by the Collateral Agent shall, upon
written direction of the Company, be invested promptly in
Permitted Investments. On the Purchase Contract Settlement Date,
an amount equal to the Purchase Price will be remitted to the
Company as payment thereof. In the event the sum of the proceeds
from the related Pledged Treasury Securities or the Treasury
Portfolio, as the case may be, and the investment earnings earned
from such investments is in excess of the aggregate Purchase
Price of the Purchase Contracts being settled thereby, the
Collateral Agent will distribute such excess to the Purchase
Contract Agent for the benefit of the Holder of the related
Growth PRIDES or Income PRIDES when received.
Section 4.5. Early Settlement. Upon written notice to the
Collateral Agent by the Purchase Contract Agent that one or more
Holders of Securities have elected to effect Early Settlement of
their respective obligations under the Purchase Contracts forming
a part of such Securities in accordance with the terms of the
Purchase Contracts and the Purchase Contract Agreement (setting
forth the number of such Purchase Contracts as to which such
Holders have elected to effect Early Settlement), and that the
Purchase Contract Agent has received from such Holders, and paid
to the Company as confirmed in writing by the Company, the
related Early Settlement Amounts pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that
all conditions to such Early Settlement have been satisfied, then
the Collateral Agent shall release from the Pledge, (a) Pledged
Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio in the case of a Holder of
Income PRIDES or (b) Pledged Treasury Securities in the case of a
Holder of Growth PRIDES, as the case may be, with a principal
amount equal to the product of (i) the Stated Amount times (ii)
the number of such Purchase Contracts as to which such Holders
have elected to effect Early Settlement and shall Transfer all
such Pledged Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Pledged Treasury
Securities, as the case may be, free and clear of the Pledge
created hereby, to the Purchase Contract Agent for the benefit of
the Holders.
Section 4.6. Application of Proceeds Settlement. (a) In
the event a Holder of Income PRIDES (if a Tax Event Redemption
has not occurred) has not elected to make an effective Cash
Settlement by notifying the Purchase Contract Agent in the manner
provided for in paragraph 5.4(a)(i) in the Purchase Contract
Agreement or has not made an Early Settlement of the Purchase
Contract(s) underlying its Income PRIDES, such Holder shall be
deemed to have elected to pay for the shares of Common Stock to
be issued under such Purchase Contract(s) from the Proceeds of
the related Pledged Capital Securities. The Collateral Agent
shall, by 10:00 a.m., New York City time, on the fourth Business
Day immediately preceding the Purchase Contract Settlement Date,
without any instruction from such Holder of Income PRIDES,
present the related Pledged Capital Securities to the Remarketing
Agent for remarketing. Upon receiving such Pledged Capital
Securities, the Remarketing Agent, pursuant to the terms of the
Remarketing Agreement and the Remarketing Underwriting Agreement,
will use its reasonable efforts to remarket such Pledged Capital
Securities on such date at a price not less than approximately
100.5% of the aggregate Value of such Pledged Capital Securities,
plus accrued and unpaid distributions (including deferred
distributions), if any, thereon. After deducting as the
Remarketing Fee an amount not exceeding 25 basis points (.25%) of
the aggregate Value of the Pledged Capital Securities from any
amount of such Proceeds in excess of the aggregate Value, plus
such accrued and unpaid distributions (including deferred
distributions) of the remarketed Pledged Capital Securities, the
Remarketing Agent will remit the entire amount of the Proceeds of
such remarketing to the Collateral Agent. On the Purchase
Contract Settlement Date, the Collateral Agent shall apply that
portion of the Proceeds from such remarketing equal to the
aggregate Value, plus such accrued and unpaid distributions
(including deferred distributions) of such Pledged Capital
Securities, to satisfy in full the obligations of such Holders of
Income PRIDES to pay the Purchase Price to purchase the Common
Stock under the related Purchase Contracts. The remaining
portion of such Proceeds, if any, shall be distributed by the
Collateral Agent to the Purchase Contract Agent for payment to
the Holders. If the Remarketing Agent advises the Collateral
Agent in writing that it cannot remarket the related Pledged
Capital Securities of such Holders of Income PRIDES at a price
not less than 100% of the aggregate Value of such Pledged Capital
Securities plus any accrued and unpaid distributions (including
deferred distributions), thus resulting in a Failed Remarketing
and an event of default under the Purchase Contract Agreement and
hereunder, the Collateral Agent, for the benefit of the Company
will, at the written direction of the Company, retain or dispose
of the Pledged Capital Securities in accordance with applicable
law and satisfy in full, from any such disposition or retention,
such Holder's obligation to pay the Purchase Price for the Common
Stock.
(b) In the event a Holder of Growth PRIDES or Income PRIDES
(if a Tax Event Redemption has occurred) has not made an Early
Settlement of the Purchase Contract(s) underlying its Growth
PRIDES or Income PRIDES, such Holder shall be deemed to have
elected to pay for the shares of Common Stock to be issued under
such Purchase Contract(s) from the Proceeds of the related
Pledged Treasury Securities or the Treasury Portfolio, as the
case may be. On the Business Day immediately prior to the
Purchase Contract Settlement Date, the Collateral Agent shall, at
the written direction of the Purchase Contract Agent, invest the
Cash proceeds of the maturing Pledged Treasury Securities or the
Treasury Portfolio, as the case may be, in overnight Permitted
Investments. Without receiving any instruction from any such
Holder of Growth PRIDES or Income PRIDES, the Collateral Agent
shall apply the Proceeds of the related Pledged Treasury
Securities or Treasury Portfolio to the settlement of such
Purchase Contracts on the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related
Pledged Treasury Securities or Treasury Portfolio and the
investment earnings from the investment in overnight Permitted
Investments is in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent
shall distribute such excess, when received, to the Purchase
Contract Agent for the benefit of the Holders.
(c) Pursuant to the Remarketing Agreement and subject to the
terms of the Remarketing Underwriting Agreement, on or prior to
the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, but no earlier than the Payment Date
immediately preceding the Purchase Contract Settlement Date,
holders of Separate Capital Securities may elect to have their
Separate Capital Securities remarketed by delivering their Sepa
rate Capital Securities, together with a notice of such election,
substantially in the form of Exhibit C hereto, to the Custodial
Agent. The Custodial Agent will hold such Separate Capital
Securities in an account separate from the Collateral Account. A
holder of Separate Capital Securities electing to have its
Separate Capital Securities remarketed will also have the right
to withdraw such election by written notice to the Custodial
Agent, substantially in the form of Exhibit D hereto, on or prior
to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, upon which notice the Custodial Agent
will return such Separate Capital Securities to such holder. On
the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, the Custodial Agent will deliver to the
Remarketing Agent for remarketing all separate Capital Securities
delivered to the Custodial Agent pursuant to this Section 4.6(c)
and not withdrawn pursuant to the terms hereof prior to such
date. The portion of the proceeds from such remarketing equal to
the aggregate Value of such Separate Capital Securities will
automatically be remitted by the Remarketing Agent to the
Custodial Agent for the benefit of the holders of such Separate
Capital Securities. In addition, after deducting as the
Remarketing Fee an amount not exceeding 25 basis points (.25%) of
the Value of the remarketed Separate Capital Securities, from any
amount of such proceeds in excess of the aggregate Value of the
remarketed Separate Capital Securities plus any accrued and
unpaid distributions (including deferred distributions, if any),
the Remarketing Agent will remit to the Custodial Agent the
remaining portion of the proceeds, if any, for the benefit of
such holders. If, despite using its reasonable efforts, the
Remarketing Agent advises the Custodial Agent in writing that it
cannot remarket the related Separate Capital Securities of such
holders at a price not less than 100% of the aggregate Value of
such Separate Capital Securities plus accrued and unpaid distribu
tions (including deferred distributions) and thus resulting in a
Failed Remarketing, the Remarketing Agent will promptly return
such Capital Securities to the Custodial Agent for redelivery to
such holders. In the event of a dissolution of the Trust and the
distribution of the Debentures as described in the Declaration,
all references to "Separate Capital Securities" in this Section
4.6(c) shall be deemed to be references to Debentures.
Section 5. Voting Rights -- Capital Securities. The
Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the
Pledged Capital Securities or any part thereof for any purpose
not inconsistent with the terms of this Agreement and in
accordance with the terms of the Purchase Contract Agreement;
provided, that the Purchase Contract Agent shall not exercise or,
as the case may be, shall not refrain from exercising such right
if, in the judgment of the Company, such action would impair or
otherwise have a material adverse effect on the value of all or
any of the Pledged Capital Securities; and provided, further,
that the Purchase Contract Agent shall give the Company and the
Collateral Agent at least five days' prior written notice of the
manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of any
notices and other communications in respect of any Pledged Capi
tal Securities, including notice of any meeting at which holders
of Capital Securities are entitled to vote or solicitation of
consents, waivers or proxies of holders of Capital Securities,
the Collateral Agent shall use reasonable efforts to send
promptly to the Purchase Contract Agent such notice or
communication, and as soon as reasonably practicable after
receipt of a written request therefor from the Purchase Contract
Agent, execute and deliver to the Purchase Contract Agent such
proxies and other instruments in respect of such Pledged Capital
Securities (in form and substance satisfactory to the Collateral
Agent) as are prepared by the Purchase Contract Agent with
respect to the Pledged Capital Securities.
Section 6. Rights and Remedies; Distribution of the
Debentures; Tax Event Redemption
Section 6.1. Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies specified in Section
4.4 hereof or otherwise available at law or in equity, after an
event of default hereunder, the Collateral Agent shall have all
of the rights and remedies with respect to the Collateral of a
secured party under the Uniform Commercial Code as in effect in
the State of New York (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. Without limiting the generality of
the foregoing, such remedies may include, to the extent permitted
by applicable law, (i) retention of the Pledged Capital
Securities or other Collateral in full satisfaction of the
Holders obligations under the Purchase Contracts or (ii) sale of
the Pledged Capital Securities or other Collateral in one or more
public or private sales.
(b) Without limiting any rights or powers otherwise granted
by this Agreement to the Collateral Agent, in the event the
Collateral Agent is unable to make payments to the Company on
account of the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio or on account of principal payments of any
Pledged Treasury Securities as provided in Section 3 hereof in
satisfaction of the obligations of the Holder of the Securities
of which such Pledged Treasury Securities, or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Purchase Contracts, the
inability to make such payments shall constitute an event of
default hereunder and the Collateral Agent shall have and may
exercise, with reference to such Pledged Treasury Securities, or
such appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, and such obligations of such Holder,
any and all of the rights and remedies available to a secured
party under the Code and the TRADES Regulations after default by
a debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted
by this Agreement to the Collateral Agent, the Collateral Agent
is hereby irrevocably authorized to receive and collect all
payments of (i) the Stated Amount of or, cash distributions on,
the Pledged Capital Securities, (ii) the principal amount of the
Pledged Treasury Securities, or (iii) the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, subject, in each case,
to the provisions of Section 3, and as otherwise granted herein.
(d) The Purchase Contract Agent and each Holder of
Securities, in the event such Holder becomes the Holder of a
Growth PRIDES, agrees that, from time to time, upon the written
request of the Collateral Agent, the Purchase Contract Agent or
such Holder shall execute and deliver such further documents and
do such other acts and things as the Collateral Agent may
reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the
Collateral Agent hereunder. The Purchase Contract Agent shall
have no liability to any Holder for executing any documents or
taking any such acts requested by the Collateral Agent hereunder,
except for liability for its own negligent act, its own negligent
failure to act or its own willful misconduct.
Section 6.2. Distribution of the Debentures; Tax Event
Redemption. Upon the occurrence of an Investment Company Event
or a liquidation of the Trust, a principal amount of the
Debentures constituting the assets of the Trust and underlying
the Capital Securities equal to the aggregate stated liquidation
amount of the Pledged Capital Securities shall be delivered to
the Collateral Agent in exchange for the Pledged Capital
Securities. In the event the Collateral Agent receives such
Debentures in respect of Pledged Capital Securities upon the
occurrence of an Investment Company Event or liquidation of the
Trust, the Collateral Agent shall Transfer the Debentures to the
Collateral Account in the manner specified herein for Pledged
Capital Securities to secure the obligations of the Holders of
Income PRIDES to purchase the Company's Common Stock under the
related Purchase Contracts. Thereafter, the Collateral Agent
shall have such security interests, rights and obligations with
respect to the Debentures as it had in respect of the Pledged
Capital Securities as provided in Sections 2, 3, 4, 5 and 6
hereof, and any reference herein to the Pledged Capital
Securities shall be deemed to be referring to such Debentures.
Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Redemption Price payable
on the Tax Event Redemption Date with respect to the Applicable
Principal Amount of Debentures shall be delivered to the
Collateral Agent by the Institutional Trustee or upon a
dissolution of the Trust and the distribution of the related
Debentures by the Debenture Trustee on or prior to 12:30 p.m.,
New York City time, by check or wire transfer in immediately
available funds at such place and at such account as may be desig
nated by the Collateral Agent in exchange for the Pledged Capital
Securities or Debentures, as the case may be. In the event the
Collateral Agent receives such Redemption Price, the Collateral
Agent will, at the written direction of the Company, apply an
amount equal to the Redemption Amount of such Redemption Price to
purchase from the Quotation Agent, the Treasury Portfolio and
promptly remit the remaining portion of such Redemption Price to
the Purchase Contract Agent for payment to the Holders of Income
PRIDES. The Collateral Agent shall Transfer the Treasury
Portfolio to the Collateral Account in the manner specified
herein for Pledged Capital Securities to secure the obligation of
all Holders of Income PRIDES to purchase Common Stock of the
Company under the Purchase Contracts constituting a part of such
Income PRIDES, in substitution for the Pledged Capital
Securities. Thereafter the Collateral Agent shall have such
security interests, rights and obligations with respect to the
Treasury Portfolio as it had in respect of the Pledged Capital
Securities or Debentures, as the case may be, as provided in
Sections 2, 3, 4, 5 and 6, and any reference herein to the
Pledged Capital Securities or the Debentures shall be deemed to
be reference to such Treasury Portfolio.
Section 6.3. Substitutions. Whenever a Holder has the
right to substitute Treasury Securities, Capital Securities or
the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, for Collateral held by the
Collateral Agent, such substitution shall not constitute a
novation of the security interest created hereby.
Section 7. Representations and Warranties; Covenants.
Section 7.1. Representations and Warranties. The Holders
from time to time, acting through the Purchase Contract Agent as
their attorney-in-fact (it being understood that the Purchase
Contract Agent shall not be liable for any representation or
warranty made by or on behalf of a Holder), hereby represent and
warrant to the Collateral Agent, which representations and
warranties shall be deemed repeated on each day a Holder
Transfers Collateral that:
(a) such Holder has the power to grant a security
interest in and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the
Collateral and, in the case of Collateral
delivered in physical form, is the sole holder of
such Collateral and is the sole beneficial owner
of, or has the right to Transfer, the Collateral
it Transfers to the Collateral Agent, free and
clear of any security interest, lien,
encumbrance, call, liability to pay money or
other restriction other than the security
interest and lien granted under Section 2 hereof;
(c) upon the Transfer of the Collateral to the
Collateral Account, the Collateral Agent, for the
benefit of the Company, will have a valid and
perfected first priority security interest
therein (assuming that any central clearing opera
tion or any Intermediary or other entity not
within the control of the Holder involved in the
Transfer of the Collateral, including the
Collateral Agent, gives the notices and takes the
action required of it hereunder and under
applicable law for perfection of that interest
and assuming the establishment and exercise of
control pursuant to Section 2.2 hereof); and
(d) the execution and performance by the Holder of
its obligations under this Agreement will not
result in the creation of any security interest,
lien or other encumbrance on the Collateral other
than the security interest and lien granted under
Section 2 hereof or violate any provision of any
existing law or regulation applicable to it or of
any mortgage, charge, pledge, indenture, contract
or undertaking to which it is a party or which is
binding on it or any of its assets.
Section 7.2. Covenants. The Holders from time to time,
acting through the Purchase Contract Agent as their attorney-in-
fact (it being understood that the Purchase Contract Agent shall
not be liable for any covenant made by or on behalf of a Holder),
hereby covenant to the Collateral Agent that for so long as the
Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such
Holders will create or purport to create or allow
to subsist any mortgage, charge, lien, pledge or
any other security interest whatsoever over the
Collateral or any part of it other than pursuant
to this Agreement; and
(b) neither the Purchase Contract Agent nor such
Holders will sell or otherwise dispose (or
attempt to dispose) of the Collateral or any part
of it except for the beneficial interest therein,
subject to the pledge hereunder, transferred in
connection with the Transfer of the Securities.
Section 8. The Collateral Agent. It is hereby agreed as
follows:
Section 8.1. Appointment, Powers and Immunities. The
Collateral Agent shall act as Agent for the Company hereunder
with such powers as are specifically vested in the Collateral
Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. Each of the
Collateral Agent, the Custodial Agent and the Securities
Intermediary: (a) shall have no duties or responsibilities except
those expressly set forth in this Agreement and no implied
covenants or obligations shall be inferred from this Agreement
against any of them, nor shall any of them be bound by the provi
sions of any agreement by any party hereto beyond the specific
terms hereof; (b) shall not be responsible for any recitals
contained in this Agreement, or in any certificate or other
document referred to or provided for in, or received by it under,
this Agreement, the Securities or the Purchase Contract
Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement
(other than as against the Collateral Agent), the Securities or
the Purchase Contract Agreement or any other document referred to
or provided for herein or therein or for any failure by the
Company or any other Person (except the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may
be) to perform any of its obligations hereunder or thereunder or
for the perfection, priority or, except as expressly required
hereby, maintenance of any security interest created hereunder;
(c) shall not be required to initiate or conduct any litigation
or collection proceedings hereunder (except in the case of the
Collateral Agent, pursuant to directions furnished under Section
8.2 hereof, subject to Section 8.6 hereof); (d) shall not be
responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to
or provided for herein or in connection herewith or therewith,
except for its own negligence or willful misconduct; and (e)
shall not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with
respect to, the Securities or other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the
Collateral Agent shall take all reasonable action in connection
with the safekeeping and preservation of the Collateral
hereunder.
No provision of this Agreement shall require the Collateral
Agent, the Custodial Agent or the Securities Intermediary to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder. In
no event shall the Collateral Agent, the Custodial Agent or the
Securities Intermediary be liable for any amount in excess of the
Value of the Collateral. Notwithstanding the foregoing, the
Collateral Agent, the Custodial Agent and Securities
Intermediary, each in its individual capacity, hereby waive any
right of setoff, bankers lien, liens or perfection rights as
securities intermediary or any counterclaim with respect to any
of the Collateral.
Section 8.2. Instructions of the Company. The Company
shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be, to
direct the time, method and place of conducting any proceeding
for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the
Collateral Agent, the Custodial Agent or the Securities Intermedi
ary, as the case may be, or to direct the taking or refraining
from taking of any action authorized by this Agreement; provided,
however, that (i) such direction shall not conflict with the
provisions of any law or of this Agreement and (ii) the
Collateral Agent, the Custodial Agent and the Securities
Intermediary shall be adequately indemnified as provided herein.
Nothing in this Section 8.2 shall impair the right of the
Collateral Agent in its discretion to take any action or omit to
take any action which it deems proper and which is not
inconsistent with such direction.
Section 8.3. Reliance by Collateral Agent. Each of the
Securities Intermediary, the Custodial Agent and the Collateral
Agent shall be entitled conclusively to rely upon any
certification, order, judgment, opinion, notice or other
communication (including, without limitation, any thereof by
telephone, telecopy, telex or facsimile) believed by it to be
genuine and correct and to have been signed or sent by or on
behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon
advice and statements of legal counsel and other experts selected
by the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be. As to any matters not
expressly provided for by this Agreement, the Collateral Agent,
the Custodial Agent and the Securities Intermediary shall in all
cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions given by the Company in
accordance with this Agreement.
Section 8.4. Rights in Other Capacities. The Collateral
Agent, the Custodial Agent and the Securities Intermediary and
their affiliates may (without having to account therefor to the
Company) accept deposits from, lend money to, make their
investments in and generally engage in any kind of banking, trust
or other business with the Purchase Contract Agent and any Holder
of Securities (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may
be, and the Collateral Agent, the Custodial Agent and the
Securities Intermediary and their affiliates may accept fees and
other consideration from the Purchase Contract Agent and any
Holder of Securities without having to account for the same to
the Company; provided that each of the Securities Intermediary,
the Custodial Agent and the Collateral Agent covenants and agrees
with the Company that it shall not accept, receive or permit
there to be created in favor of itself and shall take no
affirmative action to permit there to be created in favor of any
other Person, any security interest, lien or other encumbrance of
any kind in or upon the Collateral.
Section 8.5. Non-Reliance on Collateral Agent. None of the
Securities Intermediary, the Custodial Agent or the Collateral
Agent shall be required to keep itself informed as to the
performance or observance by the Purchase Contract Agent or any
Holder of Securities of this Agreement, the Purchase Contract
Agreement, the Securities or any other document referred to or
provided for herein or therein or to inspect the properties or
books of the Purchase Contract Agent or any Holder of Securities.
The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall not have any duty or responsibility to provide
the Company with any credit or other information concerning the
affairs, financial condition or business of the Purchase Contract
Agent or any Holder of Securities (or any of their respective
affiliates) that may come into the possession of the Collateral
Agent, the Custodial Agent or the Securities Intermediary or any
of their respective affiliates.
Section 8.6. Compensation and Indemnity. The Company
agrees: (i) to pay each of the Collateral Agent and the Custodial
Agent from time to time such compensation as shall be agreed in
writing between the Company and the Collateral Agent or the
Custodial Agent, as the case may be, for all services rendered by
each of them hereunder and (ii) to indemnify the Collateral
Agent, the Custodial Agent and the Securities Intermediary for,
and to hold each of them harmless from and against, any loss,
liability or reasonable out-of-pocket expense incurred without
negligence, willful misconduct or bad faith on its part, arising
out of or in connection with the acceptance or administration of
its powers and duties under this Agreement, including the
reasonable out-of-pocket costs and expenses (including reasonable
fees and expenses of counsel) of defending itself against any
claim or liability in connection with the exercise or performance
of such powers and duties.
Section 8.7. Failure to Act. In the event of any ambiguity
in the provisions of this Agreement or any dispute between or
conflicting claims by or among the parties hereto or any other
Person with respect to any funds or property deposited hereunder,
the Collateral Agent and the Custodial Agent shall be entitled,
after prompt notice to the Company and the Purchase Contract
Agent, at its sole option, to refuse to comply with any and all
claims, demands or instructions with respect to such property or
funds so long as such dispute or conflict shall continue, and
neither the Collateral Agent nor the Custodial Agent shall be or
become liable in any way to any of the parties hereto for its
failure or refusal to comply with such conflicting claims,
demands or instructions. The Collateral Agent and the Custodial
Agent shall be entitled to refuse to act until either (i) such
conflicting or adverse claims or demands shall have been finally
determined by a court of competent jurisdiction or settled by
agreement between the conflicting parties as evidenced in a
writing, satisfactory to the Collateral Agent or the Custodial
Agent, as the case may be, or (ii) the Collateral Agent or the
Custodial Agent, as the case may be, shall have received security
or an indemnity satisfactory to the Collateral Agent or the
Custodial Agent, as the case may be, sufficient to save the
Collateral Agent or the Custodial Agent, as the case may be,
harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which the Collateral Agent or
the Custodial Agent, as the case may be, may incur by reason of
its acting. The Collateral Agent or the Custodial Agent may in
addition elect to commence an interpleader action or seek other
judicial relief or orders as the Collateral Agent or the
Custodial Agent, as the case may be, may deem necessary. Notwith
standing anything contained herein to the contrary, neither the
Collateral Agent nor the Custodial Agent shall be required to
take any action that is in its opinion contrary to law or to the
terms of this Agreement, or which would in its opinion subject it
or any of its officers, employees or directors to liability.
Section 8.8. Resignation of Collateral Agent. Subject to
the appointment and acceptance of a successor Collateral Agent or
Custodial Agent as provided below, (a) the Collateral Agent and
the Custodial Agent may resign at any time by giving notice
thereof to the Company and the Purchase Contract Agent as
attorney-in-fact for the Holders of Securities, (b) the
Collateral Agent and the Custodial Agent may be removed at any
time by the Company and (c) if the Collateral Agent or the
Custodial Agent fails to perform any of its material obligations
hereunder in any material respect for a period of not less than
20 days after receiving written notice of such failure by the
Purchase Contract Agent and such failure shall be continuing, the
Collateral Agent or the Custodial Agent may be removed by the
Purchase Contract Agent. The Purchase Contract Agent shall
promptly notify the Company of any removal of the Collateral
Agent pursuant to clause (c) of the immediately preceding
sentence. Upon any such resignation or removal, the Company
shall have the right to appoint a successor Collateral Agent or
Custodial Agent, as the case may be. If no successor Collateral
Agent or Custodial Agent, as the case may be, shall have been so
appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's or Custodial Agent's giving
of notice of resignation or such removal, then the retiring
Collateral Agent or Custodial Agent, as the case may be, may
petition any court of competent jurisdiction for the appointment
of a successor Collateral Agent or Custodial Agent, as the case
may be. Each of the Collateral Agent and the Custodial Agent
shall be a bank which has an office in New York, New York with a
combined capital and surplus of at least $75,000,000. Upon the
acceptance of any appointment as Collateral Agent or Custodial
Agent, as the case may be, hereunder by a successor Collateral
Agent or Custodial Agent, as the case may be, such successor
shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Collateral Agent or
Custodial Agent, as the case may be, and the retiring Collateral
Agent or Custodial Agent, as the case may be, shall take all
appropriate action to transfer any money and property held by it
hereunder (including the Collateral) to such successor. The
retiring Collateral Agent or Custodial Agent shall, upon such
succession, be discharged from its duties and obligations as
Collateral Agent or Custodial Agent hereunder. After any
retiring Collateral Agent's or Custodial Agent's resignation
hereunder as Collateral Agent or Custodial Agent, the provisions
of this Section 8 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while
it was acting as the Collateral Agent or Custodial Agent. Any
resignation or removal of the Collateral Agent hereunder shall be
deemed for all purposes of this Agreement as the simultaneous
resignation or removal of the Custodial Agent and the Securities
Intermediary.
Section 8.9. Right to Appoint Agent or Advisor. The
Collateral Agent shall have the right to appoint agents or
advisors in connection with any of its duties hereunder, and the
Collateral Agent shall not be liable for any action taken or
omitted by, or in reliance upon the advice of, such agents or
advisors selected in good faith. The appointment of agents
pursuant to this Section 8.9 shall be subject to prior consent of
the Company, which consent shall not be unreasonably withheld.
Section 8.10. Survival. The provisions of this Section 8
shall survive termination of this Agreement and the resignation
or removal of the Collateral Agent or the Custodial Agent.
Section 8.11. Exculpation. Anything in this Agreement to
the contrary notwithstanding, in no event shall any of the
Collateral Agent, the Custodial Agent or the Securities
Intermediary or their officers, employees or agents be liable
under this Agreement to any third party for indirect, special,
punitive, or consequential loss or damage of any kind whatsoever,
including lost profits, whether or not the likelihood of such
loss or damage was known to the Collateral Agent, the Custodial
Agent or the Securities Intermediary, or any of them, incurred
without any act or deed that is found to be attributable to gross
negligence or willful misconduct on the part of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.
Section 9. Amendment.
Section 9.1. Amendment Without Consent of Holders. Without
the consent of any Holders or the holders of any Separate Capital
Securities, the Company, the Collateral Agent, the Custodial
Agent, the Securities Intermediary and the Purchase Contract
Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the
covenants of the Company; or
(2) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power
herein conferred upon the Company so long as such covenants
or such surrender do not adversely affect the validity,
perfection or priority of the security interests granted or
created hereunder; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Collateral Agent,
Securities Intermediary or Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other
such provisions herein, or to make any other provisions with
respect to such matters or questions arising under this
Agreement, provided such action shall not adversely affect
the interests of the Holders.
Section 9.2. Amendment with Consent of Holders. With the
consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of said
Holders delivered to the Company, the Purchase Contract Agent or
the Collateral Agent, as the case may be, the Company, when duly
authorized, the Purchase Contract Agent, the Collateral Agent,
the Custodial Agent and the Securities Intermediary may amend
this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the rights of the Holders in
respect of the Securities; provided, however, that no such sup
plemental agreement shall, without the consent of the Holder of
each Outstanding Security adversely affected thereby,
(1) change the amount or type of Collateral underlying
a Security (except for the rights of holders of Income
PRIDES to substitute the Treasury Securities for the Pledged
Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, or
the rights of Holders of Growth PRIDES to substitute Capital
Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as applicable, for the Pledged
Treasury Securities), impair the right of the Holder of any
Security to receive distributions on the underlying
Collateral or otherwise adversely affect the Holder's rights
in or to such Collateral; or
(2) otherwise effect any action that would require the
consent of the Holder of each Outstanding Security affected
thereby pursuant to the Purchase Contract Agreement if such
action were effected by an agreement supplemental thereto;
or
(3) reduce the percentage of Purchase Contracts the
consent of whose Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed amendment,
but it shall be sufficient if such Act shall approve the
substance thereof.
Section 9.3. Execution of Amendments. In executing any
amendment permitted by this Section, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent shall be entitled to receive and (subject to
Section 6.1 hereof, with respect to the Collateral Agent, and
Section 7.1 of the Purchase Contract Agreement, with respect to
the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that
all conditions precedent, if any, to the execution and delivery
of such amendment have been satisfied.
Section 9.4. Effect of Amendments. Upon the execution of
any amendment under this Section 9, this Agreement shall be
modified in accordance therewith, and such amendment shall form a
part of this Agreement for all purposes; and every Holder of
Certificates theretofore or thereafter authenticated, executed on
behalf of the Holders and delivered under the Purchase Contract
Agreement shall be bound thereby.
Section 9.5. Reference to Amendments. Security
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any amendment pursuant to this
Section may, and shall if required by the Collateral Agent or the
Purchase Contract Agent, bear a notation in form approved by the
Purchase Contract Agent and the Collateral Agent as to any matter
provided for in such amendment. If the Company shall so deter
mine, new Security Certificates so modified as to conform, in the
opinion of the Collateral Agent, the Purchase Contract Agent and
the Company, to any such amendment may be prepared and executed
by the Company and authenticated, executed on behalf of the
Holders and delivered by the Purchase Contract Agent in
accordance with the Purchase Contract Agreement in exchange for
Outstanding Security Certificates.
Section 10. Miscellaneous.
Section 10.1. No Waiver. No failure on the part of the
Collateral Agent 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 the
Collateral Agent or any of its agents of any right, power or
remedy hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any
remedies provided by law.
Section 10.2. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. Without limiting the foregoing, the above
choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent and the Holders from time to
time acting through the Purchase Contract Agent, as their
attorney-in-fact, in connection with the establishment and
maintenance of the Collateral Account. The Company, the
Collateral Agent and the Holders from time to time of the
Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction
of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City
for the purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated
hereby. The Company, the Collateral Agent and the Holders from
time to time of the Securities, acting through the Purchase
Contract Agent as their attorney-in-fact, irrevocably waive, to
the fullest extent permitted by applicable law, any objection
which they may now or hereafter have to the laying of the venue
of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in
an inconvenient forum.
Section 10.3. Notices. All notices, requests, consents and
other communications provided for herein (including, without
limitation, any modifications of, or waivers or consents under,
this Agreement) shall be given or made in writing (including,
without limitation, by telecopy) delivered to the intended
recipient at the "Address for Notices" specified below its name
on the signature pages hereof or, as to any party, at such other
address as shall be designated by such party in a notice to the
other parties. Except as otherwise provided in this Agreement,
all such communications shall be deemed to have been duly given
when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
Section 10.4. Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the respective
successors and assigns of the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to
have agreed to be bound by the provisions hereof and to have
ratified the agreements of, and the grant of the Pledge hereunder
by, the Purchase Contract Agent.
Section 10.5. Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
Section 10.6. Severability. If any provision hereof is
invalid and unenforceable in any jurisdiction, then, to the
fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions
of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
Section 10.7. Expenses, etc. The Company agrees to
reimburse the Collateral Agent and the Custodial Agent for: (a)
all reasonable out-of-pocket costs and expenses of the Collateral
Agent and the Custodial Agent (including, without limitation, the
reasonable fees and expenses of counsel to the Collateral Agent
and the Custodial Agent), in connection with (i) the negotiation,
preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any
of the terms of this Agreement; (b) all reasonable costs and
expenses of the Collateral Agent (including, without limitation,
reasonable fees and expenses of counsel) in connection with (i)
any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its
obligations under the Purchase Contracts forming a part of the
Securities and (ii) the enforcement of this Section 10.7; and (c)
all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue
authority in respect of this Agreement or any other document
referred to herein and all costs, expenses, taxes, assessments
and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest
contemplated hereby.
Section 10.8. Security Interest Absolute. All rights of
the Collateral Agent and security interests hereunder, and all
obligations of the Holders from time to time hereunder, shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any
provision of the Purchase Contracts or the Securities or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment
of, or any other term of, or any increase in the amount of,
all or any of the obligations of Holders of Securities
under the related Purchase Contracts, or any other amendment
or waiver of any term of, or any consent to any departure
from any requirement of, the Purchase Contract Agreement or
any Purchase Contract or any other agreement or instrument
relating thereto; or
(c) any other circumstance which might otherwise
constitute a defense available to, or discharge of, a
borrower, a guarantor or a pledgor.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
INGERSOLL-RAND COMPANY
By: _______________________
Name: __________________
Title:
Address for Notices:
INGERSOLL-RAND COMPANY
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
Attention: Chief Financial Officer
Telecopy: (201) 573-3172
THE BANK OF NEW YORK,
as Purchase Contract Agent and as
attorney-in-fact of the Holders from time
to time of the Securities
By: _________________________
Name: ____________________
Title:
Address for Notices:
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust
Administration, Deriva-
tive Products Unit
Telecopy: (212) 815-7157
THE CHASE MANHATTAN BANK,
as Collateral Agent, Custodial Agent and
as Securities Intermediary
By:
Name:
Title:
Address for Notices:
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10001-2697
Attention: Corporate Trust
Administration Department
Telecopy: (212) 946-8160
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10010-2697
Attention: Corporate Trust Administration Department
Re: FELINE PRIDES of Ingersoll-Rand Company (the
"Company"), and Ingersoll-Rand Financing I
We hereby notify you in accordance with Section [4.1] [4.2]
of the Pledge Agreement, dated as of March 23, 1998, (the "Pledge
Agreement") among the Company, yourselves, as Collateral Agent,
Custodial Agent and Securities Intermediary and ourselves, as Purchase
Contract Agent and as attorney-in-fact for the holders of [Income
PRIDES] [Growth PRIDES] from time to time, that the holder of
Securities listed below (the "Holder") has elected to substitute
[$_____ aggregate principal amount of Treasury Securities]
[$_______Stated Amount of Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] in exchange
for an equal Value of [Pledged Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] [Pledged
Treasury Securities] held by you in accordance with the Pledge
Agreement and has delivered to us a notice stating that the Holder has
Transferred [Treasury Securities] [Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio]
to you, as Collateral Agent. We hereby instruct you, upon receipt of
such [Pledged Treasury Securities] [Pledged Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio],
to release the [Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio] [Treasury Securities]
related to such [Income PRIDES] [Growth PRIDES] to us in accordance
with the Holder's instructions. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Date:_____________ ___________________________
By:______________________
Name:
Title:
Signature Guarantee:_____________
Please print name and address of Registered Holder electing to
substitute [Treasury Securities] [Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio] for the [Pledged Capital Securities or the Treasury
Portfolio] [Pledged Treasury Securities]:
___________________________ ______________________________
Name Social Security or other
Taxpayer Identification
Number, if any
___________________________
Address
___________________________
___________________________
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
101 Barclay Street
12E
New York, New York 10286
Attention: Corporate Trust Administration, Derivative
Products Unit
Re: FELINE PRIDES of Ingersoll-Rand Company (the
"Company"), and Ingersoll-Rand Financing I
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent, [$_______
aggregate principal amount of Treasury Securities] [$
aggregate Stated Amount of Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] in exchange
for an equal Value of [Pledged Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] [Pledged
Treasury Securities] held by the Collateral Agent (the "Pledge
Agreement"), in accordance with Section 4.1 of the Pledge Agreement,
dated March 23, 1998, between you, the Company and the Collateral
Agent. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder
the [Pledged Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio] [Pledged Treasury
Securities] related to such [Income PRIDES] [Growth PRIDES].
Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
Dated:_____________ _________________________
Signature
Signature Guarantee:_______________________
Please print name and address of Registered Holder:
_________________________ _________________________
Name Social Security or other
Taxpayer Identification
_________________________ Number, if any
Address
_________________________
_________________________
_________________________
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001-2697
Attention: Corporate Trust Administration Department
Re: Capital Securities of Ingersoll-Rand
Company (the "Company"), and
Ingersoll-Rand Financing I
The undersigned hereby notifies you in accordance with
Section 4.6(c) of the Pledge Agreement, dated as of March 23, 1998
(the "Pledge Agreement"), among the Company, yourselves, as Collateral
Agent, Securities Intermediary and Custodial Agent, and The Bank of
New York, as Purchase Contract Agent and as attorney-in-fact for the
Holders of Income PRIDES and Growth PRIDES from time to time, that the
undersigned elects to deliver $ stated liquidation amount of Capital
Securities for delivery to the Remarketing Agent on the fourth
Business Day immediately preceding the Purchase Contract Settlement
Date for remarketing pursuant to Section 4.6(c) of the Pledge
Agreement. The undersigned will, upon request of the Remarketing
Agent, execute and deliver any additional documents deemed by the
Remarketing Agent or by the Company to be necessary or desirable to
complete the sale, assignment and transfer of the Capital Securities
tendered hereby.
The undersigned hereby instructs you, upon receipt of the
Proceeds of such remarketing from the Remarketing Agent to deliver
such Proceeds to the undersigned in accordance with the instructions
indicated herein under "A. Payment Instructions". The undersigned
hereby instructs you, in the event of Failed Remarketing, upon receipt
of the Capital Securities tendered herewith from the Remarketing
Agent, to be delivered to the person(s) and the address(es) indicated
herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents
and warrants that the undersigned has full power and authority to
tender, sell, assign and transfer the Capital Securities tendered
hereby and that the undersigned is the record owner of any
Capital Securities tendered herewith in physical form or a
participant in The Depositary Trust Company ("DTC") and the
beneficial owner of any Capital Securities tendered herewith by
book-entry transfer to your account at DTC and (ii) agrees to be
bound by the terms and conditions of Section 4.6(c) of the Pledge
Agreement. Capitalized terms used herein but not defined shall
have the meaning set forth in the Pledge Agreement.
Date:_____________
By:
Name:
Title:
Signature Guarantee:
Please print name and address:
Name Social Security or
other Taxpayer Identification
Number, if any
Address
B. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Capital Securities which
are in physical form should be delivered to the person(s) set
forth below and mailed to the address set forth below.
Name(s) ____________________________
(Please Print)
Address ____________________________
(Please Print)
____________________________________
____________________________________
(Zip Code)
_____________________________________
(Tax Identification or Social Security Number)
In the event of a Failed Remarketing, Capital Securities which
are in book-entry form should be credited to the account at The
Depositary Trust Company set forth below.
___________________
DTC Account Number
Name of Account Party: ______________
A. PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name
of the person(s) set forth below and mailed to the address set
forth below.
Name(s) _____________________________
(Please Print)
Address _____________________________
(Please Print)
_____________________________________
_____________________________________
(Zip Code)
_____________________________________
(Tax Identification or Social Security Number)
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001-2697
Attention: Corporate Trust Administration Department
Re: Capital Securities of Ingersoll-Rand
Company (the "Company"), and
Ingersoll-Rand Financing I
The undersigned hereby notifies you in accordance with
Section 4.6(c) of the Pledge Agreement, dated as of March 23, 1998
(the "Pledge Agreement") among the Company, yourselves, as Collateral
Agent, Securities Intermediary and Custodial Agent and The Bank of New
York, as Purchase Contract Agent and as attorney-in-fact for the
Holders of Income PRIDES and Growth PRIDES from time to time, that the
undersigned elects to withdraw the $_____ aggregate stated liquidation
amount of Capital Securities delivered to the Custodial Agent on May
16, 2001 for remarketing pursuant to Section 4.6(c) of the Pledge
Agreement. The undersigned hereby instructs you to return such
Capital Securities to the undersigned in accordance with the
undersigned's instructions. With this notice, the Undersigned hereby
agrees to be bound by the terms and conditions of Section 4.6(c) of
the Pledge Agreement. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date:_____________
By:
Name:
Title:
Signature Guarantee:
Please print name and address:
Name Social Security or other
Taxpayer Identification
Number, if any
Address
A. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Capital Securities which are
in physical form should be delivered to the person(s) set forth below
and mailed to the address set forth below.
Name(s) ____________________________
(Please Print)
Address ____________________________
(Please Print)
____________________________________
____________________________________
(Zip Code)
_____________________________________
(Tax Identification or Social Security Number)
In the event of a Failed Remarketing, Capital Securities which
are in book-entry form should be credited to the account at The
Depositary Trust Company set forth below.
___________________
DTC Account Number
Name of Account Party: ______________