Exhibit 4.3
PLEDGE AGREEMENT
DATED AS OF JULY 31, 2002
AMONG
THE ST. PAUL COMPANIES, INC.
AND
BNY MIDWEST TRUST COMPANY,
AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
JPMORGAN CHASE BANK,
AS PURCHASE CONTRACT AGENT
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PLEDGE AGREEMENT, dated as of July 31, 2002 (this "Agreement"), among
The St. Paul Companies, Inc., a Minnesota corporation (the "Company"), BNY
Midwest Trust Company, an Illinois trust company ("BNY Midwest Trust Company"),
not individually but solely as collateral agent (in such capacity, together with
its successors in such capacity, the "Collateral Agent"), as custodial agent (in
such capacity, together with its successors in such capacity, the "Custodial
Agent") and as "securities intermediary" as defined in Section 8-102(a)(14) of
the Code (as defined herein) (in such capacity, together with its successors in
such capacity, the "Securities Intermediary"), and JPMorgan Chase Bank, not
individually but solely as purchase contract agent and as attorney-in-fact of
the Holders (as defined in the Purchase Contract Agreement) from time to time of
the Securities (as hereinafter defined) (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under the Purchase
Contract Agreement (as hereinafter defined).
RECITALS
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 there may be issued 8,855,000 equity units of the
Company, each having a stated amount of $50 (the "Stated Amount") per equity
unit; and
WHEREAS, the equity units will initially consist of 8,855,000 units
(referred to as "Corporate Units") with a stated amount, per Corporate Unit,
equal to the Stated Amount. Each Corporate Unit will initially consist of (a) a
stock purchase contract (the "Purchase Contract") pursuant to which the Holder
will purchase from the Company not later than August 16, 2005 (the "Purchase
Contract Settlement Date"), for an amount in cash equal to the Stated Amount, a
number of newly issued shares of common stock, without par value (the "Common
Stock"), of the Company equal to the Settlement Rate and (b) either beneficial
ownership of a Note (as defined below) or, following a Successful Initial
Remarketing, a Successful Secondary Remarketing or a Tax Event Redemption, the
Applicable Ownership Interest in the Treasury Portfolio; and
WHEREAS, if Holders of Corporate Units substitute collateral as
contemplated by Section 4.1 hereof, each unit created thereby (collectively
referred to as "Treasury Units" and, together with the Corporate Units, the
"Securities") will initially consist of (a) a Purchase Contract pursuant to
which the Holders will purchase from the Company not later than the Purchase
Contract Settlement Date, for an amount in cash equal to the Stated Amount, a
number of newly issued shares of Common Stock of the Company, equal to the
Settlement Rate, and (b) a 1/20, or 5.0%, undivided beneficial ownership
interest in a zero-coupon U.S. Treasury security (CUSIP No. 912803AG8) having a
principal amount at maturity equal to $1,000 and maturing on August 15, 2005 (a
"Treasury Security"); and
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WHEREAS, pursuant to the terms of the Indenture (as defined below), the
Company will issue $442,750,000 aggregate principal amount of the Company's
5.25% senior notes due August 16, 2007 (the "Notes"), each having a principal
amount equal to $50; and
WHEREAS, pursuant to the terms of the Purchase Contract Agreement and
the Purchase Contracts, the Holders from time to time of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the Pledge provided hereby of the Notes, any
Applicable Ownership Interest in the Treasury Portfolio and the Pledged Treasury
Securities to secure each Holder's obligations under the related Purchase
Contracts, as provided herein and subject to the terms hereof; and
WHEREAS, upon such Pledge, the Pledged Notes or the Pledged Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, and the
Pledged Treasury Securities will be beneficially owned by the Holders but will
be owned of record by the Purchase Contract Agent or the Securities Intermediary
subject to the Pledge hereunder.
NOW THEREFORE, in consideration of the foregoing premises, the Company,
the Collateral Agent, the Securities Intermediary, the Custodial Agent and the
Purchase Contract Agent, on its own behalf and as attorney-in-fact for, and on
behalf of, the Holders from time to time of the Securities, agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(b) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not
to any particular Article, Section or other subdivision;
(c) initially capitalized terms used but not otherwise defined
herein have the meanings assigned to such terms in the
Purchase Contract Agreement; and
(d) the following terms have the meanings assigned to them in this
subsection (d):
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"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Bankruptcy Code" means Title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State of
New York) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the segregated securities account (number
188410) maintained at BNY Midwest Trust Company in the name of "JPMorgan Chase
Bank, as Purchase Contract Agent on behalf of the holders of certain securities
of The St. Paul Companies, Inc., Collateral Account subject to the security
interest of BNY Midwest Trust Company, as Collateral Agent, for the benefit of
The St. Paul Companies, Inc. as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this Agreement.
"Common Stock" has the meaning specified in the recitals of this
Agreement.
"Company" means the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Corporate Unit" has the meaning specified in the recitals of this
Agreement.
"Custodial Agent" has the meaning specified in the first paragraph of
this Agreement.
"Entitlement Orders" has the meaning specified in Section 8-102(a)(8)
of the Code.
"Financial Asset" has the meaning specified in Section 8-102(a)(9) of
the Code.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
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"Notes" has the meaning specified in the recitals of this Agreement.
"Note Trustee" means JPMorgan Chase Bank, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Permitted Investments" means any one of the following which shall
mature not later than the next succeeding Business Day: (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the United States Federal Reserve System having combined
capital and surplus and undivided profits of not less than $200.0 million at the
time of deposit; (iii) investments with an original maturity of 365 days or less
of any Person that is fully and unconditionally guaranteed by a bank referred to
in clause (ii); (iv) investments in commercial paper, other than commercial
paper issued by the Company or its affiliates, of any corporation incorporated
under the laws of the United States or any state thereof, which commercial paper
has a rating at the time of purchase at least equal to "A-1" by Standard &
Poor's Ratings Services ("S&P") or at least equal to "P-1" by Moody's Investors
Service, Inc. ("Moody's"); and (v) investments in money market funds registered
under the Investment Company Act of 1940, as amended, rated in the highest
applicable rating category by S&P or Moody's.
"Person" and "person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Applicable Ownership Interest" has the meaning specified in
Section 2.1 hereof.
"Pledged Notes" has the meaning specified in Section 2.1 hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Primary Treasury Dealer" means a primary U.S. government securities
dealer in The City of New York (in the State of New York).
"Proceeds" means all interest, dividends, cash, instruments,
securities, Financial Assets and other property from time to time received,
receivable or otherwise distributed upon the sale, exchange, maturity,
collection or disposition of the Collateral or any proceeds thereof.
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"Purchase Contract" has the meaning specified in the recitals of this
Agreement.
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the recitals
of this Agreement.
"Purchase Contract Settlement Date" has the meaning specified in the
recitals of this Agreement.
"Securities" has the meaning specified in the recitals of this
Agreement.
"Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section
8-102(a)(17) of the Code.
"Separate Notes" means any Notes that are not Pledged Notes.
"Stated Amount" has the meaning specified in the recitals of this
Agreement.
"Supplemental Remarketing Agreement" means the Supplemental Remarketing
Agreement, as defined in the Remarketing Agreement.
"Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance with
the instructions of the Collateral Agent, the Purchase Contract Agent or the
Holder, as applicable:
(i) in the case of Collateral consisting of securities which
cannot be delivered by book-entry or which the parties agree
are to be delivered in physical form, delivery in appropriate
physical form to the recipient accompanied by any duly
executed instruments of transfer, assignments in blank,
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transfer tax stamps and any other documents necessary to
constitute a legally valid transfer to the recipient;
(ii) in the case of Collateral consisting of securities maintained
in book-entry form by causing a "securities intermediary" (as
defined in Section 8-102(a)(14) of the Code) to (i) credit a
"security entitlement" (as defined in Section 8-102(a)(17) of
the Code) with respect to such securities to a "securities
account" (as defined in Section 8-501(a) of the Code)
maintained by or on behalf of the recipient and (ii) to issue
a confirmation to the recipient with respect to such credit.
In the case of Collateral to be delivered to the Collateral
Agent, the Securities Intermediary shall be the securities
intermediary and the securities account shall be the
Collateral Account.
"Treasury Securities" has the meaning specified in the recitals of this
Agreement.
"Treasury Unit" has the meaning specified in the recitals of this
Agreement.
"Value" with respect to any item of Collateral on any date means, as to
(i) a Note, the principal amount thereof, (ii) Cash, the face amount thereof and
(iii) Treasury Securities, the aggregate principal amount thereof at maturity.
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
Section 2.1 The Pledge. (a) The Holders from time to time as beneficial
owners of the Collateral acting through the Purchase Contract Agent, as their
attorney-in-fact, and the Purchase Contract Agent, as their attorney-in-fact,
each hereby pledges and grants to the Collateral Agent, for the benefit of the
Company, as collateral security for the performance when due (whether at stated
settlement date or earlier settlement date) by such Holders of their respective
obligations under the Purchase Contracts, a security interest in and to, and a
first lien upon, all of the right, title and interest of the Purchase Contract
Agent and such Holders in:
(i) (A) the Notes, Treasury Securities and any
Applicable Ownership Interest in the Treasury Portfolio
constituting a part of the Securities, (B) any Treasury
Securities delivered in exchange for any Notes (or, if
applicable, the Applicable Ownership Interest in the Treasury
Portfolio), and (C) any Notes (or, if applicable, the
Applicable Ownership Interest in the Treasury Portfolio)
delivered in exchange for any Treasury Securities, in
accordance with Article IV hereof, in each case that have been
Transferred to or received by the Collateral Agent and not
released by the Collateral Agent to such Holders under the
provisions of this Agreement;
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(ii) payments made by Holders pursuant to Section
4.4 hereof;
(iii) the Collateral Account and all securities,
Financial Assets, Cash and other property credited thereto and
all Security Entitlements related thereto;
(iv) the Treasury Portfolio purchased on behalf of
the Holders of Corporate Units by the Collateral Agent upon
the occurrence of a Successful Initial Remarketing, a
Successful Secondary Remarketing or a Tax Event Redemption as
provided in Article VI hereof, or otherwise; and
(v) all Proceeds of the foregoing (all of the
foregoing, collectively, the "Collateral").
(b) Prior to or concurrently with the execution and delivery
of this Agreement, the Purchase Contract Agent, on behalf of the initial Holders
of the Securities, shall cause the Notes comprising a part of the Corporate
Units to be Transferred to the Collateral Agent for the benefit of the Company
as secured party. Such Notes shall be Transferred by physically delivering such
Notes to the Securities Intermediary indorsed in blank (or accompanied by a bond
power indorsed in blank) and causing the Securities Intermediary to credit the
Collateral Account with such Notes such that the Notes or the Security
Entitlements with respect to such Notes are credited to the Collateral Account.
In the event a Holder of Corporate Units so elects, such Holder may Transfer
Treasury Securities to the Collateral Agent for the benefit of the Company as
provided in Section 4.1 hereof in exchange for the release by the Collateral
Agent on behalf of the Company of Notes or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, with an aggregate
principal amount equal to the aggregate principal amount of the Treasury
Securities so Transferred, in the case of Notes, or with an appropriate
Applicable Ownership Interest (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio equal to the aggregate principal amount in
the Treasury Securities so Transferred, upon notice from the Company to the
Collateral Agent that a Successful Initial Remarketing, a Successful Secondary
Remarketing or a Tax Event Redemption has occurred, to the Purchase Contract
Agent on behalf of such Holder. In the event that a Holder of Treasury Units so
elects, such Holder may Transfer Notes or the appropriate Applicable Ownership
Interest in the Treasury Portfolio to the Collateral Agent for the benefit of
the Company as provided in Section 4.2 hereof in exchange for the release by the
Collateral Agent on behalf of the Company of Treasury Securities with an
aggregate principal amount at maturity equal to the aggregate principal amount
of the Notes or the appropriate Applicable Ownership Interest (as specified in
clause (i) of the definition of such term) in the Treasury Portfolio so
transferred to the Purchase Contract Agent on behalf of such Holder. Treasury
Securities and the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as applicable, shall be Transferred to the Collateral Account
maintained by the Collateral Agent at the Securities Intermediary by book-entry
transfer to the Collateral Account in accordance with the TRADES Regulations and
other applicable law and by the notation
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by the Securities Intermediary on its books that a Security Entitlement with
respect to such Treasury Securities or appropriate Applicable Ownership Interest
in the Treasury Portfolio has been credited to the Collateral Account.
(c) For purposes of perfecting the Pledge under applicable
law, including, to the extent applicable, the TRADES Regulations or the Uniform
Commercial Code as adopted and in effect in any applicable jurisdiction, the
Collateral Agent shall be the agent of the Company as provided herein. The
pledge and grant of a security interest and first lien provided in this Section
2.1 is herein referred to as the "Pledge" and the Notes, Treasury Securities or
Applicable Ownership Interest subject to the Pledge, excluding any Notes that
are delivered pursuant to Section 6.2 hereof or Treasury Securities or
Applicable Ownership Interest released from the Pledge as provided in Article IV
hereof, are herein referred to as "Pledged Notes," the "Pledged Treasury
Securities," or the "Pledged Applicable Ownership Interest" respectively.
Subject to the Pledge and the provisions of Section 2.2 hereof, the Holders from
time to time shall have full beneficial ownership of the Collateral. Whenever
directed by the Collateral Agent acting on behalf of the Company, the Securities
Intermediary shall have the right to reregister the Notes or any other
securities held in physical form in its name.
(d) Except as may be required in order to release Notes in
connection with a Holder's election to convert its investment from Corporate
Units to Treasury Units, or except as otherwise required to release Notes as
specified herein, neither the Collateral Agent nor the Securities Intermediary
shall relinquish physical possession of any certificate evidencing a Note,
Treasury Securities or the Applicable Ownership Interest prior to the
termination of this Agreement, except Notes may be held in any clearing
corporation in an account including only assets of customers of the Collateral
Agent or Securities Intermediary. If it becomes necessary for the Collateral
Agent to relinquish physical possession of a certificate in order to release a
portion of the Notes evidenced thereby from the Pledge, the Collateral Agent
shall use commercially reasonable efforts to obtain physical possession of a
replacement certificate evidencing any Notes remaining subject to the Pledge
hereunder registered to it or indorsed in blank (or accompanied by a stock or
bond power indorsed in blank) within fifteen days of the date it relinquished
possession. The Collateral Agent shall promptly notify the Company of the
Collateral Agent's failure to obtain possession of any such replacement
certificate as required hereby.
Section 2.2 Control and Perfection. (a) In connection with the Pledge
granted in Section 2.1 hereof, and subject to the other provisions of this
Agreement, the Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, and the Purchase Contract Agent each hereby
authorizes and directs the Securities Intermediary (without the necessity of
obtaining the further consent of the Purchase Contract Agent or any of the
Holders), and the Securities Intermediary agrees, to comply with and follow any
instructions and Entitlement Orders that the Collateral Agent on behalf of the
Company may give in writing with respect to the Collateral Account, the
Collateral credited thereto and any Security Entitlements with respect to any
thereof. In
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the event the Securities Intermediary receives from the Holders or the Purchase
Contract Agent Entitlement Orders that conflict with Entitlement Orders received
from the Collateral Agent, the Securities Intermediary shall follow the
Entitlement Orders received from the Collateral Agent. Such instructions and
Entitlement Orders may, without limitation, direct the Securities Intermediary
to transfer, redeem, sell, liquidate, assign, deliver or otherwise dispose of
the Notes, the Treasury Securities, any Applicable Ownership Interest in the
Treasury Portfolio, and any Security Entitlements with respect thereto and to
pay and deliver any income, proceeds or other funds derived therefrom to the
Company. The Holders from time to time acting through the Purchase Contract
Agent hereby further authorize and direct the Collateral Agent, as agent of the
Company, to itself issue instructions and Entitlement Orders, and to otherwise
take action, with respect to the Collateral Account, the Collateral credited
thereto and any Security Entitlements with respect thereto, pursuant to the
terms and provisions hereof, all without the necessity of obtaining the further
consent of the Purchase Contract Agent or any of the Holders. The Collateral
Agent shall be the agent of the Company and shall act only as directed in
writing by the Company. Without limiting the generality of the foregoing, the
Collateral Agent shall issue Entitlement Orders to the Securities Intermediary
when and as directed by the Company.
(b) The Collateral Agent hereby confirms and agrees that:
(i) all securities or other property underlying any
Financial Assets credited to the Collateral Account shall be
registered in the name of the Collateral Agent, indorsed to
the Collateral Agent or in blank or credited to another
securities account maintained in the name of the Collateral
Agent and in no case will any Financial Asset credited to the
Collateral Account be registered in the name of the Purchase
Contract Agent, the Company or any Holder, payable to the
order of, or specially indorsed to, the Purchase Contract
Agent, the Company or any Holder except to the extent the
foregoing have been specially indorsed to the Collateral Agent
or in blank;
(ii) all property delivered to the Collateral Agent
pursuant to this Pledge Agreement (including, without
limitation, any Notes, Treasury Securities or any Applicable
Ownership Interest in the Treasury Portfolio) will be promptly
credited on the books of the Securities Intermediary to the
Collateral Account;
(iii) the Collateral Account is an account to which
Financial Assets are or may be credited, and the Securities
Intermediary shall, subject to the terms of this Agreement,
treat the Collateral Agent as entitled to exercise the rights
of any Financial Asset credited to the Collateral Account;
(iv) the Securities Intermediary has not entered
into, and until the termination of this Agreement will not
enter into, any agreement with any
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other person relating to the Collateral Account and/or any
Financial Assets credited thereto pursuant to which it has
agreed to comply with Entitlement Orders of such other person;
and
(v) the Securities Intermediary has not entered into,
and until the termination of this Agreement will not enter
into, any agreement with the Company, any Holder or the
Purchase Contract Agent purporting to limit or condition the
obligation of the Securities Intermediary to comply with
Entitlement Orders as set forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item
of property (whether investment property, financial asset, security, instrument
or Cash) credited to the Collateral Account shall be treated as a Financial
Asset.
(d) In the event of any conflict between this Agreement (or
any portion thereof) and any other agreement now existing or hereafter entered
into, the terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes
and appoints the Collateral Agent and the Company, with full power of
substitution, as the Purchase Contract Agent's attorneys-in-fact to take on
behalf of, and in the name, place and stead of, the Purchase Contract Agent and
the Holders, any action necessary or desirable to perfect and to keep perfected
the security interest in the Collateral referred to in Section 2.1 hereof. 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, it being hereby acknowledged and agreed that the Collateral
Agent shall have no duty to file or record any documents in any jurisdiction for
purposes of perfecting or maintaining the security interest in the Collateral
except those that it shall be directed in writing to execute by the Company.
ARTICLE III
DISTRIBUTIONS ON PLEDGED COLLATERAL
So long as the Purchase Contract Agent is the registered owner of the
Pledged Notes, Pledged Treasury Securities or Pledged Applicable Ownership
Interest in the Treasury Portfolio, it shall receive all payments thereon. If
the Pledged Notes are reregistered, such that the Collateral Agent becomes the
registered holder, all payments of principal on the Pledged Notes or, if
applicable, the Pledged Treasury Securities or Pledged Applicable Ownership
Interest (as specified in clause (i) of the definition of Applicable Ownership
Interest) in the Treasury Portfolio, or interest payments on the Pledged Notes
or on the appropriate Pledged Applicable Ownership Interest (as specified in
clause (ii) of the definition of Applicable Ownership Interest) in the Treasury
Portfolio, as the case may be, and all payments of the principal of, or cash
distributions on, any Pledged Treasury Securities received by the Collateral
Agent that are properly payable hereunder, shall be paid by the Collateral Agent
by wire transfer in same day funds:
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(i) in the case of (A) interest payments with respect to the
Pledged Notes or the appropriate Pledged Applicable Ownership
Interest (as specified in clause (ii) of the definition of
Applicable Ownership Interest) in the Treasury Portfolio, as
the case may be, and (B) any payments of principal or, if
applicable, the appropriate Applicable Ownership Interest (as
specified in clause (i) of the definition of such term) in the
Treasury Portfolio with respect to any Notes or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, that have been released from
the Pledge pursuant to Section 4.1 or 4.3 hereof, to the
Purchase Contract Agent, for the benefit of the relevant
Holders of Securities, to the account designated by the
Purchase Contract Agent for such purpose, no later than 11:00
a.m., New York City time, on the Business Day such payment is
received by the Collateral Agent (provided that in the event
such payment is received by the Collateral Agent on a day that
is not a Business Day or after 10:30 a.m., New York City time,
on a Business Day, then such payment shall be made no later
than 10:30 a.m., New York City time, on the next succeeding
Business Day);
(ii) in the case of any principal payments with respect to any
Pledged Treasury Securities that have been released from the
Pledge pursuant to Section 4.2 or 4.3 hereof, to the Purchase
Contract Agent, for the benefit of the Holders of the Treasury
Units, to the accounts designated by the Purchase Contract
Agent in writing for such purpose, no later than 11:00 a.m.,
New York City time, on the Business Day such payment is
received by the Collateral Agent (provided that in the event
such payment is received by the Collateral Agent on a day that
is not a Business Day or after 10:30 a.m., New York City time,
on a Business Day, then such payment shall be made no later
than 10:30 a.m., New York City time, on the next succeeding
Business Day); and
(iii) in the case of payments of the Proceeds of any Pledged Notes
or the appropriate Pledged Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, or the Proceeds of
any Pledged Treasury Securities, to the Company on the
Purchase Contract Settlement Date to the extent of the
Purchase Price in accordance with the procedure set forth in
Section 4.6(a) or 4.6(b) hereof, in full satisfaction of the
respective obligations of the Holders under the related
Purchase Contracts and, to the extent such Proceeds exceed the
Purchase Price, to the Purchase Contract Agent for the benefit
of the Holders.
All payments received by the Purchase Contract Agent as provided herein
shall be applied by the Purchase Contract Agent pursuant to the provisions of
the Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the principal amount of the Notes
or, if applicable, the appropriate Applicable Ownership Interest (as specified
in clause (i) of the definition of
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such term) or any amounts referred to in Section 4.3 of the Purchase Contract
Agreement on account of any Pledged Note or the appropriate Pledged Applicable
Ownership Interest in the Treasury Portfolio, as applicable, or a Holder of
Treasury Units shall receive any payments of principal on account of any
Treasury Securities that, at the time of such payment, are Pledged Treasury
Securities, the Purchase Contract Agent or such Holder shall hold the same as
trustee of an express trust for the benefit of the Company or, in the case of
amounts referred to in Section 4.3 of the Purchase Contract Agreement, for the
benefit of the Collateral Agent for and on behalf of the Company (and promptly
deliver the same over to the Company or the Collateral Agent, as applicable) for
application to the obligations of the Holders under the related Purchase
Contracts, and the Holders shall acquire no right, title or interest in any such
payments of principal, or other amounts referred to in this Section, so
received.
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES
Section 4.1 Substitution for Notes and the Creation of Treasury Units.
At any time prior to the seventh Business Day immediately preceding the Purchase
Contract Settlement Date (or on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, if a Tax Event Redemption, a
Successful Initial Remarketing or a Successful Secondary Remarketing has
occurred), a Holder of Corporate Units shall have the right to create Treasury
Units by substituting Treasury Securities for the Pledged Notes (or, if a Tax
Event Redemption, a Successful Initial Remarketing or a Successful Secondary
Remarketing has occurred, the appropriate Pledged Applicable Ownership Interest
(as specified in clause (i) of the definition of Applicable Ownership Interest)
in the Treasury Portfolio) securing such Holder's obligations under the Purchase
Contracts comprising a part of its Corporate Units in integral multiples of 20
Corporate Units by (a) Transferring to the Collateral Agent Treasury Securities
having a Value equal to the aggregate principal amount of the Pledged Notes (or
appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as
the case may be), to be released and (b) transferring the related Corporate
Units to the Purchase Contract Agent, accompanied by a notice, substantially in
the form of Exhibit B hereto, to the Purchase Contract Agent stating that such
Holder has Transferred the relevant Treasury Securities to the Collateral Agent
pursuant to clause (a) above (stating the Value of the Treasury Securities
Transferred by such Holder) and requesting that the Purchase Contract Agent
instruct the Collateral Agent to release from the Pledge the Pledged Notes or
the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, related to such Corporate Units. The Purchase Contract Agent
shall instruct the Collateral Agent pursuant to the form provided in Exhibit A;
provided that if a Tax Event Redemption, a Successful Initial Remarketing or a
Successful Secondary Remarketing has occurred and the Treasury Portfolio has
become a component of the Corporate Units, Holders of Corporate Units may make
such substitution only in integral multiples of 32,000 Corporate Units at any
time on or prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date.
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Notwithstanding the foregoing, a Holder of Corporate Units may not create
Treasury Units by substituting the Treasury Securities for the Pledged Notes
pursuant to this Section 4.1 during the period commencing on the fourth Business
Day immediately preceding the Initial Remarketing Date (or, upon a Failed
Initial Remarketing, the Secondary Remarketing Date) and continuing through the
fourth Business Day following the Initial Remarketing Date (or, upon a Failed
Initial Remarketing, following the Secondary Remarketing Date). Without limiting
the generality of any other provision herein, in no event shall the Collateral
Agent have any liability for acting in accordance with instructions in the form
provided in Exhibit A. Upon receipt of Treasury Securities from a Holder of
Corporate Units and the related instruction from the Purchase Contract Agent
and, if applicable, notice from the Company that a Successful Initial
Remarketing, a Successful Secondary Remarketing or a Tax Event Redemption has
occurred, the Collateral Agent shall release the Pledged Notes or the
appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, and shall promptly Transfer to the securities account specified
by the Purchase Contract Agent such Pledged Notes or the appropriate Pledged
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
free and clear of any lien, pledge or security interest created hereby. All
items Transferred and/or substituted by any Holder pursuant to this Section 4.1,
Section 4.2 or any other Section of this Agreement shall be Transferred and/or
substituted free and clear of all liens, security interests, claims and
encumbrances.
Section 4.2 Substitution of Treasury Securities and the Recreation of
Corporate Units. At any time prior to the seventh Business Day immediately
preceding the Purchase Contract Settlement Date (or on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date, if a
Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary
Remarketing has occurred), a Holder of Treasury Units shall have the right to
recreate Corporate Units in integral multiples of 20 Treasury Units by (a)
Transferring to the Collateral Agent Notes having a Value equal to the Value of
the Pledged Treasury Securities to be released (or the appropriate Applicable
Ownership Interest in the Treasury Portfolio with the Applicable Ownership
Interest (as specified in clause (i) of the definition of such term) having
Value equal to the Value of the Pledged Treasury Securities to be released) and
(b) delivering the related Treasury Units to the Purchase Contract Agent,
accompanied by a notice, substantially in the form of Exhibit B hereto, to the
Purchase Contract Agent stating that such Holder has transferred the relevant
amount of Notes (or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be) to the Collateral Agent pursuant to
clause (a) above and requesting that the Purchase Contract Agent instruct the
Collateral Agent to release from the Pledge the Pledged Treasury Securities
underlying such Treasury Units. The Purchase Contract Agent shall instruct the
Collateral Agent in the form provided in Exhibit A; provided that if a Tax Event
Redemption, a Successful Initial Remarketing or a Successful Secondary
Remarketing has occurred and the Treasury Portfolio has become a component of
the Corporate Units, Holders of Treasury Units may make such substitution only
in integral multiples of 32,000 Treasury Units, at any time on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date.
Notwithstanding the foregoing, a
14
Holder of Treasury Units may not recreate Corporate Units pursuant to this
Section 4.2 during the period commencing on the fourth Business Day immediately
preceding the Initial Remarketing Date (or, upon a Failed Initial Remarketing,
the Secondary Remarketing Date) and continuing through the fourth Business Day
following the Initial Remarketing Date (or, upon a failed Initial Remarketing,
the Secondary Remarketing Date). Without limiting the generality of any other
provision herein, in no event shall the Collateral Agent have any liability for
acting in accordance with instructions in the form provided in Exhibit A. Upon
receipt of the Notes or the appropriate Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, from such Holder and the instruction
from the Purchase Contract Agent, the Collateral Agent shall release the
Treasury Securities having a corresponding aggregate principal amount from the
Pledge and shall promptly Transfer such Treasury Securities, free and clear of
any lien, pledge or security interest created hereby, to the Purchase Contract
Agent.
Section 4.3 Termination Event. Upon receipt by the Collateral Agent of
written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall promptly Transfer any Pledged Notes (or the Pledged
Applicable Ownership Interest in the Treasury Portfolio if the Company has
notified the Collateral Agent that a Tax Event Redemption, a Successful Initial
Remarketing or a Successful Secondary Remarketing has occurred) and Pledged
Treasury Securities to the Purchase Contract Agent for the benefit of the
Holders of the Corporate Units and the Treasury Units, respectively, free and
clear of any lien, pledge or security interest or other interest created hereby.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Notes, the Treasury Portfolio or of the Pledged Treasury Securities, as the case
may be, as provided by this Section 4.3, the Purchase Contract Agent shall:
(i) use reasonable best efforts to obtain an opinion of a
nationally recognized law firm reasonably acceptable to the Collateral
Agent to the effect that, as a result of the Company's being the debtor
in such a bankruptcy case, the Collateral Agent will not be prohibited
from releasing or Transferring the Collateral as provided in this
Section 4.3, and shall deliver such opinion to the Collateral Agent
within ten days after the occurrence of such Termination Event, and if
(y) the Purchase Contract Agent shall be unable to obtain such opinion
within ten days after the occurrence of such Termination Event or (z)
the Collateral Agent shall continue, after delivery of such opinion, to
refuse to effectuate the release and Transfer of all Pledged Notes, the
Pledged Applicable Interest in the Treasury Portfolio or the Pledged
Treasury Securities, as the case may be, as provided in this Section
4.3, then the Purchase Contract Agent shall within fifteen days after
the occurrence of such Termination Event commence an action or
proceeding in the court with jurisdiction of the Company's case under
15
the Bankruptcy Code seeking an order requiring the Collateral Agent to
effectuate the release and transfer of all Pledged Notes, the Pledged
Applicable Interest in the Treasury Portfolio or the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3 or
(ii) commence an action or proceeding like that described
above within ten days after the occurrence of such Termination Event.
Section 4.4 Cash Settlement; Put Option. (a) Upon receipt by the
Collateral Agent of (i) a notice from the Purchase Contract Agent promptly after
the receipt by the Purchase Contract Agent of notice that a Holder of Corporate
Units has elected, in accordance with the procedures specified in Section
5.5(a)(i) of the Purchase Contract Agreement, to settle its Purchase Contract
with Cash and (ii) payment of the Purchase Price by such Holder on or prior to
11:00 a.m., New York City time, on the Business Day immediately preceding the
Purchase Contract Settlement Date, in lawful money of the United States by
certified or cashiers' check or wire transfer in immediately available funds
payable to or upon the order of the Company, then the Collateral Agent shall, at
the written direction of the Company, promptly invest any Cash received from a
Holder in connection with a Cash Settlement in Permitted Investments. Upon
receipt of the proceeds upon the maturity of the Permitted Investments on the
Purchase Contract Settlement Date, the Collateral Agent shall pay the portion of
such proceeds and deliver any certified or cashiers' checks received and any
funds so wired, in an aggregate amount equal to the Purchase Price, to the
Company on the Purchase Contract Settlement Date, and shall distribute any funds
in respect of the interest earned from the Permitted Investments to the Purchase
Contract Agent for payment to the relevant Holders.
(b) If a Failed Final Remarketing has occurred, each Holder of
Notes shall have a Put Option, as described in Section 5.5(c) of the Purchase
Contract Agreement, giving each Holder the right to put the Notes to the Company
on the Put Option Settlement Date at a repayment price equal to the principal
amount of the Notes plus an amount equal to any accrued and unpaid interest
thereon to the date of payment. If a Holder has exercised the Put Option but has
not otherwise settled the Purchase Contracts in cash by the close of business on
the Business Day immediately prior to the Purchase Contract Settlement Date, the
put price will be applied by the Collateral Agent, in accordance with the terms
hereof, to satisfy in full the obligations of the Holder to pay the Purchase
Price for the shares of Common Stock under the related Purchase Contracts on the
Purchase Contract Settlement Date.
(c) Unless a Tax Event Redemption, a Successful Initial
Remarketing or a Successful Secondary Remarketing has occurred, if a Holder of
Corporate Units fails to notify the Purchase Contract Agent of its intention to
make a Cash Settlement in accordance with Section 5.5(a)(i) of the Purchase
Contract Agreement, such failure shall constitute an event of default under the
Purchase Contract Agreement and hereunder, and the Holder shall be deemed to
have consented to the disposition of the Pledged Notes pursuant to the
remarketing as described in Section 5.5(b) of the Purchase Contract
16
Agreement, which is incorporated herein by reference. If a Holder of Corporate
Units does notify the Purchase Contract Agent as provided in Section 5.5(a)(i)
of the Purchase Contract Agreement of its intention to pay the Purchase Price in
cash, but fails to make such payment as required by Section 5.5(a)(ii) of the
Purchase Contract Agreement, the Pledged Notes of such a Holder will not be
remarketed but instead the Collateral Agent, for the benefit of the Company,
will exercise its rights as a secured party with respect to such Pledged Notes
at the direction of the Company to retain or dispose of the Collateral in
accordance with applicable law. In addition, in the event of a Failed Final
Remarketing as described in Section 5.5(b) of the Purchase Contract Agreement,
unless such Holder shall have duly exercised its Put Option, such Failed Final
Remarketing shall constitute an additional event of default hereunder by such
Holder and the Collateral Agent, for the benefit of the Company, will also
exercise its rights as a secured party with respect to such Pledged Notes at the
direction of the Company to retain or dispose of the Collateral in accordance
with applicable law.
Section 4.5 Early Settlement. Upon written notice to the Collateral
Agent by the Purchase Contract Agent that one or more Holders of Securities have
elected to effect Early Settlement of their respective obligations under the
Purchase Contracts forming a part of such Securities in accordance with the
terms of the Purchase Contracts and the Purchase Contract Agreement (setting
forth the number of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Notes or the appropriate Pledged Applicable
Ownership Interest in the Treasury Portfolio in the case of a Holder of
Corporate Units or (b) Pledged Treasury Securities in the case of a Holder of
Treasury Units, as the case may be, in each case with an aggregate principal
amount, as the case may be, equal to the product of (i) the Stated Amount times
(ii) the number of such Purchase Contracts as to which such Holders have elected
to effect Early Settlement and shall Transfer all such Pledged Notes, the
appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio or
the Pledged Treasury Securities, as the case may be, free and clear of the
Pledge created hereby, to the Purchase Contract Agent for the benefit of such
Holders.
Section 4.6 Application of Proceeds; Settlement. (a) In the event a
Holder of Corporate Units (unless a Tax Event Redemption, a Successful Initial
Remarketing or a Successful Secondary Remarketing has occurred) has not elected
to make an effective Cash Settlement by notifying the Purchase Contract Agent
(with a copy to the Collateral Agent) in the manner provided for in Section
5.5(a)(i) in the Purchase Contract Agreement and has not made an Early
Settlement of the Purchase Contracts underlying its Corporate Units, such Holder
shall be deemed to have elected to pay for the shares of Common Stock to be
issued under such Purchase Contracts from the Proceeds of the related Pledged
Notes. The Collateral Agent shall, by 10:00 a.m., New York City time, on the
fourth Business Day immediately preceding the Purchase Contract Settlement
17
Date, without any instruction from such Holder of Corporate Units, present the
related Pledged Notes to the Remarketing Agent for remarketing. Upon receiving
such Pledged Notes, the Remarketing Agent, pursuant to the terms of the
Remarketing Agreement and the Supplemental Remarketing Agreement (if any), will
use its reasonable best efforts to remarket such Pledged Notes on the Final
Remarketing Date at a price of 100.5% of the aggregate Value of such Pledged
Notes, provided that such remarketing will not be considered to have failed so
long as the Remarketing Agent obtains at least 100% of the aggregate principal
amount of such Pledged Notes on the Final Remarketing Date. After deducting as
the Remarketing Fee an amount not exceeding 25 basis points (0.25%) of the
aggregate Value of the remarketed Pledged Notes from any amount of such Proceeds
in excess of the aggregate Value of the remarketed Pledged Notes, the
Remarketing Agent will remit the entire amount of the Proceeds of such
remarketing to the Collateral Agent. On the Purchase Contract Settlement Date,
the Collateral Agent shall remit to the Company that portion of the Proceeds
from such remarketing equal to the aggregate Value of such remarketed Pledged
Notes to satisfy in full the obligations of such Holders of Corporate Units to
pay the Purchase Price to purchase the shares of Common Stock under the related
Purchase Contracts. The remaining portion of such Proceeds, if any, shall be
remitted by the Collateral Agent to the Purchase Contract Agent for payment to
such Holders of Corporate Units. If the Remarketing Agent advises the Collateral
Agent in writing that it cannot remarket the related Pledged Notes of such
Holders of Corporate Units at a price not less than 100% of the aggregate Value
of such Pledged Notes or if the remarketing shall not have occurred because a
condition precedent to the remarketing shall not have been fulfilled, thus
resulting in a Failed Final Remarketing and an event of default under the
Purchase Contract Agreement and hereunder, the Collateral Agent, for the benefit
of the Company will, at the written direction of the Company, retain or dispose
of the Pledged Notes in accordance with applicable law and satisfy in full, from
any such disposition or retention, such Holder's obligation to pay the Purchase
Price for the shares of Common Stock under the related Purchase Contracts.
(b) In the event a Holder of Treasury Units or Corporate Units
(if a Tax Event Redemption, a Successful Initial Remarketing or a Successful
Secondary Remarketing has occurred) has not made an Early Settlement of the
Purchase Contracts underlying its Treasury Units or Corporate Units, as the case
may be, such Holder shall be deemed to have elected to pay for the shares of
Common Stock to be issued under such Purchase Contracts from the Proceeds of the
related Pledged Treasury Securities or the appropriate Pledged Applicable
Ownership Interest (as specified in clause (i) of the definition of Applicable
Ownership Interest) in the Treasury Portfolio, as the case may be. On the
Business Day immediately prior to the Purchase Contract Settlement Date, the
Collateral Agent shall, at the written direction of the Purchase Contract Agent,
which written direction shall be furnished to the Collateral Agent prior to
11:30 a.m., New York City time, invest the Cash proceeds of the maturing Pledged
Treasury Securities or the maturing appropriate Pledged Applicable Ownership
Interest (as specified in clause (ii) of the definition of Applicable Ownership
Interest) in the Treasury Portfolio, as the case may be, in Permitted
Investments; provided that if the Collateral Agent shall not receive any written
direction by 11:30 a.m. New York City time, on such date, the Collateral
18
Agent shall invest such proceeds in Permitted Investments of the type specified
in clause (v) of the definition of Permitted Investments. Without receiving any
instruction from any such Holder of Treasury Units or Corporate Units, the
Collateral Agent shall remit to the Company that portion of the Proceeds of the
related Pledged Treasury Securities or appropriate Pledged Applicable Ownership
Interest (as specified in clause (i) of the definition of Applicable Ownership
Interest) in the Treasury Portfolio equal to the aggregate Purchase Price of
such Purchase Contracts on the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities or appropriate Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, and the investment earnings from the investment
in Permitted Investments is in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent shall remit such
excess, when received, to the Purchase Contract Agent for the benefit of the
Holders.
(c) Pursuant to the Remarketing Agreement and subject to the
terms of the Supplemental Remarketing Agreement (if any), on or prior to the
second Business Day immediately preceding the Initial Remarketing Date, the
Secondary Remarketing Date or the Final Remarketing Date, as applicable, but no
earlier than the Payment Date immediately preceding such date, holders of
Separate Notes may elect to have their Separate Notes remarketed by delivering
their Separate Notes, together with a notice of such election, substantially in
the form of Exhibit C hereto, to the Custodial Agent. The Custodial Agent shall
hold such Separate Notes in an account separate from the Collateral Account. A
holder of Separate Notes electing to have its Separate Notes remarketed will
also have the right to withdraw such election by written notice to the Custodial
Agent, substantially in the form of Exhibit D hereto, on or prior to the second
Business Day immediately preceding the Initial Remarketing Date, the Secondary
Remarketing Date or the Final Remarketing Date, as applicable, upon which notice
the Custodial Agent shall return such Separate Notes to such holder.
On the Business Day immediately preceding the Initial Remarketing Date,
the Secondary Remarketing Date or the Final Remarketing Date, as applicable, the
Custodial Agent shall notify the Remarketing Agent of the aggregate principal
amount of the Separate Notes to be remarketed and will deliver to the
Remarketing Agent for remarketing all Separate Notes delivered to the Custodial
Agent pursuant to this Section 4.6(c) and not withdrawn pursuant to the terms
hereof prior to such date. 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 for the
benefit of such holders. In the event of a Failed Initial Remarketing, a Failed
Secondary Remarketing or a Failed Final Remarketing, as applicable, the
Remarketing Agent will promptly return such Separate Notes to the Custodial
Agent for redelivery to such holders.
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ARTICLE V
VOTING RIGHTS - NOTES
The Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the Pledged Notes
or any part thereof for any purpose not inconsistent with the terms of this
Agreement and in accordance with the terms of the Purchase Contract Agreement;
provided that the Purchase Contract Agent shall not exercise or, as the case may
be, shall not refrain from exercising such right if, in the judgment of the
Company, such action would impair or otherwise have a material adverse effect on
the value of the Pledged Notes, and provided, further, that the Purchase
Contract Agent shall give the Company and the Collateral Agent at least five
days' prior written notice of the manner in which it intends to exercise, or its
reasons for refraining from exercising, any such right. Upon receipt of any
notices and other communications in respect of any Pledged Notes, including
notice of any meeting at which holders of Notes are entitled to vote or
solicitation of consents, waivers or proxies of holders of Notes, the Collateral
Agent shall use reasonable efforts to send promptly to the Purchase Contract
Agent such notice or communication, and as soon as reasonably practicable after
receipt of a written request therefor from the Purchase Contract Agent, execute
and deliver to the Purchase Contract Agent such proxies and other instruments in
respect of such Pledged Notes (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect to
the Pledged Notes.
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ARTICLE VI
RIGHTS AND REMEDIES; TAX EVENT REDEMPTION
Section 6.1 Rights and Remedies of the Collateral Agent. (a) In
addition to the rights and remedies specified in Section 4.4 hereof or otherwise
available at law or in equity, after an event of default hereunder, the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
"Code") (whether or not, to the extent permitted by law, the Code is in effect
in the jurisdiction where the rights and remedies are asserted) and the TRADES
Regulations and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted. Wherever reference is made in this Agreement
to any section of the Code, such reference shall be deemed to include a
reference to any provision of the Code, which is a successor to, or amendment
of, such section. Without limiting the generality of the foregoing, such
remedies may include, to the extent permitted by applicable law, (i) retention
of the Pledged Notes or other Collateral in full satisfaction of the Holder's
obligations under the Purchase Contracts or (ii) sale of the Pledged Notes or
other Collateral in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, in the event the Collateral Agent is
unable to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (i) of the definition of such term)
of the Treasury Portfolio or on account of principal payments of any Pledged
Treasury Securities as provided in Article III hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Securities, or the appropriate Pledged Applicable Ownership Interest (as
specified in clause (i) of the definition of Applicable Ownership Interest) in
the Treasury Portfolio, as applicable, is a part under the related Purchase
Contracts, the inability to make such payments shall constitute an event of
default hereunder and the Collateral Agent shall have and may exercise, with
reference to such Pledged Treasury Securities, or such appropriate Pledged
Applicable Ownership Interest (as specified in clause (i) of the definition of
Applicable Ownership Interest) in the Treasury Portfolio, as applicable, and
such obligations of such Holder, any and all of the rights and remedies
available to a secured party under the Code and the TRADES Regulations after
default by a debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, the Collateral Agent is hereby
irrevocably authorized to receive and collect all payments of (i) principal and
interest on the Pledged Notes, (ii) the principal amount of the Pledged Treasury
Securities, or (iii) the appropriate Pledged Applicable Ownership Interest in
the Treasury Portfolio, subject, in each case, to the provisions of Article III,
and as otherwise granted herein.
21
(d) The Purchase Contract Agent, individually and as
attorney-in-fact for each Holder of Securities, agrees that, from time to time,
upon the written request of the Collateral Agent, the Purchase Contract Agent or
such Holder shall execute and deliver such further documents and do such other
acts and things as are necessary or as the Collateral Agent may reasonably
request in order to maintain the Pledge, and the perfection and priority
thereof, and to confirm the rights of the Collateral Agent hereunder. The
Purchase Contract Agent shall have no liability to any Holder for executing any
documents or taking any such acts requested by the Collateral Agent hereunder,
except for liability for its own negligent act, its own negligent failure to act
or its own willful misconduct.
Section 6.2 Tax Event Redemption. Upon the occurrence of a Tax Event
Redemption prior to a Successful Initial Remarketing, or, upon a Failed Initial
Remarketing but a Successful Secondary Remarketing or, upon both a Failed
Initial Remarketing and a Failed Secondary Remarketing, prior to the Purchase
Contract Settlement Date, the aggregate Redemption Amount for each Pledged Note,
plus accrued and unpaid interest on such Pledged Note with respect to any
Payment Date on or prior to the Tax Event Redemption Date, shall be delivered to
the Collateral Agent by the Note Trustee on or prior to 12:00 p.m., New York
City time, by check or wire transfer in immediately available funds at such
place and at such account as may be designated by the Collateral Agent in
exchange for the Pledged Notes. In the event the Collateral Agent receives such
aggregate Redemption Amount, and such accrued and unpaid interest (if any), the
Collateral Agent will, at the written direction of the Company, apply such
aggregate Redemption Amount to purchase from the Quotation Agent the Treasury
Portfolio and promptly remit the remaining portion of such aggregate Redemption
Amount and such accrued and unpaid interest (if any) to the Purchase Contract
Agent for payment to the Holders of Corporate Units. The Collateral Agent shall
Transfer the Treasury Portfolio to the Collateral Account to secure the
obligation of all Holders of Corporate Units to purchase shares of Common Stock
of the Company under the Purchase Contracts constituting a part of such
Corporate Units, in substitution for the Pledged Notes. Thereafter the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Treasury Portfolio as it had in respect of the Pledged Notes as
provided in Articles II, III, IV, V and VI hereof, and any reference herein to
the Notes shall be deemed to be a reference to such Treasury Portfolio, and any
reference herein to interest on the Notes shall be deemed to be a reference to
distributions on such Treasury Portfolio.
Section 6.3 Initial Remarketing and Secondary Remarketing. The
Collateral Agent shall, by 10:00 a.m., New York City time, on the fourth
Business Day immediately preceding each of May 16, 2005, and, in the event of a
Failed Initial Remarketing, July 1, 2005, without any instruction from any
Holder of Corporate Units, present the related Pledged Notes to the Remarketing
Agent for remarketing. Upon receiving such Pledged Notes, the Remarketing Agent,
pursuant to the terms of the Remarketing Agreement, will use its reasonable best
efforts to remarket such Pledged Notes on such date at a price of 100.5% of the
Treasury Portfolio Purchase Price. After deducting as the Remarketing
22
Fee an amount not exceeding 25 basis points (0.25%) of the Treasury Portfolio
Purchase Price from any amount of such Proceeds in excess of the Treasury
Portfolio Purchase Price, the Remarketing Agent will remit the entire amount of
the Proceeds of such remarketing to the Collateral Agent on or prior to 12:00
p.m., New York City time on May 16, 2005 or July 1, 2005, as the case may be, by
check or wire transfer in immediately available funds at such place and at such
account as may be designated by the Collateral Agent in exchange for the Pledged
Notes. In the event the Collateral Agent receives such Proceeds, the Collateral
Agent will, at the written direction of the Company, apply an amount equal to
the Treasury Portfolio Purchase Price to purchase from the Quotation Agent the
Treasury Portfolio and promptly remit the remaining portion of such Proceeds to
the Purchase Contract Agent for payment to the Holders of Corporate Units. The
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account
to secure the obligation of all Holders of Corporate Units to purchase shares of
Common Stock of the Company under the Purchase Contracts constituting a part of
such Corporate Units, in substitution for the Pledged Notes. Thereafter the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Treasury Portfolio as it had in respect of the Pledged Notes as
provided in Articles II, III, IV, V and VI hereof, and any reference herein to
the Notes shall be deemed to be reference to such Treasury Portfolio, and any
reference herein to interest on the Notes shall be deemed to be a reference to
distributions on such Treasury Portfolio.
Section 6.4 Substitutions. Whenever a Holder has the right to
substitute Treasury Securities, Notes or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, for Collateral held by
the Collateral Agent, such substitution shall not constitute a novation of the
security interest created hereby.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 7.1 Representations and Warranties. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of any of the Holders), each
hereby represents and warrants to the Collateral Agent, which representations
and warranties shall be deemed repeated on each day such Holder Transfers
Collateral, that:
(a) such Holder has the power to grant a security interest in and
lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral
and, in the case of Collateral delivered in physical form, is
the sole holder of such Collateral and is the sole beneficial
owner of, or has the right to Transfer, the Collateral it
Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay
money or other
23
restriction other than the security interest and lien granted
under Article II hereof;
(c) upon the Transfer of the Collateral to the Collateral Account,
the Collateral Agent, for the benefit of the Company, will
have a valid and perfected first priority security interest
therein (assuming that any central clearing operation or any
Intermediary or other entity not within the control of such
Holder involved in the Transfer of the Collateral, including
the Collateral Agent, gives the notices and takes the action
required of it hereunder and under applicable law for
perfection of that interest and assuming the establishment and
exercise of control pursuant to Section 2.2 hereof); and
(d) the execution and performance by such 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 II hereof or violate any provision of
any existing law or regulation applicable to it or of any
mortgage, charge, pledge, indenture, contract or undertaking
to which it is a party or which is binding on it or any of its
assets.
Section 7.2 Covenants. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of any of the Holders), each hereby covenants to the Collateral Agent
that for so long as the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holder 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 Holder will sell
or otherwise dispose (or attempt to dispose) of the Collateral
or any part of it except for the beneficial interest therein,
subject to the pledge hereunder, transferred in connection
with the Transfer of the Securities.
ARTICLE VIII
THE COLLATERAL AGENT
Section 8.1 Appointment, Powers and Immunities. The Company hereby
appoints the Collateral Agent as collateral agent and the Collateral Agent
hereby accepts such appointment. The Collateral Agent shall act as Agent for the
Company hereunder with such powers as are specifically vested in the Collateral
Agent by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Each
24
of the Collateral Agent, the Custodial Agent and the Securities
Intermediary: (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants or
obligations shall be inferred from this Agreement against any of them,
nor shall any of them be bound by the provisions of any agreement
beyond the specific terms hereof; (b) shall not be responsible for any
recitals contained in this Agreement, or in any certificate or other
document referred to or provided for in, or received by it under, this
Agreement, the Securities or the Purchase Contract Agreement, or for
the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement (other than as against the Collateral
Agent), the Securities or the Purchase Contract Agreement or any other
document referred to or provided for herein or therein or for any
failure by the Company or any other Person (except the Collateral
Agent, the Custodial Agent or the Securities Intermediary, as the case
may be) to perform any of its obligations hereunder or thereunder or
for the perfection, priority or, except as expressly required hereby,
maintenance of any security interest created hereunder (it being
acknowledged and agreed that the Collateral Agent shall have no duty to
file or record any documents in any jurisdiction for purposes of
perfecting or maintaining the security interest in the Collateral
except those documents provided to it that it shall be directed in
writing to execute and shall be filed by the Company or the Purchase
Contract Agent); (c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder (except in the case of
the Collateral Agent, pursuant to directions furnished under Section
8.2 hereof, subject to Section 8.6 hereof); (d) shall not be
responsible for any action taken or omitted to be taken by it hereunder
or under any other document or instrument referred to or provided for
herein or in connection herewith or therewith, except for its own
negligence, bad faith or willful misconduct; (e) shall not be required
to advise any party as to selling or retaining, or taking or refraining
from taking any action with respect to, the Securities or other
property deposited hereunder; and (f) shall not be responsible for the
acts or omissions of any clearing corporation with whom collateral is
deposited. Notwithstanding anything to the contrary contained herein,
none of the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall have any obligation, duty or responsibility to take
any action unless such action is non-discretionary and explicitly
required hereunder or in a written direction from the Company or the
Purchase Contract Agent given in accordance with the terms hereof.
Subject to the foregoing, during the term of this Agreement, the
Collateral Agent shall take all reasonable action in connection with
the safekeeping and preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the Value of
the Collateral or for any indirect, special, consequential or punitive damages.
Notwithstanding the foregoing, the Collateral Agent, the Custodial Agent, the
Purchase Contract Agent and Securities Intermediary, each in its individual
capacity, hereby waive any right of setoff, bankers lien, liens or perfection
rights as securities intermediary or any counterclaim with respect to any of the
Collateral.
25
Section 8.2 Instructions of the Company. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, to direct the time, method and place of conducting any proceeding
for the realization of any right or remedy available to the Collateral Agent, or
of exercising any power conferred on the Collateral Agent, the Custodial Agent
or the Securities Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this Agreement; provided that
(i) such direction shall not conflict with the provisions of any law or of this
Agreement and (ii) the Collateral Agent, the Custodial Agent and the Securities
Intermediary shall be adequately indemnified as provided herein.
Nothing in this Section 8.2 shall impair the right of the Collateral
Agent in its discretion to take any action or omit to take any action which it
deems proper and which is not inconsistent with such direction.
Section 8.3 Reliance. Each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent shall be entitled conclusively to rely
upon any certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be. As to
any matters not expressly provided for by this Agreement, the Collateral Agent,
the Custodial Agent and the Securities Intermediary shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.
Section 8.4 Rights in other Capacities. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any Holder of
Securities and any holder of Separate Notes (and any of their respective
subsidiaries or affiliates) as if it were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary and their
affiliates may accept fees and other consideration from the Purchase Contract
Agent, any Holder of Securities or any holder of Separate Notes without having
to account for the same to the Company; provided that each of the Securities
Intermediary, the Custodial Agent and the Collateral Agent covenants and agrees
with the Company that it shall not accept, receive or permit there to be created
in favor of itself and shall take no affirmative action to permit there to be
created in favor of any other Person, any security interest, lien or other
encumbrance of any kind in or upon the Collateral and the Collateral shall be
segregated or the books and records of the Collateral Agent and not commingled
with any other assets of any such Person.
26
Section 8.5 Non-Reliance. None of the Securities Intermediary, the
Custodial Agent or the Collateral Agent shall be required to keep itself
informed as to the performance or observance by the Company, the Purchase
Contract Agent, the Remarketing Agent or any Holder of Securities of this
Agreement, the Purchase Contract Agreement, the Securities or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Purchase Contract Agent or any Holder of Securities. The Collateral
Agent, the Custodial Agent and the Securities Intermediary shall not have any
duty or responsibility to provide the Company or the Remarketing Agent with any
credit or other information concerning the affairs, financial condition or
business of the Purchase Contract Agent, any Holder of Securities or any holder
of Separate Notes (or any of their respective subsidiaries or affiliates) that
may come into the possession of the Collateral Agent, the Custodial Agent or the
Securities Intermediary or any of their respective affiliates.
Section 8.6 Compensation and Indemnity. The Company agrees: (i) to pay
BNY Midwest Trust Company from time to time such compensation as shall be agreed
in writing between the Company and BNY Midwest Trust Company for all services
rendered by BNY Midwest Trust Company as Collateral Agent, Custodial Agent and
Securities Intermediary hereunder and (ii) to indemnify the Collateral Agent,
the Custodial Agent and the Securities Intermediary for, and to hold each of
them harmless from and against, any loss, liability, claim, damage or reasonable
out-of-pocket expense incurred without gross negligence, willful misconduct or
bad faith on its part, arising out of or in connection with the acceptance or
administration of its powers and duties under this Agreement, including the
reasonable out-of-pocket costs and expenses (including reasonable fees and
expenses of counsel) of defending itself against any claim or liability in
connection with the exercise or performance of such powers and duties. The
Collateral Agent, the Custodial Agent and the Securities Intermediary shall each
promptly notify the Company of any third party claim which may give rise to the
indemnity hereunder and give the Company the opportunity to participate in the
defense of such claim with counsel reasonably satisfactory to the indemnified
party, and no such claim shall be settled without the written consent of the
Company, which consent shall not be unreasonably withheld.
Section 8.7 Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, each of the Collateral Agent, the Custodial Agent
and the Securities Intermediary, as the case may be, shall be entitled, after
notice to the Company and the Purchase Contract Agent, at its sole option, to
refuse to comply with any and all claims, demands or instructions with respect
to such property or funds so long as such dispute or conflict shall continue,
and none of the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be, shall be or become liable in any way to any of
the parties hereto for its failure or refusal to comply with such conflicting
claims, demands or instructions. The Collateral Agent, the Custodial Agent and
the Securities Intermediary shall be entitled to refuse to act until either (i)
such conflicting or adverse claims or demands shall have been
27
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, as the
case may be, or (ii) the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be, shall have received security or an indemnity
reasonably satisfactory to the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, sufficient to save the Collateral
Agent, the Custodial Agent or the Securities Intermediary, as the case may be,
harmless from and against any and all loss, liability or reasonable
out-of-pocket expense which the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, may incur by reason of its acting
without bad faith, willful misconduct or gross negligence. The Collateral Agent,
the Custodial Agent or 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, as the
case may be, 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 8.8 Resignation. Subject to the appointment and acceptance of a
successor Collateral Agent, Custodial Agent or Securities Intermediary as
provided below, (a) 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 Securities,
(b) the Collateral Agent, the Custodial Agent and the Securities Intermediary
may be removed at any time by the Company and (c) 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 or the Securities Intermediary may be removed by the Purchase
Contract Agent. No such removal shall be effective until a successor Collateral
Agent has been appointed pursuant to this Section. The Purchase Contract Agent
shall promptly notify the Company of any removal of the Collateral Agent, the
Custodial Agent or the Securities Intermediary pursuant to clause (c) of the
immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be. If no successor Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's, Custodial Agent's or Securities
Intermediary's giving of notice of resignation or such removal, then the
retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, may petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be. Each of the Collateral Agent, the Custodial
Agent and the Securities Intermediary shall be a bank with a combined capital
and surplus of at least $75,000,000, which directly or
28
or through an affiliate maintains an office in The City of New York (in the
State of New York). Upon the acceptance of any appointment as Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, hereunder by a
successor Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, such successor shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, and the retiring
Collateral Agent, Custodial Agent or Securities Intermediary, as the case may
be, shall take all appropriate action to transfer any money and property held by
it hereunder (including the Collateral) to such successor. The retiring
Collateral Agent, Custodial Agent or Securities Intermediary shall, upon such
succession, be discharged from its duties and obligations as Collateral Agent,
Custodial Agent or Securities Intermediary hereunder. After any retiring
Collateral Agent's, Custodial Agent's or Securities Intermediary's resignation
hereunder as Collateral Agent, Custodial Agent or Securities Intermediary, the
provisions of this Article VIII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Collateral Agent, Custodial Agent or Securities Intermediary. Any
resignation or removal of the Collateral Agent hereunder shall be deemed for all
purposes of this Agreement as the simultaneous resignation or removal of the
Custodial Agent and the Securities Intermediary.
Section 8.9 Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
Section 8.10 Survival. The provisions of this Article VIII shall
survive termination of this Agreement and the resignation or removal of the
Collateral Agent or the Custodial Agent.
Section 8.11 Exculpation. Anything in this Agreement to the contrary
notwithstanding, in no event shall any of the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, employees or agents be
liable under this Agreement to any third party for indirect, special, punitive,
or consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent, the Custodial Agent or the Securities Intermediary, incurred without any
act or deed that is found to be attributable to gross negligence or willful
misconduct on the part of the Collateral Agent, the Custodial Agent or the
Securities Intermediary.
29
ARTICLE IX
AMENDMENT
Section 9.1 Amendment Without Consent of Holders. Without the consent
of any Holders or the holders of any Separate Notes, the Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent, at any time and from time to time, may amend this Agreement, in
form satisfactory to the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of
the Company; or
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred
upon the Company so long as such covenants or such surrender
do not adversely affect the validity, perfection or priority
of the security interests granted or created hereunder; or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities
Intermediary or Purchase Contract Agent; or
(d) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other such
provisions herein, or to make any other provisions with
respect to such matters or questions arising under this
Agreement, provided that such action shall not adversely
affect the interests of the Holders.
Section 9.2 Amendment with Consent of Holders. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided that no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(a) change any payment date; or
(b) change the amount or type of Collateral underlying a Security,
except for the rights of Holders of Corporate Units to
substitute the Treasury Securities for the Pledged Notes or
the appropriate Pledged Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, or the rights of
Holders of Treasury Units to substitute Notes or the
appropriate Applicable Ownership Interest in the Treasury
Portfolio, as applicable, for the Pledged Treasury Securities;
or
30
(c) impair the right of the Holder of any Securities to receive
distributions on the underlying Collateral or otherwise
adversely affect the Holder's rights in or to such Collateral;
or
(d) change the place or currency of payment or reduce any contract
adjustment payments or deferred contract adjustment payments;
or
(e) reduce the above-stated percentage of outstanding Purchase
Contracts the consent of Holders of which is required for the
modification or amendment of the provisions of this Agreement.
If any amendment referred to above would adversely affect only the
Corporate Units or the Treasury Units, then only the affected class of Holders
shall be entitled to vote on the amendment and the amendment shall not be
effective except with the consent of the Holders of not less than a majority of
the affected class. It shall not be necessary for any Act of Holders under this
Article IX to approve the particular form of any proposed amendment, but it
shall be sufficient if such Act shall approve the substance thereof.
Section 9.3 Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 8.1 hereof, with respect to the Collateral
Agent, and Section 7.1 of the Purchase Contract Agreement, with respect to the
Purchase Contract Agent) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and that all conditions precedent, if any, to the execution
and delivery of such amendment have been satisfied. All amendments must be in
writing, signed by all parties to this Agreement. The Collateral Agent shall not
be obligated to execute any amendment that affects its own rights, duties,
protections or obligations.
Section 9.4 Effect of Amendments. Upon the execution of any amendment
under this Article IX, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Securities evidenced by Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered under the
Purchase Contract Agreement shall be bound thereby.
Section 9.5 Reference to Amendments. Certificates evidencing Securities
that are authenticated, executed on behalf of the Holders and delivered after
the execution of any amendment pursuant to this Article IX may, and shall if
required by the Company, the Collateral Agent or the Purchase Contract Agent,
bear a notation in form approved by the Company, 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
31
Company and authenticated, executed on behalf of the Holders and delivered by
the Purchase Contract Agent in accordance with the Purchase Contract Agreement
and without charge or expense to Holders in exchange for Certificates evidencing
Outstanding Securities.
ARTICLE X
MISCELLANEOUS
Section 10.1 No Waiver. To the extent permitted by law, no failure on
the part of any party hereto or any of its agents to exercise, and no course of
dealing with respect to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise by any party hereto or any of its agents of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. To the extent permitted by law, the remedies
herein are cumulative and are not exclusive of any remedies provided by law.
Section 10.2 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting
the foregoing, the above choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent and the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account. The Company,
the Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, hereby submit to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum, as well as to trial by jury.
Section 10.3 Notices. All notices, requests, directions, consents and
other communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally
32
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid.
Section 10.4 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.
Section 10.5 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 10.6 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be construed in order to carry out the intentions of the
parties hereto as nearly as may be possible and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
Section 10.7 Expenses, etc. The Company agrees to reimburse BNY Midwest
Trust Company for: (a) all reasonable out-of-pocket costs and expenses of BNY
Midwest Trust Company (including, without limitation, the reasonable fees and
expenses of counsel to BNY Midwest Trust Company), 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 BNY Midwest Trust
Company as Collateral Agent hereunder (including, without limitation, reasonable
fees and expenses of counsel) in connection with (i) any enforcement or
proceedings resulting or incurred in connection with causing any Holder of
Securities to satisfy its obligations under the Purchase Contracts forming a
part of the Securities and (ii) the enforcement of this Section 10.7; and (c)
all transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement or
any other document referred to herein and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated
hereby.
Section 10.8 Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
33
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of
the obligations of Holders of Securities under the related
Purchase Contracts, or any other amendment or waiver of any
term of, or any consent to any departure from any requirement
of, the Purchase Contract Agreement or any Purchase Contract
or any other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor
or a pledgor.
Section 10.9 Incorporation by Reference. Each of the Company, the
Collateral Agent, the Custodial Agent and the Securities Intermediary agrees
that the Purchase Contract Agent is, in acting hereunder with respect to the
Company, entitled to all rights, privileges, benefits, protections, immunities
and indemnities provided to it under the Purchase Contract Agreement.
34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
THE ST. PAUL COMPANIES, INC.
By:_______________________________
Name:
Title:
Address for Notices: The St. Paul Companies, Inc.
385 Washington Street
St. Paul, Minnesota 55102
Attention: Bruce A. Backberg, Esq.
Telecopy: (651) 310-8204
JPMORGAN CHASE BANK, as
Purchase Contract Agent and
as attorney-in-fact of the
Holders from time to time
of the Securities
By:_______________________________
Name:
Title:
Address for Notices: JPMorgan Chase Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Institutional Trust
Services
Telecopy: (212) 946-8154
BNY Midwest Trust Company,
as Collateral Agent, Custodial
Agent and as Securities
Intermediary
By:_______________________________
Name:
Title:
Address for Notices: BNY Midwest Trust Company
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attn: Daniel G. Donovan
Telecopy: (312) 827-8542
35
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
BNY Midwest Trust Company,
2 North LaSalle Street
Suite 1020
Chicago, Illinois 60602
Re: The St. Paul Companies, Inc. (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of July 31, 2002 (the "Pledge Agreement"), among the
Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary, and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Corporate Units] [Treasury Units] from time to time, that
the holder of the Securities listed below (the "Holder") has elected to
substitute $_____ [aggregate principal amount of Treasury Securities] [aggregate
principal amount of Notes or the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be,] in exchange for an equal Value of
[Pledged Notes or the appropriate Pledged Applicable Ownership Interest in the
Treasury Portfolio, as the case may be,] [Pledged Treasury Securities] held by
you in accordance with the Pledge Agreement and has delivered to us a notice
stating that the Holder has Transferred [Treasury Securities] [Notes or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case
may be,] to you, as Collateral Agent. We hereby instruct you, upon receipt of
such [Pledged Treasury Securities] [Pledged Notes or the appropriate Pledged
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,],
and upon the payment by such Holder of any applicable fees, to release the
[Notes or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to such [Corporate
Units] [Treasury Units] to us in accordance with the Holder's instructions.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date:_____________
JPMORGAN CHASE BANK,
By:_______________________________
Name:
Title:
Signature Guarantee:______________
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Please print name and address of Registered Holder electing to
substitute [Treasury Securities] [Notes or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be,] for the [Pledged Notes
or the appropriate Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities]:
_____________________________________________________________
Name
Social Security or other Taxpayer Identification Number, if any
___________________________
Address
___________________________
___________________________
2
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
JPMorgan Chase Bank,
450 West 33rd Street
15th Floor
New York, New York 10001
Re: Equity Units of The St. Paul Companies, Inc. (the "Company")
The undersigned Holder hereby notifies you that it has delivered to BNY
Midwest Trust Company, as Collateral Agent, [$_______ aggregate principal amount
of Treasury Securities] [$_____aggregate principal amount of Notes or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, the case
may be,] in exchange for an equal Value of [Pledged Notes or the appropriate
Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may
be,] [Pledged Treasury Securities] held by the Collateral Agent, in accordance
with Section [4.1][4.2] of the Pledge Agreement, dated July 31, 2002 (the
"Pledge Agreement"), among you, the Company and the Collateral Agent. The
undersigned Holder has paid the Collateral Agent all applicable fees relating to
such exchange. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Notes or the appropriate Pledged Applicable Ownership Interest in the
Treasury Portfolio] [Pledged Treasury Securities] related to such [Corporate
Units] [Treasury Units]. Capitalized terms used herein but not defined shall
have the meaning set forth in the Pledge Agreement.
Dated:_____________ __________________________
Signature
Signature Guarantee:______________
Please print name and address of Registered Holder:
____________________________
____________________________________
Name Social Security or other Taxpayer
Identification Number, if any ___________________________
Address
____________________________
____________________________
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EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
BNY Midwest Trust Company,
2 North LaSalle Street
Suite 1020
Chicago, Illinois 60602
Re: Notes of The St. Paul Companies, Inc. (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of July 31, 2002 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and JPMorgan Chase Bank, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from time
to time, that the undersigned elects to deliver $ ___________ aggregate
principal amount of Notes for delivery to the Remarketing Agent on the Business
Day immediately preceding the [Initial Remarketing Date] [Secondary Remarketing
Date] [Final Remarketing Date] for remarketing pursuant to Section 4.6(c) of the
Pledge Agreement. The undersigned will, upon request of the Remarketing Agent,
execute and deliver any additional documents deemed by the Remarketing Agent or
by the Company to be necessary or desirable to complete the sale, assignment and
transfer of the Notes tendered hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions". The undersigned hereby instructs you, in the event of
Failed [Initial] [Secondary] [Final] Remarketing, upon receipt of the Notes
tendered herewith from the Remarketing Agent, to be delivered to the person(s)
and the address(es) indicated herein under "B. Delivery Instructions."
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With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Notes tendered hereby and that the undersigned is the record owner
of any Notes tendered herewith in physical form or a participant in The
Depository Trust Company ("DTC") and the beneficial owner of any Notes tendered
herewith by book-entry transfer to your account at DTC and (ii) agrees to be
bound by the terms and conditions of Section 4.6(c) of the Pledge Agreement.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date:_____________
__________________________________
By:_______________________________
Name:
Title:
Signature Guarantee:______________
_____________________________________________________________
Name
Social Security or other Taxpayer Identification Number, if any ________________
Address
___________________________
___________________________
_____________________________________________________________
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)
_______________________________________________________________________
3
B. DELIVERY INSTRUCTIONS
_______________________________________________________________________
In the event of a failed remarketing, Notes which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.
Name(s)
_______________________________________________________________________
(Please Print)
Address
(Please Print)
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(Zip Code)
_______________________________________________________________________
(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:_________________________________
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EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
BNY Midwest Trust Company,
2 North LaSalle Street
Suite 1020
Chicago, Illinois 60602
Re: Notes of The St. Paul Companies, Inc. (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of July 31, 2002 (the "Pledge Agreement")
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and JPMorgan Chase Bank, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from time
to time, that the undersigned elects to withdraw the $_____ aggregate principal
amount of Notes delivered to the Custodial Agent on __________, 2005 for
remarketing pursuant to Section 4.6(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 4.6(c) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
Date:_____________
__________________________________
By:_______________________________
Name:
Title:
Signature Guarantee:_____________
__________________________________
__________________________________
Name
Social Security or other Taxpayer
Identification Number, if any ___________________________
Address
__________________________________
__________________________________
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