Exhibit 4.3
================================================================================
TEEKAY SHIPPING CORPORATION
and
THE BANK OF NEW YORK,
as Collateral Agent, Custodial Agent and Securities Intermediary
and
THE BANK OF NEW YORK,
as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of February __, 2003
================================================================================
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
Section 1.01. Definitions............................................................................2
ARTICLE II
PLEDGE
Section 2.01. Pledge 5
Section 2.02. Control; Financing Statement...........................................................5
Section 2.03. Termination............................................................................6
ARTICLE III
DISTRIBUTIONS ON PLEDGED COLLATERAL
Section 3.01. Income and Distributions...............................................................6
Section 3.02. Principal Payments Following Termination Event.........................................6
Section 3.03. Principal Payments Prior to or on Purchase Contract Settlement Date....................6
Section 3.04. Payments to Purchase Contract Agent....................................................7
Section 3.05. Assets Not Properly Released...........................................................7
ARTICLE IV
CONTROL
Section 4.01. Establishment of Collateral Account....................................................7
Section 4.02. Treatment as Financial Assets..........................................................8
Section 4.03. Sole Control by Collateral Agent.......................................................8
Section 4.04. Securities Intermediary's Location.....................................................8
Section 4.05. No Other Claims........................................................................8
Section 4.06. Investment and Release.................................................................8
Section 4.07. Statements and Confirmations...........................................................9
Section 4.08. Tax Allocations........................................................................9
Section 4.09. No Other Agreements....................................................................9
Section 4.10. Powers Coupled with an Interest........................................................9
Section 4.11. Waiver of Lien; Waiver of Set-off......................................................9
ARTICLE V
INITIAL DEPOSIT; CREATION OF TREASURY UNITS AND RECREATION OF CORPORATE UNITS
Section 5.01. Initial Deposit of Notes...............................................................9
Section 5.02. Creation of Treasury Units............................................................10
Section 5.03. Recreation of Corporate Units.........................................................10
Section 5.04. Termination Event.....................................................................11
Section 5.05. Cash Settlement.......................................................................12
Section 5.06. Early Settlement and Cash Merger Early Settlement.....................................13
Section 5.07. Application of Proceeds in Settlement of Purchase Contracts...........................14
ARTICLE VI
VOTING RIGHTS - PLEDGED NOTES
i
PAGE
----
Section 6.01. Voting Rights.........................................................................16
Article VII
RIGHTS AND REMEDIES
Section 7.01. Rights and Remedies of the Collateral Agent...........................................17
Section 7.02. Successful Remarketing................................................................18
Section 7.03. Substitutions.........................................................................18
Article VIII
REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 8.01. Representations and Warranties........................................................18
Section 8.02. Covenants.............................................................................19
Article IX
THE COLLATERAL AGENT, THE CUSTODIAL AGENT
AND THE SECURITIES INTERMEDIARY
Section 9.01. Appointment, Powers and Immunities....................................................19
Section 9.02. Instructions of the Company...........................................................20
Section 9.03. Reliance by Collateral Agent and Securities Intermediary..............................20
Section 9.04. Certain Rights........................................................................21
Section 9.05. Merger, Conversion, Consolidation or Succession to Business...........................21
Section 9.06. Rights in Other Capacities............................................................21
Section 9.07. Non-Reliance on the Collateral Agent, the Custodial Agent and the Securities
Intermediary..........................................................................22
Section 9.08. Compensation and Indemnity............................................................22
Section 9.09. Failure to Act........................................................................22
Section 9.10. Resignation of the Collateral Agent, the Custodial Agent and the Securities
Intermediary..........................................................................23
Section 9.11. Right to Appoint Agent or Advisor.....................................................24
Section 9.12. Survival..............................................................................25
Section 9.13. Exculpation...........................................................................25
Article X
AMENDMENT
Section 10.01. Amendment Without Consent of Holders..................................................25
Section 10.02. Amendment with Consent of Holders.....................................................25
Section 10.03. Execution of Amendments...............................................................26
Section 10.04. Effect of Amendments..................................................................26
Section 10.05. Reference of Amendments...............................................................27
Article XI
MISCELLANEOUS
Section 11.01. No Waiver.............................................................................27
Section 11.02. Governing Law; Submission to Jurisdiction.............................................27
Section 11.03. Notices...............................................................................27
Section 11.04. Successors and Assigns................................................................28
Section 11.05. Counterparts..........................................................................28
ii
PAGE
----
Section 11.06. Severability..........................................................................28
Section 11.07. Expenses, Etc.........................................................................28
Section 11.08. Security Interest Absolute............................................................29
Exhibit A - Instruction from Purchase Contract Agent to Collateral Agent
(Creation of Treasury Units)
Exhibit B - Instruction from Collateral Agent to Securities Intermediary
(Creation of Treasury Units)
Exhibit C - Instruction from Purchase Contract Agent to Collateral Agent
(Recreation of Corporate Units)
Exhibit D - Instruction from Collateral Agent to Securities Intermediary
(Recreation of Corporate Units)
Exhibit E - Notice of Cash Settlement from Securities Intermediary to
Purchase Contract Agent (Cash Settlement Amounts)
Exhibit F - Instruction to Custodial Agent
(Regarding Remarketing)
Exhibit G - Instruction to Custodial Agent
(Withdrawal from Remarketing)
iii
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of February __, 2003 by and between Teekay
Shipping Corporation, a corporation duly incorporated and existing under the
laws of the Republic of The Marshall Islands (the "Company"), The Bank of New
York, a banking corporation with trust powers, duly organized and existing under
the laws of the State of New York, 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"), as securities intermediary (as defined in
Sections 8-102(a)(14) of the UCC) with respect to the Collateral Account (in
such capacity, together with its successors in such capacity, the "Securities
Intermediary"), and as purchase contract agent and as attorney-in-fact of the
Holders from time to time of the Units (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under the Purchase
Contract Agreement.
Capitalized terms used herein and not defined herein have the meanings
assigned to them in the Purchase Contract Agreement (as defined herein).
RECITALS
WHEREAS, the Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which 5,000,000 Corporate Units (or 5,750,000 if the
over-allotment option granted to the Underwriters pursuant to the Underwriting
Agreement is exercised in full) will be issued;
WHEREAS, each Corporate Unit, at issuance, consists of a unit comprised
of (a) a stock purchase contract (a "Purchase Contract") pursuant to which the
Holder will purchase from the Company on the Purchase Contract Settlement Date,
for an amount equal to $25.00 (the "Stated Amount"), a number of shares of the
Company's common stock, par value $0.001 per share ("Common Stock"), equal to
the Settlement Rate and (b) a Note; and
WHEREAS, pursuant to the terms of the Purchase Contract Agreement and
the Purchase Contracts, the Holders of the Units have irrevocably authorized the
Purchase Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such Holders and to
grant the pledge provided herein of the Collateral to secure the Obligations.
NOW, THEREFORE, the Company, the Collateral Agent, the Custodial Agent,
the Securities Intermediary and the Purchase Contract Agent agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(a) 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, Exhibit or other subdivision;
(b) the following terms which are defined in the UCC shall have the
meanings set forth therein: "Certificated Security," "Control," "Financial
Asset," "Entitlement Order," "Securities Account" and "Security Entitlement";
and
(c) the following terms have the meanings given to them in this Section
1.01(c):
"Agreement" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time.
"Cash" means any coin or currency of the United States of America as at the
time shall be legal tender for payment of public and private debts.
"Collateral" means the collective reference to:
(1) the Collateral Account and all investment property and other
financial assets from time to time credited to the Collateral Account,
including, without limitation, (A) the Notes and security entitlements
relating thereto that are a component of the Corporate Units from time
to time, (B) any Treasury Securities and security entitlements relating
thereto delivered from time to time upon creation of Treasury Units in
accordance with Section 5.02 hereof and (C) payments made by Holders
pursuant to Section 5.05 hereof;
(2) all Proceeds of any of the foregoing (whether such Proceeds arise
before or after the commencement of any proceeding under any applicable
bankruptcy, insolvency or other similar law, by or against the pledgor
or with respect to the pledgor); and
(3) all powers and rights now owned or hereafter acquired under or with
respect to the Collateral.
"Collateral Account" means the segregated securities account of the
Collateral Agent, maintained by the Securities Intermediary and designated "The
Bank of New York, as Collateral Agent of Teekay Shipping Corporation, as pledgee
of The Bank of New York, as the Purchase Contract Agent on behalf of and as
attorney-in-fact for the Holders".
2
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such pursuant to the
applicable provisions of the Purchase Contract Agreement, and thereafter
"Company" shall mean such successor.
"Corporate Unit" means the collective rights and obligations of a Holder of
a Corporate Units Certificate in respect of a Note, subject to the Pledge
thereof, and the related Purchase Contract.
"Corporate Units Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Corporate Units specified on
such certificate.
"Obligations" means, with respect to each Holder, all obligations and
liabilities of such Holder under such Holder's Purchase Contract, the Purchase
Contract Agreement and this Agreement or any other document made, delivered or
given in connection herewith or therewith, in each case whether on account of
principal, interest (including, without limitation, interest accruing before and
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to such Holder, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding), fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Company or the
Collateral Agent or the Securities Intermediary that are required to be paid by
the Holder pursuant to the terms of any of the foregoing agreements).
"Permitted Investments" means any one of the following, in each case
maturing on the Business Day following the date of acquisition:
(1) 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 of the timely payment thereof or such
indebtedness constitutes a general obligation of it);
(2) 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 $500 million as of the
date of its latest filed report of condition or its audited financial
statements (and which may include the Collateral Agent);
(3) 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 (2);
(4) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or unconditionally
guaranteed by the United States of America or issued by any agency
thereof and backed as to timely payment by the full faith and credit
of the United States of America;
(5) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation
incorporated under the
3
laws of the United States of America 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
(6) investments in money market funds (including, but not limited
to, money market funds managed by the Collateral Agent or an affiliate
of the Collateral Agent) 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 legal person, including, without limitation, any
individual, corporation, estate, partnership, joint venture, association,
joint-stock company, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Pledge" means the lien and security interest created by this Agreement.
"Pledged Notes" means Notes and security entitlements with respect thereto
from time to time credited to the Collateral Account and not then released from
the Pledge.
"Pledged Securities" means the Pledged Notes and the Pledged Treasury
Securities, collectively.
"Pledged Treasury Securities" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.
"Proceeds" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, Cash, instruments, securities,
financial assets and other property received, receivable or otherwise
distributed upon the sale, exchange, collection or disposition of any financial
assets from time to time held in the Collateral Account.
"Purchase Contract Agent" has the meaning specified in the paragraph
preceding the recitals of this Agreement.
"Separate Notes" means Notes which are not components of Corporate Units.
"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 (1) in the case of certificated securities in registered
form, delivery as provided in Section 8-301(a) of the UCC, endorsed to the
transferee or in blank by an effective endorsement; (2) in the case of Treasury
Securities, registration of the transferee as the owner of such Treasury
Securities on TRADES; and (3) in the case of security entitlements, including,
4
without limitation, security entitlements with respect to Treasury Securities, a
securities intermediary indicating by book entry that such security entitlement
has been credited to the transferee's securities account.
"Treasury Securities" means zero-coupon U.S. treasury securities that
mature on February 15, 2006 (CUSIP No. 912803AJ2).
"Treasury Unit" means, following the substitution of Treasury Securities
for Notes as collateral to secure a Holder's obligations under the Purchase
Contract, the collective rights and obligations of a Holder of a Treasury Units
Certificate in respect of such Treasury Securities, subject to the Pledge
thereof, and the related Purchase Contract.
"Treasury Units Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Treasury Units specified on
such certificate.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York from time to time.
"Value" means, with respect to any item of Collateral on any date, as to
(1) Cash, the face amount thereof and (2) Treasury Securities or Notes, the
aggregate principal amount thereof at maturity.
ARTICLE II
PLEDGE
Section 2.01. Pledge. Each Holder, acting through the Purchase Contract
Agent as such Holder's attorney-in-fact, and the Purchase Contract Agent, acting
solely as such attorney-in-fact, hereby pledges and grants to the Collateral
Agent, as agent of and for the benefit of the Company, a continuing first
priority security interest in and to, and a lien upon and right of set-off
against, all of such Person's right, title and interest in and to the Collateral
to secure the prompt and complete payment and performance when due (whether at
stated settlement, by early settlement or otherwise) of the Obligations. The
Collateral Agent shall have all of the rights, remedies and recourses with
respect to the Collateral afforded a secured party by the UCC, in addition to,
and not in limitation of, the other rights, remedies and recourses afforded to
the Collateral Agent by this Agreement.
Section 2.02. Control; Financing Statement.
(a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of Article 4 of this Agreement.
(b) Subsequent to the date of initial issuance of the Units, the
Purchase Contract Agent shall deliver to the Collateral Agent a copy of the
financing statement prepared by the Company and filed in the Office of the
Secretary of State of the State of New York and any other jurisdictions which
the Company deems necessary, authorized by the Purchase Contract Agent, as
attorney-in-fact for the Holders, as Debtors, and describing the Collateral,
such filing to be undertaken by the Company.
5
(c) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, and each of them severally, with
full power of substitution, as the Purchase Contract Agent's attorney-in-fact to
take on behalf of, and in the name, place and stead of the Purchase Contract
Agent and the Holders, any action necessary or desirable to perfect and to keep
perfected the security interest in the Collateral referred to in Section 2.01.
The grant of such power-of-attorney shall not be deemed to require of the
Collateral Agent any specific duties or obligations not otherwise assumed by the
Collateral Agent hereunder.
Section 2.03. Termination. As to each Holder, this Agreement and the
Pledge created hereby shall automatically terminate upon the satisfaction of
such Holder's Obligations. Upon such termination, the Collateral Agent shall
Transfer such Holder's portion of the Collateral to the Purchase Contract Agent
for distribution to such Holder, free and clear of the Pledge created hereby.
ARTICLE III
DISTRIBUTIONS ON PLEDGED COLLATERAL
Section 3.01. Income and Distributions. The Collateral Agent shall
transfer all income and distributions received by the Collateral Agent on
account of the Pledged Notes or Permitted Investments from time to time held in
the Collateral Account (ABA No. [_________], A/C No. [________], Re: [________],
Attention: [___________]) to the Purchase Contract Agent for distribution to the
applicable Holders as provided in the Purchase Contracts or Purchase Contract
Agreement.
Section 3.02. Principal Payments Following Termination Event. Following
a Termination Event, the Collateral Agent shall transfer all principal payments
it receives, if any, in respect of (a) the Pledged Notes and (b) the Pledged
Treasury Securities, to the Purchase Contract Agent for the benefit of the
applicable Holders for distribution to such Holders in accordance with their
respective interests, free and clear of the Pledge created hereby.
Section 3.03. Principal Payments Prior to or on Purchase Contract
Settlement Date.
(a) Subject to the provisions of Section 5.06, and except as provided
in subsection (b) of this Section, if no Termination Event shall have occurred,
all principal payments received by the Collateral Agent in respect of (1) the
Pledged Notes or (2) the Pledged Treasury Securities, shall be held and invested
in Permitted Investments until the Purchase Contract Settlement Date, and
transferred to the Company on the Purchase Contract Settlement Date as provided
in Section 5.07 hereof. Any balance remaining in the Collateral Account shall be
released from the Pledge and transferred to the Purchase Contract Agent for the
benefit of the applicable Holders for distribution to such Holders in accordance
with their respective interests, free and clear of the Pledge created thereby.
The Company shall instruct the Collateral Agent in writing as to the type of
Permitted Investments in which any payments made under this Section shall be
invested, provided, however, that if the Company fails to deliver such
instructions by 10:30 a.m. (New York City time) on the day such payments are
received by the Collateral Agent,
6
the Collateral Agent shall invest such payments in the Permitted Investments
described in clause (6) of the definition of Permitted Investments. In no event
shall the Collateral Agent be liable for the selection of Permitted Investments
or for investment losses incurred thereon. The Collateral Agent shall have no
liability in respect of losses incurred as a result of the failure of the
Company to provide timely written investment direction.
(b) All principal payments received by the Collateral Agent in respect
of (1) the Pledged Notes and (2) the Treasury Securities or security
entitlements thereto, that, in each case, have been released from the Pledge
pursuant hereto shall be transferred to the Purchase Contract Agent for the
benefit of the applicable Holders for distribution to such Holders in accordance
with their respective interests.
Section 3.04. Payments to Purchase Contract Agent. The Collateral Agent
shall use all commercially reasonable efforts to deliver payments required to be
made to the Purchase Contract Agent hereunder to the account designated by the
Purchase Contract Agent for such purpose not later than 12:00 p.m. (New York
City time) on the Business Day such payment is received by the Collateral Agent;
provided, however, that if such payment is received on a day that is not a
Business Day or after 11:00 a.m. (New York City time) on a Business Day, then
the Collateral Agent shall use all commercially reasonable efforts to deliver
such payment to the Purchase Contract Agent no later than 10:30 a.m. (New York
City time) on the next succeeding Business Day.
Section 3.05. Assets Not Properly Released. If the Purchase Contract
Agent or any Holder shall receive any principal payments on account of financial
assets credited to the Collateral Account and not released therefrom in
accordance with this Agreement, the Purchase Contract Agent or such Holder shall
hold the same as trustee of an express trust for the benefit of the Company and,
upon receipt of an Officers' Certificate of the Company so directing, promptly
deliver the same to the Collateral Agent for credit to the Collateral Account or
to the Company for application to the Obligations of the Holders, and the
Purchase Contract Agent and Holders shall acquire no right, title or interest in
any such payments of principal amounts so received. The Purchase Contract Agent
shall have no liability under this Section 3.05 unless and until it has been
notified in writing that such payment was delivered to it erroneously and shall
have no liability for any action taken, suffered or omitted to be taken prior to
its receipt of such notice.
ARTICLE IV
CONTROL
Section 4.01. Establishment of Collateral Account. The Securities
Intermediary hereby confirms that:
(a) the Securities Intermediary has established the Collateral Account;
(b) the Collateral Account is a securities account;
(c) subject to the terms of this Agreement, the Securities Intermediary
shall identify in its records the Collateral Agent as the entitlement holder
entitled to exercise the rights that comprise any financial asset credited to
the Collateral Account;
7
(d) all property delivered to the Securities Intermediary pursuant to
this Agreement or the Purchase Contract Agreement will be credited promptly to
the Collateral Account; and
(e) all securities or other property underlying any financial assets
credited to the Collateral Account shall be (1) registered in the name of Cede &
Co., as nominee for DTC, and endorsed to the Collateral Agent or in blank, (2)
registered in the name of the Collateral Agent or (3) credited to another
securities account maintained in the name of the Collateral Agent. The
Collateral Agent may, at any time or from time to time, in its sole discretion,
cause any or all securities or other property underlying any financial assets
credited to the Collateral Account not registered in its name to be so
registered in its name. In no case will any financial asset credited to the
Collateral Account be registered in the name of the Purchase Contract Agent or
any Holder or specially endorsed to the Purchase Contract Agent or any Holder.
Section 4.02. Treatment as Financial Assets. 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.
Section 4.03. Sole Control by Collateral Agent. Except as provided in
Section 6.01, at all times prior to the termination of the Pledge, the
Collateral Agent shall have sole control of the Collateral Account, and the
Securities Intermediary shall take instructions and directions with respect to
the Collateral Account solely from the Collateral Agent. If at any time the
Securities Intermediary shall receive an entitlement order issued by the
Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Purchase Contract Agent or any Holder or any other Person. Except as
otherwise permitted under this Agreement, until termination of the Pledge, the
Securities Intermediary will not comply with any entitlement orders issued by
the Purchase Contract Agent or any Holder.
Section 4.04. Securities Intermediary's Location. The Collateral
Account, and the rights and obligations of the Securities Intermediary, the
Collateral Agent, the Purchase Contract Agent and the Holders with respect
thereto, shall be governed by the laws of the State of New York, without giving
effect to the conflicts of law provisions thereof. Regardless of any provision
in any other agreement, for purposes of the UCC, New York shall be deemed to be
the Securities Intermediary's location.
Section 4.05. No Other Claims. Except for the claims and interest of
the Collateral Agent and of the Purchase Contract Agent and the Holders in the
Collateral Account, the Securities Intermediary (without any duty to
investigate) does not know of any claim to, or interest in, the Collateral
Account or in any financial asset credited thereto. If any Person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against the Collateral
Account or in any financial asset carried therein, the Securities Intermediary
will promptly notify the Collateral Agent and the Purchase Contract Agent.
Section 4.06. Investment and Release. All Proceeds of financial assets
from time to time deposited in the Collateral Account shall be invested and
reinvested as provided in
8
this Agreement. At all times prior to termination of the Pledge, no property
shall be released from the Collateral Account except in accordance with this
Agreement or upon written instructions of the Collateral Agent.
Section 4.07. Statements and Confirmations. The Securities Intermediary
will promptly send copies of all statements, confirmations and other
correspondence concerning the Collateral Account and any financial assets
credited thereto simultaneously to each of the Purchase Contract Agent and the
Collateral Agent at their addresses for notices under this Agreement.
Section 4.08. Tax Allocations. The Purchase Contract Agent shall report
all items of income, gain, expense and loss recognized in the Collateral
Account, to the extent such reporting is required by law, to the Internal
Revenue Service or applicable state authorities in the manner required by law.
Neither the Securities Intermediary nor the Collateral Agent shall have any tax
reporting duties hereunder.
Section 4.09. No Other Agreements. The Securities Intermediary has not
entered into, and prior to the termination of the Pledge will not enter into,
any agreement with any other Person relating to the Collateral Account or any
financial assets credited thereto, including, without limitation, any agreement
to comply with entitlement orders of any Person other than the Collateral Agent.
Section 4.10. Powers Coupled with an Interest. The rights and powers
granted in this Article 4 to the Collateral Agent have been granted in order to
perfect its security interests in the Collateral Account, are powers coupled
with an interest and will be affected neither by the bankruptcy of the Purchase
Contract Agent or any Holder nor by the lapse of time. The obligations of the
Securities Intermediary under this Article 4 shall continue in effect until the
termination of the Pledge.
Section 4.11. Waiver of Lien; Waiver of Set-off. The Securities
Intermediary waives any security interest, lien or right to make deductions or
setoffs that it may now have or hereafter acquire in or with respect to the
Collateral Account, any financial asset credited thereto or any security
entitlement in respect thereof. Neither the financial assets credited to the
Collateral Account nor the security entitlements in respect thereof will be
subject to deduction, set-off, banker's lien, or any other right in favor of any
Person other than the Company.
ARTICLE V
INITIAL DEPOSIT; CREATION OF TREASURY UNITS AND RECREATION OF
CORPORATE UNITS
Section 5.01. Initial Deposit of Notes. (a) Prior to or concurrently
with the execution and delivery of this Agreement, the Purchase Contract Agent,
on behalf of the initial Holders of the Corporate Units, shall Transfer to the
Collateral Agent, for credit to the Collateral Account, the Notes or security
entitlements relating thereto, and, in the case of security entitlements, the
Securities Intermediary shall indicate by book-entry that a securities
entitlement to such Notes has been credited to the Collateral Account.
9
(a) The Collateral Agent agrees to hold any Notes or security interests
relating thereto, constituting a portion of the Collateral registered in the
name of the Purchase Contract Agent, as attorney-in-fact for the Holders, with
appropriate endorsement in the form delivered to it and shall not re-register
such Notes or security interests relating thereto.
Section 5.02. Creation of Treasury Units.
(a) A Holder of Corporate Units shall have the right, at any time prior
to 5:00 p.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, to create Treasury Units by
substitution of Treasury Securities or security entitlements with respect
thereto for the Pledged Notes comprising a part of such Holder's Corporate
Units, in integral multiples of 40 Corporate Units by:
(1) Transferring to the Securities Intermediary on behalf of the
Collateral Agent, for credit to the Collateral Account, Treasury
Securities or security entitlements with respect thereto having a Value
equal to the aggregate principal amount of the Pledged Notes to be
released, accompanied by a notice, substantially in the form of Exhibit
C to the Purchase Contract Agreement, whereupon the Purchase Contract
Agent shall deliver to the Collateral Agent a notice, substantially in
the form of Exhibit A hereto, (A) stating that such Holder has notified
the Purchase Contract Agent that such Holder has Transferred Treasury
Securities or security entitlements with respect thereto to the
Collateral Agent for credit to the Collateral Account, (B) stating the
Value of the Treasury Securities or security entitlements with respect
thereto Transferred by such Holder and (C) requesting that the
Collateral Agent release from the Pledge the Pledged Notes that are a
component of such Corporate Units; and
(2) delivering the related Corporate Units to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Treasury Securities or
security entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice, substantially in the form
of Exhibit B, to release such Pledged Notes from the Pledge by Transfer to
the Purchase Contract Agent for distribution to such Holder, free and clear
of the Pledge created hereby.
(b) Upon credit to the Collateral Account of Treasury Securities or
security entitlements with respect thereto delivered by a Holder of Corporate
Units and receipt of the related instruction from the Collateral Agent, the
Securities Intermediary shall release such Pledged Notes and shall promptly
Transfer the same to the Purchase Contract Agent for distribution to such
Holder, free and clear of the Pledge created hereby.
Section 5.03. Recreation of Corporate Units.
(a) At any time prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, a
Holder of Treasury Units shall have the right to recreate Corporate Units by
substitution of Notes or security entitlements
10
with respect thereto for Pledged Treasury Securities in integral multiples of 40
Treasury Units by:
(1) Transferring to the Securities Intermediary on behalf of the
Collateral Agent, for credit to the Collateral Account, Notes or
security entitlements with respect thereto having a principal amount
equal to the Value of the Pledged Treasury Securities to be released,
accompanied by a notice, substantially in the form of Exhibit C to the
Purchase Contract Agreement, whereupon the Purchase Contract Agent
shall deliver to the Collateral Agent a notice, substantially in the
form of Exhibit C hereto, stating that such Holder has Transferred the
Notes or security entitlements with respect thereto to the Collateral
Account for credit to the Collateral Account and requesting that the
Collateral Agent release from the Pledge the Pledged Treasury
Securities related to such Treasury Units; and
(2) delivering the related Treasury Units to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Notes or security
entitlements with respect thereto have been credited to the Collateral
Account as described in such notice, the Collateral Agent shall instruct
the Securities Intermediary by a notice substantially in the form of
Exhibit D hereto to release such Pledged Treasury Securities from the
Pledge by Transfer to the Purchase Contract Agent for distribution to such
Holder, free and clear of the Pledge created hereby.
(b) Upon credit to the Collateral Account of Notes or security
entitlements with respect thereto delivered by a Holder of Treasury Units and
receipt of the related instruction from the Collateral Agent, the Securities
Intermediary shall release such Pledged Treasury Securities and shall promptly
Transfer the same to the Purchase Contract Agent for distribution to such
Holder, free and clear of the Pledge created hereby.
Section 5.04. Termination Event.
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that a Termination Event has occurred,
the Collateral Agent shall release all Collateral from the Pledge and shall
promptly Transfer:
(1) any Pledged Notes or security entitlements with respect thereto,
(2) any Pledged Treasury Securities, and
(3) any payments by Holders (or the Permitted Investments of such
payments) pursuant to Section 5.05 hereof, to the Purchase Contract
Agent for the benefit of the Holders for distribution to such Holders,
in accordance with their respective interests, free and clear of the
Pledge created hereby.
(b) 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
Notes, Pledged Treasury Securities and payments by Holders (or the Permitted
Investments of such payments) pursuant to Section 5.05
11
hereof and Proceeds of any of the foregoing, as the case may be, as provided by
this Section 5.04, the Purchase Contract Agent shall:
(1) use its best efforts to obtain an opinion of a nationally
recognized law firm reasonably acceptable to the Collateral Agent to
the effect that, notwithstanding 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
5.04, and shall deliver or cause to be delivered such opinion to the
Collateral Agent within ten days after the occurrence of such
Termination Event, and if (A) the Purchase Contract Agent shall be
unable to obtain such opinion within ten days after the occurrence of
such Termination Event or (B) the Collateral Agent shall continue,
after delivery of such opinion, to refuse to effectuate the release and
Transfer of all Pledged Notes, Pledged Treasury Securities and the
payments by Holders (or the Permitted Investments of such payments)
pursuant to Section 5.05 hereof and Proceeds of any of the foregoing,
as the case may be, as provided in this Section 5.04, then the Purchase
Contract Agent shall within 15 days after the occurrence of such
Termination Event commence an action or proceeding in the court having
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 Notes, Pledged Treasury Securities and the
payments by Holders (or the Permitted Investments of such payments)
pursuant to Section 5.05 hereof and Proceeds of any of the foregoing,
or as the case may be, as provided by this Section 5.04; and
(2) commence an action or proceeding like that described in clause
5.04(b)(i) hereof within fifteen days after the occurrence of such
Termination Event.
Section 5.05. Cash Settlement.
(a) Upon receipt by the Collateral Agent of (1) a notice from the
Purchase Contract Agent promptly after the receipt by the Purchase Contract
Agent of a notice from a Holder of Corporate Units that such Holder has elected,
in accordance with the procedures specified in Section 5.02(b)(i) of the
Purchase Contract Agreement to effect a Cash Settlement and (2) payment by such
Holder by deposit in the Collateral Account prior to 5:00 p.m. (New York City
time) on the fourth Business Day immediately preceding the Purchase Contract
Settlement Date of the Purchase Price in lawful money of the United States of
America by certified or cashier's check or wire transfer of immediately
available funds payable to or upon the order of the Securities Intermediary,
then the Collateral Agent shall:
(1) instruct the Securities Intermediary promptly to invest any such
Cash in Permitted Investments;
(2) instruct the Securities Intermediary to release from the Pledge
such Holder's related Pledged Notes as to which such Holder has
effected a Cash Settlement pursuant to this Section 5.05(a); and
12
(3) instruct the Securities Intermediary to Transfer all such Pledged
Notes to the Purchase Contract Agent for distribution to such Holder,
in each case free and clear of the Pledge created hereby.
The Company shall instruct the Collateral Agent in writing as to the type
of Permitted Investments in which any such Cash shall be invested; provided,
however, that if the Company fails to deliver such written instructions by 10:30
a.m. (New York City time) on the day such Cash is received by the Collateral
Agent or to be reinvested by the Securities Intermediary, the Collateral Agent
shall instruct the Securities Intermediary to invest such Cash in the Permitted
Investments described in clause (6) of the definition of Permitted Investments.
In no event shall the Collateral Agent or Securities Intermediary be liable for
the selection of Permitted Investments or for investment losses incurred
thereon. The Collateral Agent and Securities Intermediary shall have no
liability in respect of losses incurred as a result of the failure of the
Company to provide timely written investment direction.
Upon receipt of the proceeds upon the maturity of the Permitted Investments
on the Purchase Contract Settlement Date, the Collateral Agent shall (A)
instruct the Securities Intermediary to pay the portion of such proceeds and
deliver any certified or cashier's checks received, in an aggregate amount equal
to the Purchase Price, to the Company on the Purchase Contract Settlement Date,
and (B) release any amounts in excess of the Purchase Price earned from such
Permitted Investments to the Purchase Contract Agent for distribution to such
Holder.
(b) If a Holder of Corporate Units (i) fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement as provided in Section
5.02(b)(i) of the Purchase Contract Agreement or (ii) does notify the Purchase
Contract Agent of its intention to pay the Purchase Price in cash, but fails to
make such payment as required by Section 5.02(b)(ii) of the Purchase Contract
Agreement, such Holder shall be deemed to have consented to the disposition of
such Holder's Pledged Notes in accordance with Section 5.02(b)(iii) of the
Purchase Contract Agreement.
(c) Intentionally Omitted.
(d) As soon as practicable after 5:00 p.m. (New York City time) on the
fourth Business Day immediately preceding the Purchase Contract Settlement Date,
the Collateral Agent shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit E hereto, stating (i) the amount of Cash
that it has received with respect to the Cash Settlement of Corporate Units and
(ii) the amount of Pledged Notes to be remarketed in the Remarketing pursuant to
Section 5.02(b)(iii) of the Purchase Contract Agreement.
Section 5.06. Early Settlement and Cash Merger Early Settlement. Upon
receipt by the Collateral Agent of a notice from the Purchase Contract Agent
that (a) a Holder of Units has elected to effect either (1) Early Settlement of
its obligations under the Purchase Contracts forming a part of such Units in
accordance with the terms of the Purchase Contracts and Section 5.07 of the
Purchase Contract Agreement or (2) Cash Merger Early Settlement of its
obligations under the Purchase Contracts forming a part of such Units in
accordance with the terms of the Purchase Contracts and Section 5.04(b)(2) of
the Purchase Contract Agreement (which notice shall set forth the number of such
Purchase Contracts as to which such Holder has elected to
13
effect Early Settlement or Cash Merger Early Settlement), and (b) the Purchase
Contract Agent has received from such Holder, and paid to the Company as
confirmed in writing by the Company, the related Early Settlement Amount or Cash
Merger Early Settlement Amount, as applicable, pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement or Cash Merger Early Settlement, as the case may be,
have been satisfied, then the Collateral Agent shall release from the Pledge,
(i) Pledged Notes in the case of a Holder of Corporate Units or (ii) Pledged
Treasury Securities in the case of a Holder of Treasury Units, in each case with
a Value equal to the product of (x) the Stated Amount times (y) the number of
Purchase Contracts as to which such Holder has elected to effect Early
Settlement or Cash Merger Early Settlement, and shall instruct the Securities
Intermediary to Transfer all such Pledged Notes or Pledged Treasury Securities,
as the case may be, to the Purchase Contract Agent for distribution to such
Holder, in each case free and clear of the Pledge created hereby. A holder of
Treasury Units may settle early only in integral multiples of 40 Treasury Units.
Section 5.07. Application of Proceeds in Settlement of Purchase
Contracts.
(a) If a Holder of Corporate Units has not elected to make an effective
Cash Settlement by notifying the Purchase Contract Agent in the manner provided
for in Section 5.02(b)(i) of the Purchase Contract Agreement or does notify the
Purchase Contract Agent as provided in Section 5.02(b)(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 5.02(b)(ii) of the Purchase Contract
Agreement, such Holder shall be deemed to have elected to pay for the shares of
Common Stock to be issued under such Purchase Contracts from the Proceeds of the
Remarketing of the related Pledged Notes. In such event, upon written direction
from the Purchase Contract Agent, the Remarketing Agent, pursuant to the terms
of the Remarketing Agreement, will use its reasonable efforts to remarket such
Pledged Notes. The Remarketing Agent will deposit the Proceeds of such
Remarketing (less, to the extent permitted by the Remarketing Agreement, the
Remarketing Fee) in the Collateral Account, and the Collateral Agent shall
invest the Proceeds of the Remarketing in Permitted Investments set forth in
clause (6) of the definition of Permitted Investments. In the event of a
Successful Remarketing, the Collateral Agent shall instruct the Securities
Intermediary to transfer the related Pledged Notes to the Remarketing Agent,
upon confirmation of deposit by the Remarketing Agent of the Proceeds of such
Final Remarketing (less, to the extent permitted by the Remarketing Agreement,
the Remarketing Fee) in the Collateral Account. On the Purchase Contract
Settlement Date, the Purchase Contract Agent shall consult with the Collateral
Agent regarding the instruction the Collateral Agent shall give to the
Securities Intermediary in order to apply a portion of the Proceeds from such
Remarketing equal to the aggregate principal amount of such Pledged Notes, less
the amount of any Deferred Contract Adjustment Payments payable to such Holder
on the Purchase Contract Settlement Date, to satisfy in full such Holder's
obligations to pay the Purchase Price to purchase the shares of Common Stock
under the related Purchase Contracts and the balance of the Proceeds from the
Remarketing, if any, that shall be transferred to the Purchase Contract Agent
for distribution to such Holder.
Upon a Failed Remarketing, each Holder of Corporate Units that has not
elected to make an effective Cash Settlement by notifying the Purchase Contract
Agent in the manner provided for in Section 5.02(b)(i) or Section 5.02(d)(i) of
the Purchase Contract Agreement or does notify
14
the Purchase Contract Agent as provided in Section 5.02(b)(i) or Section
5.02(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 Sections
5.02(b)(ii) or Section 5.02(d)(ii) of the Purchase Contract Agreement, as
applicable, shall be deemed to have exercised such Holder's Put Right with
respect to such Notes that are a component of Corporate Units. Upon exercise of
the Put Right with respect to the Notes, the Company shall on the Purchase
Contract Settlement Date cause the aggregate Put Price with respect to such
Notes to be deposited in the Collateral Account and the Collateral Agent shall
cause the Securities Intermediary to remit the Purchase Price for the shares of
Common Stock to be issued under the related Purchase Contract from a portion of
the Proceeds of the Put Right to the Company in full satisfaction of such
Holder's obligations under the related Purchase Contract; provided that if the
Company shall fail to pay the Put Price when due, the Company shall be deemed to
have netted such Holder's obligations to pay the aggregate Purchase Price under
such Purchase Contracts against the Company's obligation to pay the Put Price in
full satisfaction of such Holder's obligations under the Purchase Contracts.
Following such payment or netting of the Put Price, such Holder's obligations to
pay the Purchase Price under the Purchase Contracts will be deemed to be
satisfied in full, and the Collateral Agent shall cause the Securities
Intermediary to release the Pledged Notes from the Collateral Account and shall
promptly deliver the Pledged Notes to the Company. Thereafter, the Collateral
Agent shall promptly remit the remaining portion, if any, of the Put Price in
excess of the aggregate Purchase Price under such Purchase Contracts to the
Purchase Contract Agent for payment to such Holder of the Corporate Units to
which such Notes relate.
If there has been a Failed Remarketing, as soon as practicable after
11:00 a.m. (New York City time) on the Business Day immediately preceding the
Purchase Contract Settlement Date, the Collateral Agent shall deliver to the
Purchase Contract Agent a notice, stating (i) the amount of Cash that it has
received with respect to the Cash Settlement of Corporate Units, (ii) the amount
of Cash that it has received with respect to the Cash Settlement of Treasury
Units and (iii) the amount of Pledged Notes with respect to which an automatic
deemed exercise of the Put Right has occurred pursuant to Section 5.02(c) of the
Purchase Contract Agreement.
(b) In the case of a Treasury Unit or a Corporate Unit, promptly, after
11:00 a.m. (New York City time) on the Business Day immediately prior to the
Purchase Contract Settlement Date, the Collateral Agent shall invest the Cash
Proceeds of the maturing Pledged Treasury Securities in Permitted Investments
set forth in clause (6) of the definition of Permitted Investments, unless prior
to 10:30 a.m. (New York City time) on such date, the Company shall otherwise
instruct the Collateral Agent in writing as to the type of Permitted Investments
in which any such Cash Proceeds shall be invested. In no event shall the
Collateral Agent be liable for the selection of Permitted Investments or for
investment losses incurred thereon. The Collateral Agent shall have no liability
in respect of losses incurred as a result of the failure of the Company to
provide timely written investment direction. Without receiving any instruction
from any such Holder, the Collateral Agent shall apply the Proceeds of the
related Pledged Treasury Securities to the settlement of such Purchase Contracts
on the Purchase Contract Settlement Date. In the event the sum of the Proceeds
from the related Pledged Treasury Securities and the investment earnings from
the investment in Permitted Investments exceeds the aggregate Purchase Price of
the Purchase Contracts being settled thereby, less the amount of any Deferred
Contract Adjustment Payments payable to such Holder on the Purchase Contract
15
Settlement Date, the Collateral Agent shall instruct the Securities Intermediary
to transfer such excess, when received, to the Purchase Contract Agent for
distribution to such Holder.
(c) Prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Remarketing Date, but no earlier than the Payment Date
immediately preceding such date, Holders of Separate Notes may elect to have
their Separate Notes remarketed under the Remarketing Agreement, by delivering
their Separate Notes along with a notice of such election, substantially in the
form of Exhibit F hereto, to the Custodial Agent. After such time, such election
shall become an irrevocable election to have such Separate Notes remarketed in
the Remarketing. The Custodial Agent shall hold Separate Notes in an account
separate from the Collateral Account in which the Pledged Securities shall be
held. Holders of Separate Notes electing to have their Separate Notes remarketed
will also have the right to withdraw that election by written notice to the
Custodial Agent, substantially in the form of Exhibit G hereto, prior to 5:00
p.m. (New York City time) on the fifth Business Day immediately preceding the
Remarketing Date, upon which notice the Custodial Agent shall return such
Separate Notes to such Holder.
By 5:00 p.m. (New York City time) on the Business Day immediately
preceding the Remarketing Date, the Custodial Agent shall notify the Remarketing
Agent of the aggregate principal amount of the Separate Notes to be remarketed
and deliver to the Remarketing Agent for remarketing all Separate Notes
delivered to the Custodial Agent pursuant to this Section 5.07(c) and not
validly withdrawn prior to such date. In the event of a Successful Remarketing,
after deducting the Remarketing Fee (to the extent permitted under the terms of
the Remarketing Agreement), the Remarketing Agent will remit to the Custodial
Agent the remaining portion of the proceeds of such Remarketing for payment to
the Holders of the remarketed Separate Notes, in accordance with their
respective interests. In the event of a Failed Remarketing, the Remarketing
Agent will promptly return such Separate Notes to the Custodial Agent, and the
Custodial Agent shall deliver such Separate Notes to the appropriate Holders.
ARTICLE VI
VOTING RIGHTS - PLEDGED NOTES
Section 6.01. Voting Rights. Subject to the terms of Section 4.02 of
the Purchase Contract Agreement, the Purchase Contract Agent may exercise, or
refrain from exercising, any and all voting and other consensual rights
pertaining to the Pledged Notes or any part thereof for any purpose not
inconsistent with the terms of this Agreement and in accordance with the terms
of the Purchase Contract Agreement; provided, that the Purchase Contract Agent
shall not exercise or shall not refrain from exercising such right, as the case
may be, if, in the judgment of the Purchase Contract Agent, such action would
impair or otherwise have a material adverse effect on the value of all or any of
the Pledged Notes; and provided, further, that the Purchase Contract Agent shall
give the Company and the Collateral Agent at least five Business Days' prior
written notice of the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of any notices and
other communications in respect of any Pledged Notes, including notice of any
meeting at which holders of the Notes are entitled to vote or solicitation of
consents, waivers or proxies of holders of the Notes, the Collateral Agent shall
use reasonable efforts to send promptly to the Purchase
16
Contract Agent such notice or communication, and as soon as reasonably
practicable after receipt of a written request therefor from the Purchase
Contract Agent, execute and deliver to the Purchase Contract Agent such proxies
and other instruments in respect of such Pledged Notes (in form and substance
satisfactory to the Collateral Agent) as are prepared by the Company and
delivered to the Purchase Contract Agent with respect to the Pledged Notes.
ARTICLE VII
RIGHTS AND REMEDIES
Section 7.01. Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies specified in Section 5.07
hereof or otherwise available at law or in equity, after a default or 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 UCC
(whether or not the UCC 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, (1) retention of the Pledged Notes or
Pledged Treasury Securities or (2) sale of the Pledged Notes or Pledged Treasury
Securities in one or more public or private sales, and in each instance, the
Holders' obligations under the Purchase Contracts and the Purchase Contract
Agreement shall be deemed to have been satisfied in full.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of principal payments of any Pledged
Treasury Securities as provided in Article 3 hereof, in satisfaction of the
Obligations of the Holder of the Units of which such Pledged Treasury
Securities, are 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 any and all of the rights and remedies available to a
secured party under the UCC and the TRADES Regulations after default by a
debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of
the Pledged Notes, and (ii) the principal amount of the Pledged Treasury
Securities, subject, in each case, to the provisions of Article 3 hereof, and as
otherwise granted herein.
(d) The Purchase Contract Agent, individually or as attorney-in-fact,
and each Holder of Units agrees that, from time to time, upon the written
request of the Collateral Agent or the Purchase Contract Agent, 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
17
for executing any documents or taking any such acts requested by the Collateral
Agent hereunder, except for liability for its own grossly negligent acts, its
own grossly negligent failure to act or its own willful misconduct.
Section 7.02. Successful Remarketing. With respect to Separate Notes,
any Proceeds of the Remarketing (after deducting any Remarketing Fee to the
extent permitted under the terms of the Remarketing Agreement) attributable to
the Separate Notes will be remitted to the Custodial Agent for payment to the
holders of Separate Notes.
Section 7.03. Substitutions. Whenever a Holder has the right to
substitute Treasury Securities, Notes or security entitlements for any of them,
as the case may be, for financial assets held in the Collateral Account, such
substitution shall not constitute a novation of the security interest created
hereby.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 8.01. Representations and Warranties. Each Holder from time to
time, acting through the Purchase Contract Agent as 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 represents
and warrants to the Collateral Agent (with respect to such Holder's interest in
the Collateral), 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 for credit to the Collateral
Account, 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 Article 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral Agent for
credit to the Collateral Account, the Collateral Agent, for the benefit of the
Company, will have a valid and perfected first priority security interest
therein (assuming that any central clearing operation or any securities
intermediary or other entity not within the control of the Holder involved in
the Transfer of the Collateral, including the Collateral Agent and the
Securities Intermediary, 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 Article 4 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 Article 2 hereof or violate any provision of any existing law
or regulation applicable to it or of any mortgage, charge,
18
pledge, indenture, contract or undertaking to which it is a party or which is
binding on it or any of its assets.
Section 8.02. Covenants. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other security interest whatsoever over the Collateral or any part of it other
than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the Pledge hereunder,
transferred in connection with the Transfer of the Units.
ARTICLE IX
THE COLLATERAL AGENT, THE CUSTODIAL AGENT
AND THE SECURITIES INTERMEDIARY
It is hereby agreed as follows:
Section 9.01. Appointment, Powers and Immunities. The Collateral Agent,
the Custodial Agent or Securities Intermediary shall act as agent for the
Company hereunder with such powers as are specifically vested in the Collateral
Agent, the Custodial Agent or Securities Intermediary, as the case may be, by
the terms of this Agreement. The Collateral Agent, the Custodial Agent and
Securities Intermediary shall:
(a) 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 the Collateral Agent, the Custodial Agent and Securities
Intermediary, nor shall the Collateral Agent, the Custodial Agent and Securities
Intermediary be bound by the provisions of any agreement by any party hereto
beyond the specific terms hereof;
(b) not be responsible for any recitals contained in this Agreement, or
in any certificate or other document referred to or provided for in, or received
by it under, this Agreement, the Units or the Purchase Contract Agreement, or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement (other than as against the Collateral Agent, the
Custodial Agent or Securities Intermediary, as the case may be), the Units, any
Collateral 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 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;
19
(c) not be required to initiate or conduct any litigation or collection
proceedings hereunder (except pursuant to directions furnished under Section
9.02 hereof, subject to Section 9.08 hereof);
(d) not be responsible for any action taken or omitted to be taken by
it hereunder or under any other document or instrument referred to or provided
for herein or in connection herewith or therewith, except for its own
negligence, bad faith or willful misconduct; and
(e) not be required to advise any party as to selling or retaining, or
taking or refraining from taking any action with respect to, any securities or
other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall take all
reasonable action in connection with the safekeeping of the Collateral
hereunder.
No provision of this Agreement shall require the Collateral Agent,
Custodial Agent or 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, Custodial Agent or Securities
Intermediary be liable for any amount in excess of the Value of the Collateral.
Section 9.02. Instructions of the Company. The Company shall have the
right, by one or more written instruments executed and delivered to the
Collateral Agent, 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,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (a) such direction shall not conflict
with the provisions of any law or of this Agreement or involve the Collateral
Agent in personal liability and (b) the Collateral Agent shall be indemnified to
its satisfaction as provided herein. Nothing contained in this Section 9.02
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 9.03. Reliance by Collateral Agent and Securities Intermediary.
Each of the Securities Intermediary, the Custodial Agent and the Collateral
Agent shall be entitled to rely conclusively upon any certification, order,
judgment, opinion, notice or other written communication (including, without
limitation, any thereof by e-mail or similar electronic means, telecopy, telex
or facsimile) reasonably believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons (without
being required to determine the correctness of any fact stated therein) and
consult with and conclusively rely upon advice, opinions 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.
20
Section 9.04. Certain Rights. (a) Whenever in the administration of the
provisions of this Agreement the Collateral Agent, the Custodial Agent or the
Securities Intermediary shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering any action to be taken
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of gross negligence, bad faith or
willful misconduct on the part of the Collateral Agent, the Custodial Agent or
the Securities Intermediary, be deemed to be conclusively proved and established
by a certificate signed by one of the Company's officers, and delivered to the
Collateral Agent, the Custodial Agent or the Securities Intermediary and such
certificate, in the absence of gross negligence, bad faith or willful misconduct
on the part of the Collateral Agent, the Custodial Agent or the Securities
Intermediary, shall be full warrant to the Collateral Agent, the Custodial Agent
or the Securities Intermediary for any action taken, suffered or omitted by it
under the provisions of this Agreement upon the faith thereof.
(b) The Collateral Agent, the Custodial Agent or the Securities
Intermediary shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, entitlement order, approval or other paper or
document.
Section 9.05. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Collateral Agent, the Custodial Agent or the
Securities Intermediary may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Collateral Agent, the Custodial Agent or the
Securities Intermediary shall be a party, or any corporation succeeding to the
business of the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall be the successor of the Collateral Agent, the Custodial Agent
or the Securities Intermediary hereunder without the execution or filing of any
paper with any party hereto or any further act on the part of any of the parties
hereto except where an instrument of transfer or assignment is required by law
to effect such succession, anything herein to the contrary notwithstanding.
Section 9.06. 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 Company, the Purchase Contract Agent, any other
Person interested herein and any Holder of Units (and any of their respective
subsidiaries or affiliates) as if they 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, the Securities Intermediary and their
affiliates may accept fees and other consideration from the Company, the
Purchase Contract Agent and any Holder of Units 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 other than the lien created by the Pledge.
21
Section 9.07. Non-Reliance on the Collateral Agent, the Custodial Agent and
the Securities Intermediary. None of the Securities Intermediary, the Custodial
Agent or the Collateral Agent shall be required to keep itself informed as to
the performance or observance by the Purchase Contract Agent or any Holder of
Units of this Agreement, the Purchase Contract Agreement, the Units or any other
document referred to or provided for herein or therein or to inspect the
properties or books of the Purchase Contract Agent or any Holder of Units. None
of the Collateral Agent, the Custodial Agent or the Securities Intermediary
shall 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 Units (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 9.08. Compensation and Indemnity. The Company agrees to:
(a) pay the Collateral Agent, the Custodial Agent and the Securities
Intermediary from time to time such compensation as shall be agreed in writing
between the Company and the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, for all services rendered by them
hereunder;
(b) indemnify, defend and hold harmless the Collateral Agent, the Custodial
Agent, the Securities Intermediary and each of their respective directors,
officers, agents and employees (collectively, the "Indemnitees"), harmless from
and against any and all claims, liabilities, losses, damages, fines, penalties
and expenses (including reasonable fees and expenses of counsel) (collectively,
"Losses" and individually, a "Loss") that may be imposed on, reasonably incurred
by, or asserted against, the Indemnitees or any of them for following any
instructions or other directions upon which any of the Indemnitees is entitled
to rely pursuant to the terms of this Agreement, provided that such Indemnitee
has not acted with gross negligence or bad faith or engaged in willful
misconduct with respect to the specific Loss against which indemnification is
sought; and
(c) in addition to and not in limitation of subsection (b) of this Section,
indemnify and hold the Indemnitees and each of them harmless from and against
any and all Losses that may be imposed on, incurred by or asserted against, the
Indemnitees or any of them in connection with or arising out of the Collateral
Agent's, the Custodial Agent's or the Securities Intermediary's acceptance,
performance or exercise of its rights, powers and duties under this Agreement,
provided the Collateral Agent, the Custodial Agent or the Securities
Intermediary has not acted with negligence or bad faith or engaged in willful
misconduct with respect to the specific Loss against which indemnification is
sought.
The provisions of this Section and Section 11.07 shall survive the
resignation or removal of the Collateral Agent, Custodial Agent or Securities
Intermediary and the termination of this Agreement.
Section 9.09. 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, then at its sole option, each of the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall be
22
entitled, after prompt notice to the Company and the Purchase Contract Agent, 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 the Collateral Agent, the Custodial Agent and the Securities Intermediary
shall not 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, the Custodial Agent and the Securities
Intermediary shall be entitled to refuse to act until either:
(a) 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, the Custodial Agent or the Securities Intermediary; or
(b) the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall have received security or an indemnity satisfactory to it
sufficient to save it harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which it may incur by reason of its acting at
the expense of the Company.
The Collateral Agent, the Custodial Agent and the Securities
Intermediary may in addition elect to commence an interpleader action or seek
other judicial relief or orders as the Collateral Agent, the Custodial Agent or
the Securities Intermediary may deem necessary. Notwithstanding anything
contained herein to the contrary, none of the Collateral Agent, the Custodial
Agent or the Securities Intermediary 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 9.10. Resignation of the Collateral Agent, the Custodial Agent and
the Securities Intermediary.
(a) Subject to the appointment and acceptance of a successor Collateral
Agent, Custodial Agent or Securities Intermediary as provided below:
(1) the Collateral Agent, the Custodial Agent and the Securities
Intermediary may resign at any time by giving notice thereof to the Company
and the Purchase Contract Agent as attorney-in-fact for the Holders of
Units;
(2) the Collateral Agent, the Custodial Agent and the Securities
Intermediary may be removed at any time by the Company; and
(3) if the Collateral Agent, the Custodial Agent or the Securities
Intermediary fails to perform any of its material obligations hereunder in
any material respect for a period of not less than 20 days after receiving
written notice of such failure by the Purchase Contract Agent and such
failure shall be continuing, the Collateral Agent, the Custodial Agent and
the Securities Intermediary may be removed by the Purchase Contract Agent,
acting at the direction of the Holders of a majority of the Units.
23
The Purchase Contract Agent shall promptly notify the Company of any
removal of the Collateral Agent, the Custodial Agent or the Securities
Intermediary pursuant to clause (3) of this Section 9.10(a). Upon any such
resignation or removal, the Company shall have the right to appoint a successor
Collateral Agent, Custodial Agent or Securities Intermediary, as the case may
be, which shall not be an Affiliate of the Purchase Contract Agent. If no
successor Collateral Agent, Custodial Agent or Securities Intermediary shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's, Custodial Agent's or Securities
Intermediary's giving of notice of resignation or the Company's or the Purchase
Contract Agent's giving notice of such removal, then the retiring or removed
Collateral Agent, Custodial Agent or Securities Intermediary may petition any
court of competent jurisdiction, at the expense of the Company, for the
appointment of a successor Collateral Agent, Custodial Agent or Securities
Intermediary. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall each be a bank or a national banking association which has an
office (or an agency office) in New York City with a combined capital and
surplus of at least $50,000,000. Upon the acceptance of any appointment as
Collateral Agent, Custodial Agent or Securities Intermediary hereunder by a
successor Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, such successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, and the
retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, shall take all appropriate action, subject to payment of any
amounts then due and payable to it hereunder, to transfer any money and property
held by it hereunder (including the Collateral) to such successor. The retiring
Collateral Agent, Custodial Agent or Securities Intermediary shall, upon such
succession, be discharged from its duties and obligations as Collateral Agent,
Custodial Agent or Securities Intermediary hereunder. After any retiring
Collateral Agent's, Custodial Agent's or Securities Intermediary's resignation
hereunder as Collateral Agent, Custodial Agent or Securities Intermediary, the
provisions of this Article 9 shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as the
Collateral Agent, Custodial Agent or Securities Intermediary. Any resignation or
removal of the Collateral Agent, Custodial Agent or Securities Intermediary
hereunder, at a time when such Person is acting as the Collateral Agent,
Custodial Agent or Securities Intermediary, shall be deemed for all purposes of
this Agreement as the simultaneous resignation or removal of the Collateral
Agent, Securities Intermediary or Custodial Agent, as the case may be.
(b) Since The Bank of New York is serving as the Collateral Agent hereunder
and the Purchase Contract Agent under the Purchase Contract Agreement, if an
event of default (other than an event of default occurring as a result of a
Final Remarketing) occurs hereunder or under the Purchase Contract Agreement,
The Bank of New York will resign as the Collateral Agent, but continue to act as
the Purchase Contract Agent. A successor Collateral Agent will be appointed in
accordance with the terms hereof.
Section 9.11. 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
24
this Section 9.11 shall be subject to prior written consent of the Company,
which consent shall not be unreasonably withheld.
Section 9.12. Survival. The provisions of this Article 9 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.
Section 9.13. Exculpation. Anything contained in this Agreement to the
contrary notwithstanding, in no event shall the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, directors, employees or
agents be liable under this Agreement to the Company or any third party for
indirect, special, punitive, or consequential loss or damage of any kind
whatsoever, including, but not limited to, 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 and regardless of
the form of action.
ARTICLE X
AMENDMENT
Section 10.01. Amendment Without Consent of Holders. Without the consent of
any Holders, the Company, when authorized by a Board Resolution, 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, to:
(a) evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company;
(b) evidence and provide for the acceptance of appointment hereunder by a
successor Collateral Agent, Custodial Agent, Securities Intermediary or Purchase
Contract Agent;
(c) add to the covenants of the Company for the benefit of the Holders, or
surrender any right or power herein conferred upon the Company, provided that
such covenants or such surrender do not adversely affect the validity,
perfection or priority of the Pledge created hereunder; or
(d) cure any ambiguity (or formal defect), correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, or make any other provisions with respect to such matters or questions
arising under this Agreement, provided that such action shall not adversely
affect the interests of the Holders in any material respect.
Section 10.02. 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, including without limitation the consent of the Holders obtained in
connection with a tender or an exchange offer, by Act of such Holders delivered
to the Company, the Purchase Contract Agent, the Custodial Agent, the Securities
Intermediary and the Collateral Agent, as the case may be,
25
the Company, when duly authorized by a Board Resolution, the Purchase Contract
Agent, the Collateral Agent, the Securities Intermediary and the Collateral
Agent may amend this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the rights of the Holders in respect of the
Units; provided, however, that no such supplemental agreement shall, without the
unanimous consent of the Holders of each Outstanding Unit adversely affected
thereby in any material respect:
(a) change the amount or type of Collateral underlying a Unit (except for
the rights of holders of Corporate Units to substitute the Treasury Securities
for the Pledged Notes, or the rights of Holders of Treasury Units to substitute
Notes for the Pledged Treasury Securities), unless such change is not adverse to
the Holders, impair the right of the Holder of any Unit to receive distributions
on the underlying Collateral or otherwise adversely affect the Holder's rights
in or to such Collateral; or
(b) otherwise effect any action that would require the consent of the
Holder of each Outstanding Unit affected thereby pursuant to the Purchase
Contract Agreement if such action were effected by a modification or amendment
of the provisions of the Purchase Contract Agreement; or
(c) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for the modification or amendment of the provisions of this
Agreement;
provided that if any amendment or proposal referred to above would adversely
affect only the Corporate Units or only the Treasury Units, then only the
affected class of Holders as of the record date for the Holders entitled to vote
thereon will be entitled to vote on such amendment or proposal, and such
amendment or proposal shall not be effective except with the consent of Holders
of not less than a majority of such class; provided, further, that the unanimous
consent of the Holders of each outstanding Purchase Contract of such class
affected thereby shall be required to approve any amendment or proposal
specified in clauses (a) through (c) above.
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 10.03. Execution of Amendments. In executing any amendment
permitted by this Article, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 7.01 of the Purchase Contract Agreement with
respect to the Purchase Contract Agent) shall be fully authorized and 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. The Collateral Agent, Custodial Agent, Securities Intermediary and
Purchase Contract Agent may, but shall not be obligated to, enter into any such
amendment which affects their own respective rights, duties or immunities under
this Agreement or otherwise.
Section 10.04. Effect of Amendments. Upon the execution of any amendment
under this Article, this Agreement shall be modified in accordance therewith,
and such
26
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 10.05. Reference of Amendments. Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Section may, and shall if required by the Collateral
Agent or the Purchase Contract Agent, bear a notation in form approved by the
Purchase Contract Agent and the Collateral Agent as to any matter provided for
in such amendment. If the Company shall so determine, new 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 Certificates representing Outstanding Units.
ARTICLE XI
MISCELLANEOUS
Section 11.01. No Waiver. No failure on the part of the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary or any of
their respective 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 Company,
the Collateral Agent, the Custodial Agent, the Securities Intermediary or any of
their respective 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 11.02. Governing Law; Submission to Jurisdiction. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK. The Company, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Holders from time to time of the Units, acting through the
Purchase Contract Agent as their attorney-in-fact, hereby submit to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York state court sitting in 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, the Custodial Agent, the Securities Intermediary and the Holders from
time to time of the Units, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
Section 11.03. 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
27
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 11.04. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the Units,
by their acceptance of the same, shall be deemed to have agreed to be bound by
the provisions hereof and to have ratified the agreements of, and the grant of
the Pledge hereunder by, the Purchase Contract Agent.
Section 11.05. 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 11.06. 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 11.07. Expenses, Etc. The Company agrees to reimburse the
Collateral Agent, the Custodial Agent and the Securities Intermediary for:
(a) all reasonable costs and expenses of the Collateral Agent, the
Custodial Agent and the Securities Intermediary (including, without limitation,
the reasonable fees and expenses of counsel to the Collateral Agent, the
Custodial Agent and the Securities Intermediary), reasonably incurred in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver of
any of the terms of this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent, the
Custodial Agent and the Securities Intermediary (including, without limitation,
reasonable fees and expenses of counsel) reasonably incurred in connection with
(i) any enforcement or proceedings resulting or incurred in connection with
causing any Holder of Units to satisfy its obligations under the Purchase
Contracts forming a part of the Units and (ii) the enforcement of this Section
11.07;
(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 reasonably incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated hereby;
28
(d) all reasonable fees and expenses of any agent or advisor appointed by
the Collateral Agent and consented to by the Company under Section 9.11 of this
Agreement;
(e) any out-of-pocket costs and expenses reasonably incurred by the
Collateral Agent, the Custodial Agent, and the Securities Intermediary in
connection with the exercise of their rights or performance of their obligations
and duties under Section 9.10 hereof; and
(f) any other reasonable out-of-pocket costs and expenses reasonably
incurred by the Collateral Agent, the Custodial Agent and the Securities
Intermediary in connection with the performance of their duties hereunder.
Section 11.08. Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the Purchase
Contracts or the Units or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of the Units under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
[SIGNATURES ON THE FOLLOWING PAGE]
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TEEKAY SHIPPING CORPORATION THE BANK OF NEW YORK, as Purchase
Contract Agent and as attorney-in-fact of the
Holders from time to time of the Units
By: By:
--------------------------------------------------- ---------------------------------------------------
Name: Name:
------------------------------------------------- -------------------------------------------------
Title: Title:
------------------------------------------------ ------------------------------------------------
Address for Notices: Address for Notices:
Teekay Shipping Corporation The Bank of New York
550 Burrand Street 101 Barclay Street
Suite 2200, Bentall 5 New York, New York 10286
Vancouver, British Columbia Fax: (212) 815-5802/03
V6C 2K2 Attention: Corporate Trust Division
THE BANK OF NEW YORK,
as Collateral Agent, Custodial Agent and
Securities Intermediary
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
Address for Notices:
The Bank of New York
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division
30
EXHIBIT A
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Creation of Treasury Units)
The Bank of New York
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division
Re: _______ Corporate Units of Teekay Shipping Corporation (the "Company")
The securities account of The Bank of New York, as Collateral
Agent, maintained by the Securities Intermediary and
designated The Bank of New York, as Collateral Agent of Teekay
Shipping Corporation, as pledgee of The Bank of New York, as
the Purchase Contract Agent on behalf of and as
attorney-in-fact for the Holders" (the "Collateral Account")
Please refer to the Pledge Agreement, dated as of February __,
2003 (the "Pledge Agreement"), among the Company, you, as
Collateral Agent, as Securities Intermediary and as Custodial
Agent and the undersigned, as Purchase Contract Agent and as
attorney-in-fact for the holders of Corporate Units from time
to time. Capitalized terms used herein but not defined shall
have the meaning set forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.02 of the Pledge
Agreement that the holder of securities named below (the "Holder") has elected
to substitute $__________ Value of Treasury Securities or security entitlements
with respect thereto in exchange for an equal Value of Pledged Notes relating to
_________ Corporate Units and has delivered to the undersigned a notice stating
that the Holder has Transferred such Treasury Securities or security
entitlements with respect thereto to the Securities Intermediary, for credit to
the Collateral Account.
A-1
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or security entitlements thereto have
been credited to the Collateral Account, to release to the undersigned an equal
Value of Pledged Notes in accordance with Section 5.02 of the Pledge Agreement.
Date: ___________ THE BANK OF NEW YORK,
as Purchase Contract Agent and as attorney-in-fact
of the Holders from time to time of the Units
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements with respect thereto for the Pledged Notes:
Name:
-----------------------------------------------
Social Security:
------------------------------------
or other Taxpayer Identification Number,
if any
----------------------------------------------
Address:
--------------------------------------------
A-2
EXHIBIT B
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Creation of Treasury Units)
The Bank of New York
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division
Re: __________ Corporate Units of Teekay Shipping Corporation (the
"Company") The securities account of The Bank of New York,
as Collateral Agent, maintained by the Securities
Intermediary and designated The Bank of New York, as
Collateral Agent of Teekay Shipping Corporation, as pledgee
of The Bank of New York, as the Purchase Contract Agent on
behalf of and as attorney-in-fact for the Holders" (the
"Collateral Account").
Please refer to the Pledge Agreement, dated as of February 3, 2003 (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary, The
Bank of New York, as Purchase Contract Agent and as attorney-in-fact for the
holders of Corporate Units from time to time, and the undersigned, as Collateral
Agent. Capitalized terms used herein but not defined shall have the meanings set
forth in the Pledge Agreement.
When you have confirmed that $__________ Value of Treasury Securities
or security entitlements thereto has been credited to the Collateral Account by
or for the benefit of _________, as Holder of Corporate Units (the "Holder"),
you are hereby instructed to release from the Collateral Account an equal Value
of Pledged Notes or security entitlements with respect thereto relating to
_______ Corporate Units of the Holder by Transfer to the Purchase Contract
Agent.
B-1
THE BANK OF NEW YORK,
as Collateral Agent
Dated: __________
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Please print name and address of Holder:
Name:
-----------------------------------
Social Security:
------------------------
or other Taxpayer Identification Number,
if any
---------------------------------
Address:
--------------------------------
B-2
EXHIBIT C
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Recreation of Corporate Units)
The Bank of New York
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division
Re:____________ Treasury Units of Teekay Shipping Corporation
(the "Company")
Please refer to the Pledge Agreement dated as of February __, 2003 (the
"Pledge Agreement"), among the Company, you, as Collateral Agent, as Securities
Intermediary, as Custodial Agent and the undersigned, as Purchase Contract Agent
and as attorney-in-fact for the holders of Treasury Units from time to time.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
We hereby notify you in accordance with Section 5.03(a) of the Pledge
Agreement that the holder of securities named below (the "Holder") has elected
to substitute $__________ Value of Notes or security entitlements with respect
thereto in exchange for $__________ Value of Pledged Treasury Securities and has
delivered to the undersigned a notice stating that the holder has Transferred
such Notes or security entitlements with respect thereto to the Securities
Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Notes or security entitlements with respect thereto have
been credited to the Collateral Account, to release to the undersigned
$__________ Value of Treasury Securities or security entitlements with respect
thereto related to _____ Treasury Units of such Holder in accordance with
Section 5.03(a) of the Pledge Agreement.
THE BANK OF NEW YORK
as Purchase Contract Agent
Dated:___________ By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
C-1
Please print name and address of Holder electing to substitute Notes or security
entitlements with respect thereto for Pledged Treasury Securities:
Name:
-----------------------------
Social Security:
------------------
or other Taxpayer Identification
Number, if any
--------------------
Address:
--------------------------
C-2
EXHIBIT D
INSTRUCTION FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Recreation of Corporate Units)
The Bank of New York
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division
Re:___________ Treasury Units of Teekay Shipping Corporation (the
"Company") The securities account of The Bank of New
York, as Collateral Agent, maintained by the
Securities Intermediary and designated The Bank of
New York, as Collateral Agent of Teekay Shipping
Corporation, as pledgee of The Bank of New York, as
the Purchase Contract Agent on behalf of and as
attorney-in-fact for the Holders" (the "Collateral
Account").
Please refer to the Pledge Agreement dated as of February __, 2003 (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary,
Custodial Agent and Collateral Agent and The Bank of New York, as Purchase
Contract Agent and as attorney-in-fact for the holders of Corporate Units from
time to time, and the undersigned, as Collateral Agent. Capitalized terms used
herein but no defined shall have the meaning set forth in the Pledge Agreement.
When you have confirmed that $ __________ Value of Notes or security
entitlements with respect thereto has been credited to the Collateral Account by
or for the benefit of ________________, as Holder of Treasury Units (the
"Holder"), you are hereby instructed to release from the Collateral Account
$__________ Value of Treasury Securities or security entitlements thereto by
Transfer to the Purchase Contract Agent.
THE BANK OF NEW YORK
as Collateral Agent
Dated: ___________ By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Name:
-----------------------------
Social Security:
------------------
or other Taxpayer Identification
Number, if any
--------------------
Address:
--------------------------
D-1
EXHIBIT E
NOTICE OF CASH SETTLEMENT FROM COLLATERAL
AGENT TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
The Bank of New York
The Purchase Contract Agent
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division
Re: __________ Corporate Units of Teekay Shipping Corporation
(the "Company") __________ Treasury Units of the
Company
Please refer to the Pledge Agreement dated as of February __, 2003 (the
"Pledge Agreement"), by and among you, the Company, and The Bank of New York, as
Collateral Agent, Custodial Agent and Securities Intermediary. Unless otherwise
defined herein, terms defined in the Pledge Agreement are used herein as defined
therein.
In accordance with Section 5.05(d) of the Pledge Agreement, we hereby
notify you that as of 5:00 p.m. (New York City time) on the fourth Business Day
immediately preceding [_____________] (the "Purchase Contract Settlement Date"),
we have received (i) $ _______________ in immediately available funds paid in an
aggregate amount equal to the Purchase Price due to the Company on the Purchase
Contract Settlement Date with respect to ________________ Corporate Units and
(ii) based on the funds received set forth in clause (i) above, an aggregate
principal amount of $_________ of Pledged Notes are to be tendered for purchase
in the Remarketing.
THE BANK OF NEW YORK
as Collateral Agent
Dated: ___________ By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
E-1
EXHIBIT F
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
The Bank of New York
The Custodial Agent
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division
Re: Notes Due May 18, 2006 of Teekay Shipping Corporation (the "Company").
The undersigned hereby notifies you in accordance with Section 5.07(c)
of the Pledge Agreement, dated as of February __, 2003 (the "Pledge Agreement"),
among the Company, you, as Collateral Agent, Custodial Agent and Securities
Intermediary and The Bank of New York, as the Purchase Contract Agent and as
attorney-in-fact for the holders of Corporate Units from time to time, that the
undersigned elects to deliver $______________ aggregate principal amount of
Separate Notes for delivery to the Remarketing Agent prior to 5:00 p.m. (New
York City time) on the fifth Business Day immediately preceding the Remarketing
Date for remarketing pursuant to Section 5.07(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
Separate Notes tendered hereby. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
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 a
Failed Remarketing, upon receipt of the Separate Notes tendered herewith from
the Remarketing Agent, to deliver such Separate Notes to the person(s) and the
address(es) indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Separate Notes tendered hereby and that the undersigned is the
record owner of any Notes tendered herewith in physical form or a participant in
The Depositary Trust Company ("DTC") and the beneficial owner of any Notes
tendered herewith by book-entry transfer to your account at DTC, (ii) agrees to
be bound by the terms and conditions of Section 5.07(c) of the Pledge Agreement
and (iii) acknowledges and agrees that after 5:00 p.m. (New York City time) on
the fifth Business Day immediately preceding the Remarketing Date, such election
shall become an irrevocable election to have such Separate Notes remarketed in
the Remarketing and, in the case of a Failed Remarketing, in any subsequent
Remarketing, and that the Separate Notes tendered herewith will only be returned
in the event of a Failed Remarketing.
F-1
Date: ___________ By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Signature:
---------------------------
Guarantee:
---------------------------
Social Security or other Taxpayer
Identification Number, if any
-------------------------------------
Name:
--------------------------------
Address:
-----------------------------
F-2
A. PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
Name(s)
---------------------------------------------
(Please Print)
--------------------------------------
Address
---------------------------------------------
(Please Print)
--------------------------------------
(Zip Code)
------------------------------------------
(Tax Identification or Social Security Number)
- -----------------------------------------------------
B. DELIVERY INSTRUCTIONS
In the event of a failed final remarketing, Notes which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.
Name(s)
---------------------------------------------
(Please Print)
--------------------------------------
Address
---------------------------------------------
(Please Print)
--------------------------------------
(Zip Code)
------------------------------------------
(Tax Identification or Social Security Number)
- -----------------------------------------------------
In the event of a failed remarketing, Notes which are in book-entry form should
be credited to the account at The Depository Trust Company set forth below.
DTC Account Number
----------------------------------
Name of Account Party:
------------------------------
F-3
EXHIBIT G
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Bank of New York
The Custodial Agent
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division
Re: Notes due May 18, 2006 of Teekay Shipping Corporation (the "Company").
-------
The undersigned hereby notifies you in accordance with Section 5.07(c)
of the Pledge Agreement, dated as of February __, 2003 (the "Pledge Agreement"),
among the Company and you, as Collateral Agent, Custodial Agent and Securities
Intermediary, and The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the holders of Corporate Units from time to time, that the
undersigned elects to withdraw the $_________ aggregate principal amount of
Separate Notes delivered to the Collateral Agent on _________, 200_ for
remarketing pursuant to Section 5.07(c) of the Pledge Agreement. The undersigned
hereby instructs you to return such Notes to the undersigned in accordance with
the undersigned's instructions. With this notice, the Undersigned hereby agrees
to be bound by the terms and conditions of Section 5.07(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:
-----------------------------
Social Security or other Taxpayer
Identification Number, if any
---------------------------------------
Name:
----------------------------------
Address:
-------------------------------
G-1