Exhibit 99.5
THE CHUBB CORPORATION
and
BNY MIDWEST TRUST COMPANY, as Collateral Agent, Custodial Agent and
Securities Intermediary
and
BANK ONE TRUST COMPANY, N.A., as Warrant Agent
PLEDGE AGREEMENT
Dated as of December 2, 2002
TABLE OF CONTENTS
---------------
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions................................................... 3
ARTICLE 2
PLEDGE
SECTION 2.01. Pledge........................................................ 7
SECTION 2.02. Control....................................................... 8
SECTION 2.03. Termination................................................... 8
ARTICLE 3
DISTRIBUTIONS ON PLEDGED COLLATERAL
SECTION 3.01. Income and Distributions...................................... 8
SECTION 3.02. Principal Payments Following Termination Event................ 8
SECTION 3.03. Principal Payments Prior to or on Warrant Settlement Date..... 8
SECTION 3.04. Payments to Warrant Agent..................................... 9
SECTION 3.05. Assets Not Properly Released.................................. 9
ARTICLE 4
CONTROL
SECTION 4.01. Establishment of Collateral Account...........................10
SECTION 4.02. Treatment as Financial Assets.................................10
SECTION 4.03. Sole Control by Collateral Agent..............................10
SECTION 4.04. Securities Intermediary's Jurisdiction........................11
SECTION 4.05. No Other Claims...............................................11
SECTION 4.06. Investment and Release........................................11
SECTION 4.07. Statements and Confirmations..................................11
SECTION 4.08. Tax Allocations...............................................11
SECTION 4.09. No Other Agreements...........................................12
SECTION 4.10. Powers Coupled with an Interest...............................12
SECTION 4.11. Waiver of Lien; Waiver of Set-off.............................12
ARTICLE 5
INITIAL DEPOSIT; CREATION OF TREASURY UNITS AND RECREATION OF
CORPORATE UNITS
PAGE
SECTION 5.01. Initial Deposit of Senior Notes...............................12
SECTION 5.02. Creation of Treasury Units....................................13
SECTION 5.03. Recreation of Corporate Units.................................14
SECTION 5.04. Termination Event.............................................15
SECTION 5.05. Cash Settlement...............................................16
SECTION 5.06. Early Settlement and Cash Merger Early Settlement.............18
SECTION 5.07. Application of Proceeds in Settlement of Warrants.............19
SECTION 5.08. Special Event Redemption......................................22
ARTICLE 6
VOTING RIGHTS - PLEDGED SENIOR NOTES
SECTION 6.01. Voting Rights.................................................22
ARTICLE 7
RIGHTS AND REMEDIES
SECTION 7.01. Rights and Remedies of the Collateral Agent...................23
SECTION 7.02. Special Event Redemption......................................24
SECTION 7.03. Successful Remarketing........................................24
SECTION 7.04. Substitutions.................................................25
ARTICLE 8
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 8.01. Representations and Warranties................................25
SECTION 8.02. Covenants.....................................................26
ARTICLE 9
THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES
INTERMEDIARY
SECTION 9.01. Appointment, Powers and Immunities............................27
SECTION 9.02. Instructions of the Company...................................28
SECTION 9.03. Reliance by Collateral Agent and Securities Intermediary......28
SECTION 9.04. Certain Rights................................................29
SECTION 9.05. Merger, Conversion, Consolidation or Succession to Business...29
SECTION 9.06. Rights in Other Capacities....................................29
SECTION 9.07. Non-Reliance on Collateral Agent, the Custodial Agent and
Securities Intermediary.......................................30
SECTION 9.08. Compensation and Indemnity....................................30
SECTION 9.09. Failure to Act................................................31
PAGE
SECTION 9.10. Resignation of Collateral Agent, the Custodial Agent and
Securities Intermediary.....................................32
SECTION 9.11. Right to Appoint Agent or Advisor.............................33
SECTION 9.12. Survival......................................................33
SECTION 9.13. Exculpation...................................................33
ARTICLE 10
AMENDMENT
SECTION 10.01. Amendment Without Consent of Holders.........................34
SECTION 10.02. Amendment with Consent of Holders............................34
SECTION 10.03. Execution of Amendments......................................35
SECTION 10.04. Effect of Amendments.........................................36
SECTION 10.05. Reference of Amendments......................................36
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. No Waiver....................................................36
SECTION 11.02. Governing Law; Submission to Jurisdiction....................36
SECTION 11.03. Notices......................................................37
SECTION 11.04. Successors and Assigns.......................................37
SECTION 11.05. Counterparts.................................................37
SECTION 11.06. Severability.................................................37
SECTION 11.07. Expenses, Etc................................................37
SECTION 11.08. Security Interest Absolute...................................38
SECTION 11.09. Notice of Special Event, Special Event Redemption and
Termination Event..........................................39
PAGE
Exhibit A - Instruction from Warrant Agent to Collateral Agent
(Creation of Treasury Units)
Exhibit B - Instruction from Collateral Agent to Securities Intermediary
(Creation of Treasury Units)
Exhibit C - Instruction from Warrant Agent to Collateral Agent
(Recreation of Corporate Units)
Exhibit D - Instruction from Collateral Agent to Securities Intermediary
(Recreation of Corporate Units)
Exhibit E - Notice of Cash Settlement from Securities Intermediary to
Warrant Agent (Cash Settlement Amounts)
Exhibit F - Instruction to Custodial Agent
(Regarding Remarketing)
Exhibit G - Instruction to Custodial Agent
(Withdrawal from Remarketing)
iv
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of December 2, 2002 among THE CHUBB CORPORATION,
a New Jersey corporation (the "COMPANY"), BNY MIDWEST TRUST COMPANY, an Illinois
trust company, 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 UCC) with respect to the Collateral Account (in such capacity, together with
its successors in such capacity, the "SECURITIES INTERMEDIARY"), and BANK ONE
TRUST COMPANY, N.A., a national banking association, as warrant agent and as
attorney-in-fact of the Holders from time to time of the Units (in such
capacity, together with its successors in such capacity, the "WARRANT AGENT")
under the Warrant Agreement.
RECITALS
WHEREAS, the Company and the Warrant Agent are parties to the Warrant
Agreement dated as of the date hereof (as modified and supplemented and in
effect from time to time, the "WARRANT AGREEMENT"), pursuant to which 24,000,000
Corporate Units will be issued.
WHEREAS, each Corporate Unit, at issuance, represents (a) a stock warrant
(a "WARRANT") pursuant to which the Holder will pay to the Company on the
Warrant Settlement Date the Settlement Price and thereby purchase a number of
shares of the Company's common stock, par value $1.00 per share ("COMMON
STOCK"), equal to the Settlement Rate and (b) either a Senior Note or an
Applicable Ownership Interest in the Treasury Portfolio.
WHEREAS, pursuant to the terms of the Warrant Agreement and the Warrants,
the Holders of the Units have irrevocably authorized the Warrant Agent, as
attorney-in-fact of such Holders, among other things, to execute and deliver
this Agreement on behalf of such Holders and to grant the pledge provided herein
of the Collateral to secure the Obligations.
NOW, THEREFORE, the Company, the Collateral Agent, the Custodial Agent,
the Securities Intermediary and the Warrant Agent agree as follows:
ARTICLE 1
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DEFINITIONS
SECTION 1.01. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision;
(b) the following terms which are defined in the UCC shall have the
meanings set forth therein: "CERTIFICATED SECURITY," "CONTROL," "FINANCIAL
ASSET," "ENTITLEMENT ORDER," "SECURITIES ACCOUNT" and "SECURITY ENTITLEMENT";
(c) capitalized terms used herein and not defined herein have the meanings
assigned to them in the Warrant Agreement; and
(d) the following terms have the meanings given to them in this Section
1.01(d):
"AGREEMENT" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time.
"CASH" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"COLLATERAL" means the collective reference to:
(i) the Collateral Account and all investment property and other
financial assets from time to time credited to the Collateral Account and
all security entitlements with respect thereto, including, without
limitation, (A) the Senior Notes and security entitlements relating
thereto that are represented by the Corporate Units from time to time, (B)
the Applicable Ownership Interests (as specified in clause (i) of the
definition of such term) of the Holders with respect to the Treasury
Portfolio that are represented by the Corporate Units from time to time;
(C) any Treasury Securities and security entitlements relating thereto
delivered from time to time upon creation of Treasury Units in accordance
with Section 5.02 hereof and (D) payments made by Holders pursuant to
Section 5.05 hereof;
(ii) all powers and rights now owned or hereafter acquired under or
with respect to the Collateral; and
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(iii) all Proceeds of any of the foregoing (whether such Proceeds
arise before or after the commencement of any proceeding under any
applicable bankruptcy, insolvency or other similar law, by or against the
pledgor or with respect to the pledgor).
"COLLATERAL ACCOUNT" means the securities account of BNY Midwest Trust
Company, an Illinois trust company, as Collateral Agent, maintained by the
Securities Intermediary and designated "BNY Midwest Trust Company, as Collateral
Agent of The Chubb Corporation, as pledgee of Bank One Trust Company, N.A., as
the Warrant Agent on behalf of and as attorney-in-fact for the Holders".
"COMPANY" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such pursuant to the
applicable provisions of the Warrant Agreement, and thereafter "Company" shall
mean such successor.
"CORPORATE UNIT" means the collective rights and obligations of a Holder
of a Corporate Units Certificate in respect of a Senior Note or an appropriate
Applicable Ownership Interests in the Treasury Portfolio, as the case may be,
subject in each case to the Pledge thereof, and the Warrant represented thereby;
provided that the appropriate Applicable Ownership Interests (as specified in
clause (ii) of the definition of such term) in the Treasury Portfolio shall not
be subject to the Pledge.
"CORPORATE UNITS CERTIFICATE " means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Corporate Units
specified on such certificate.
"OBLIGATIONS" means, with respect to each Holder, all obligations and
liabilities of such Holder under such Holder's Warrant, the Warrant Agreement
and this Agreement or any other document made, delivered or given in connection
herewith or therewith, in each case whether on account of principal, interest
(including, without limitation, interest accruing before and after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Holder, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
fees, indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Company or the Collateral Agent or
the Securities Intermediary that are required to be paid by the Holder pursuant
to the terms of any of the foregoing agreements).
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"PERMITTED INVESTMENTS" means any one of the following, in each case
maturing on the Business Day following the date of acquisition:
(1) any evidence of indebtedness with an original maturity of 365
days or less issued, or directly and fully guaranteed or insured, by the
United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America
is pledged in support of the timely payment thereof or such indebtedness
constitutes a general obligation of it);
(2) deposits, certificates of deposit or acceptances with an
original maturity of 365 days or less of any institution which is a member
of the Federal Reserve System having combined capital and surplus and
undivided profits of not less than $500 million at the time of deposit
(and which may include the Collateral Agent);
(3) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to
in clause (2);
(4) repurchase agreements and reverse repurchase agreements relating
to marketable direct obligations issued or unconditionally guaranteed by
the United States of America or issued by any agency thereof and backed as
to timely payment by the full faith and credit of the United States of
America;
(5) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated
under the 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
(6) investments in money market funds (including, but not limited
to, money market funds managed by the Collateral Agent or an affiliate of
the Collateral Agent) registered under the Investment Company Act of 1940,
as amended, rated in the highest applicable rating category by S&P or
Moody's.
"PERSON" means any legal person, including, without limitation, any
individual, corporation, estate, partnership, joint venture, association,
joint-stock company, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
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"PLEDGE" means the lien and security interest created by this Agreement.
"PLEDGED APPLICABLE OWNERSHIP INTERESTS" means the Applicable Ownership
Interests (as specified in clause (i) of the definition thereof) of the Holders
with respect to the Treasury Portfolio and security entitlements with respect
thereto from time to time credited to the Collateral Account and not then
released from the Pledge.
"PLEDGED SENIOR NOTES" means Senior Notes and security entitlements with
respect thereto from time to time credited to the Collateral Account and not
then released from the Pledge.
"PLEDGED SECURITIES" means the Pledged Senior Notes, the Pledged
Applicable Ownership Interests and the Pledged Treasury Securities,
collectively.
"PLEDGED TREASURY SECURITIES" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.
"PROCEEDS" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, cash, instruments, securities,
financial assets and other property received, receivable or otherwise
distributed upon the sale (including, without limitation, the Remarketing),
exchange, collection or disposition of any financial assets from time to time
held in the Collateral Account.
"SEPARATE SENIOR NOTES" means Senior Notes which are not represented by
Corporate Units.
"TRADES" means the Treasury/Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.
"TRADES REGULATIONS" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations are
used herein as therein defined.
6
"TRANSFER" means (i) in the case of certificated securities in registered
form, delivery as provided in Section 8-301(a) of the UCC, indorsed to the
transferee or in blank by an effective endorsement; (ii) in the case of Treasury
Securities, registration of the transferee as the owner of such Treasury
Securities on TRADES; and (iii) in the case of security entitlements, including,
without limitation, security entitlements with respect to Treasury Securities, a
securities intermediary indicating by book entry that such security entitlement
has been credited to the transferee's securities account.
"TREASURY SECURITIES" means zero-coupon U.S. treasury securities that
mature on or prior to November 15, 2005 (CUSIP No. 912820BQ9).
"TREASURY UNIT" means, following the substitution of Treasury Securities
for Senior Notes as collateral to secure a Holder's Obligations, the collective
rights and obligations of a Holder of a Treasury Units Certificate in respect of
such Treasury Securities, subject to the Pledge thereof, and the related
Warrant.
"TREASURY UNITS CERTIFICATE" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Treasury Units specified on
such certificate.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York from time to time.
"VALUE" means, with respect to any item of Collateral on any date, as to
(1) Cash, the face amount thereof, (2) Treasury Securities or Senior Notes, the
aggregate principal amount thereof at maturity and (3) Applicable Ownership
Interests (as specified in clause (i) of the definition of such term), the
appropriate percentage of the aggregate principal amount at maturity of the
Treasury Portfolio.
"WARRANT AGENT" has the meaning specified in the paragraph preceding the
recitals of this Agreement.
ARTICLE 2
PLEDGE
SECTION 2.01. Pledge. Each Holder, acting through the Warrant Agent as
such Holder's attorney-in-fact, and the Warrant Agent, acting solely as such
attorney-in-fact, hereby pledges and grants to the Collateral Agent, as agent of
and for the benefit of the Company, a continuing first priority security
interest in and
7
to, and a lien upon and right of set-off against, all of such Holder's right,
title and interest in and to the Collateral to secure the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of such Holder's Obligations. The Collateral Agent shall have all of
the rights, remedies and recourses with respect to the Collateral afforded a
secured party by the UCC, in addition to, and not in limitation of, the other
rights, remedies and recourses afforded to the Collateral Agent by this
Agreement.
SECTION 2.02. Control. The Collateral Agent shall have control of the
Collateral Account pursuant to the provisions of Article 4 of this Agreement.
SECTION 2.03. Termination. As to each Holder, this Agreement and the
Pledge created hereby shall terminate upon the satisfaction of such Holder's
Obligations. Upon such termination, the Collateral Agent shall instruct the
Securities Intermediary to Transfer such Holder's portion of the Collateral to
the Warrant Agent for distribution to such Holder, free and clear of the Pledge
created hereby.
ARTICLE 3
DISTRIBUTIONS ON PLEDGED COLLATERAL
SECTION 3.01. Income and Distributions. The Collateral Agent shall
transfer all income and distributions received by the Securities Intermediary on
account of the Pledged Senior Notes, the Pledged Applicable Ownership Interests
or Permitted Investments from time to time held in the Collateral Account (ABA
No. 048503, A/C No. 021000018, Re: The Chubb Corporation) to the Warrant Agent
for distribution to the applicable Holders as provided in the Warrants or
Warrant Agreement.
SECTION 3.02. Principal Payments Following Termination Event. Following a
Termination Event, the Collateral Agent shall instruct the Securities
Intermediary to transfer all principal payments it receives, if any, in respect
of (1) the Pledged Senior Notes, (2) the Pledged Applicable Ownership Interests,
and (3) the Pledged Treasury Securities, to the Warrant Agent for the benefit of
the applicable Holders for distribution to such Holders in accordance with their
respective interests, free and clear of the Pledge created hereby.
SECTION 3.03. Principal Payments Prior to or on Warrant Settlement Date.
8
(a) Subject to the provisions of Sections 5.06 and 5.08, and except as
provided in clause 3.03(b) below, if no Termination Event shall have occurred,
all principal payments received by the Securities Intermediary in respect of (1)
the Pledged Senior Notes, (2) the Pledged Applicable Ownership Interests and (3)
the Pledged Treasury Securities, shall be held and invested in Permitted
Investments until the Warrant Settlement Date, and transferred to the Company on
the Warrant Settlement Date as provided in Section 5.07 hereof. Any balance
remaining in the Collateral Account shall be released from the Pledge and
transferred to the Warrant Agent for the benefit of the applicable Holders for
distribution to such Holders in accordance with their respective interests, free
and clear of the Pledge created thereby. The Company shall instruct the
Collateral Agent in writing as to the type of Permitted Investments in which any
payments made under this Section shall be invested, provided, however, that if
the Company fails to deliver such instructions by 10:30 a.m. (New York City
time) on the day such payments are received by the Collateral Agent, the
Collateral Agent shall instruct the Securities Intermediary to invest such
payments in the Permitted Investments described in clause (6) of the definition
of Permitted Investments. In no event shall the Collateral Agent be liable for
the selection of Permitted Investments or for investment losses incurred
thereon. The Collateral Agent shall have no liability in respect of losses
incurred as a result of the failure of the Company to provide timely written
investment direction.
(b) All principal payments received by the Securities Intermediary in
respect of (1) the Senior Notes, (2) the Applicable Ownership Interests (as
specified in clause (i) of the definition thereof) in the Treasury Portfolio and
(3) the Treasury Securities or security entitlements thereto, that, in each
case, have been released from the Pledge pursuant hereto shall be transferred to
the Warrant Agent for the benefit of the applicable Holders for distribution to
such Holders in accordance with their respective interests.
SECTION 3.04. Payments to Warrant Agent. The Securities Intermediary shall
use commercially reasonable efforts to deliver payments to the Warrant Agent
hereunder to the account designated by the Warrant Agent for such purpose not
later than 12:00 p.m. (New York City time) on the Business Day such payment is
received by the Securities Intermediary; provided, however, that if such payment
is received on a day that is not a Business Day or after 11:00 a.m. (New York
City time) on a Business Day, then the Securities Intermediary shall use all
commercially reasonable efforts to deliver such payment to the Warrant Agent no
later than 10:30 a.m. (New York City time) on the next succeeding Business Day.
SECTION 3.05. Assets Not Properly Released. If the Warrant Agent or any
Holder shall receive any principal payments on account of financial assets
credited
9
to the Collateral Account and not released from the Pledge in accordance with
this Agreement, the Warrant Agent or such Holder shall hold the same as trustee
of an express trust for the benefit of the Company and, upon receipt of an
Officers' Certificate of the Company so directing, promptly deliver the same to
the Securities Intermediary for credit to the Collateral Account or to the
Company for application to the Obligations of the Holders, and the Warrant Agent
and Holders shall acquire no right, title or interest in any such payments of
principal amounts so received. The Warrant Agent shall have no liability under
this Section 3.05 unless and until it has been notified in writing that such
payment was delivered to it erroneously and shall have no liability for any
action taken, suffered or omitted to be taken prior to its receipt of such
notice.
ARTICLE 4
CONTROL
SECTION 4.01. Establishment of Collateral Account. The Securities
Intermediary hereby confirms that:
(a) the Securities Intermediary has established the Collateral Account;
(b) the Collateral Account is a securities account;
(c) subject to the terms of this Agreement, the Securities Intermediary
shall identify in its records the Collateral Agent as the entitlement holder
entitled to exercise the rights that comprise any financial asset credited to
the Collateral Account;
(d) all property delivered to the Securities Intermediary pursuant to this
Agreement or the Warrant Agreement, including any Applicable Ownership Interests
in the Treasury Portfolio and the Permitted Investments, will be credited
promptly to the Collateral Account; and
(e) all securities or other property underlying any financial assets
credited to the Collateral Account shall be (i) registered in the name of the
Warrant Agent and indorsed to the Securities Intermediary or in blank, (ii)
registered in the name of the Securities Intermediary or (iii) credited to
another securities account maintained in the name of the Securities
Intermediary. In no case will any financial asset credited to the Collateral
Account be registered in the name of the Warrant
10
Agent or any Holder or specially indorsed to the Warrant Agent or any Holder
unless such financial asset has been further indorsed to the Securities
Intermediary or in blank.
SECTION 4.02. Treatment as Financial Assets. Each item of property
(whether investment property, financial asset, security, instrument or cash)
credited to the Collateral Account shall be treated as a financial asset.
SECTION 4.03. Sole Control by Collateral Agent. Except as provided in
Section 6.01, at all times prior to the termination of the Pledge, the
Collateral Agent shall have sole control of the Collateral Account, and the
Securities Intermediary shall take instructions and directions with respect to
the Collateral Account solely from the Collateral Agent. If at any time the
Securities Intermediary shall receive an entitlement order issued by the
Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Warrant Agent or any Holder or any other Person. Except as otherwise
permitted under this Agreement, until termination of the Pledge, the Securities
Intermediary will not comply with any entitlement orders issued by the Warrant
Agent or any Holder.
SECTION 4.04. Securities Intermediary's Jurisdiction. The Collateral
Account, and the rights and obligations of the Securities Intermediary, the
Collateral Agent, the Warrant Agent and the Holders with respect thereto, shall
be governed by the laws of the State of New York. Regardless of any provision in
any other agreement, for purposes of the UCC, New York shall be deemed to be the
Securities Intermediary's jurisdiction.
SECTION 4.05. No Other Claims. Except for the claims and interest of the
Collateral Agent and of the Warrant Agent and the Holders in the Collateral
Account, the Securities Intermediary (without having conducted any
investigation) does not know of any claim to, or interest in, the Collateral
Account or in any financial asset credited thereto. If any Person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against the Collateral
Account or in any financial asset carried therein, the Securities Intermediary
will promptly notify the Collateral Agent and the Warrant Agent.
SECTION 4.06. Investment and Release. All proceeds of financial assets
from time to time deposited in the Collateral Account shall be invested and
reinvested as provided in this Agreement. At all times prior to termination of
the Pledge, no property shall be released from the Collateral Account except in
accordance with this Agreement or upon written instructions of the Collateral
Agent.
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SECTION 4.07. Statements and Confirmations. The Securities Intermediary
will promptly send copies of all statements, confirmations and other
correspondence concerning the Collateral Account and any financial assets
credited thereto simultaneously to each of the Warrant Agent and the Collateral
Agent at their addresses for notices under this Agreement.
SECTION 4.08. Tax Allocations. The Warrant Agent shall report all items of
income, gain, expense and loss recognized in the Collateral Account, to the
extent such reporting is required by law, to the Internal Revenue Service
authorities in the manner required by law. Neither the Securities Intermediary
nor the Collateral Agent shall have any tax reporting duties hereunder.
SECTION 4.09. No Other Agreements. The Securities Intermediary has not
entered into, and prior to the termination of the Pledge will not enter into,
any agreement with any other Person relating to the Collateral Account or any
financial assets credited thereto, including, without limitation, any agreement
to comply with entitlement orders of any Person other than the Collateral Agent.
SECTION 4.10. Powers Coupled with an Interest. The rights and powers
granted in this Article 4 to the Collateral Agent have been granted in order to
perfect its security interests in the Collateral Account, are powers coupled
with an interest and will be affected neither by the bankruptcy of the Warrant
Agent or any Holder nor by the lapse of time. The obligations of the Securities
Intermediary under this Article 4 shall continue in effect until the termination
of the Pledge.
SECTION 4.11. Waiver of Lien; Waiver of Set-off. The Securities
Intermediary waives any security interest, lien or right to make deductions or
setoffs that it may now have or hereafter acquire in or with respect to the
Collateral Account, any financial asset credited thereto or any security
entitlement in respect thereof. Neither the financial assets credited to the
Collateral Account nor the security entitlements in respect thereof will be
subject to deduction, set-off, banker's lien, or any other right in favor of any
person other than the Company.
ARTICLE 5
INITIAL DEPOSIT; CREATION OF TREASURY UNITS AND RECREATION
OF CORPORATE UNITS
SECTION 5.01. Initial Deposit of Senior Notes. (a) Prior to or
concurrently with the execution and delivery of this Agreement, the Warrant
Agent, on behalf
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of the initial Holders of the Corporate Units, shall Transfer to the Securities
Intermediary, for credit to the Collateral Account, the Senior Notes or security
entitlements relating thereto, and, in the case of security entitlements, the
Securities Intermediary shall indicate by book-entry that a securities
entitlement to such Senior Notes has been credited to the Collateral Account.
(b) The Collateral Agent may, at any time or from time to time, in its
sole discretion, cause any or all securities or other property underlying any
financial assets credited to the Collateral Account to be registered in the name
of the Securities Intermediary, the Collateral Agent or their respective
nominees; provided, however, that unless any Event of Default (as defined in the
Indenture) shall have occurred and be continuing, the Collateral Agent agrees
not to cause any Senior Notes to be so re-registered.
SECTION 5.02. Creation of Treasury Units.
(a) So long as the Treasury Portfolio has not replaced the Senior Notes
represented by the Corporate Units, a Holder of Corporate Units shall have the
right, at any time prior to 5:00 p.m. (New York City time) on the fifth Business
Day immediately preceding the Warrant Settlement Date, to create Treasury Units
by substitution of Treasury Securities or security entitlements with respect
thereto for the Pledged Senior Notes represented by such Holder's Corporate
Units, in integral multiples of 40 Corporate Units by:
(i) Transferring to the Securities Intermediary for credit to the
Collateral Account Treasury Securities or security entitlements with
respect thereto having a Value equal to the aggregate principal amount of
the Pledged Senior Notes to be released, accompanied by a notice,
substantially in the form of Exhibit C to the Warrant Agreement, whereupon
the Warrant Agent shall deliver to the Collateral Agent a notice,
substantially in the form of Exhibit A hereto, (A) stating that such
Holder has notified the Warrant Agent that such Holder has Transferred
Treasury Securities or security entitlements with respect thereto to the
Collateral Agent for credit to the Collateral Account, (B) stating the
Value of the Treasury Securities or security entitlements with respect
thereto Transferred by such Holder and (C) requesting that the Collateral
Agent release from the Pledge the Pledged Senior Notes that are
represented by such Corporate Units; and
(ii) delivering the related Corporate Units to the Warrant Agent.
Upon receipt of such notice and confirmation that Treasury Securities or
security entitlements with respect thereto have been credited to the Collateral
13
Account as described in such notice, the Collateral Agent shall instruct the
Securities Intermediary by a notice, substantially in the form of Exhibit B, to
release such Pledged Senior Notes from the Pledge by Transfer to the Warrant
Agent for distribution to such Holder or as instructed by such Holder, free and
clear of the Pledge created hereby.
If the Treasury Portfolio has replaced the Senior Notes represented by the
Corporate Units and subject to the conditions of the Warrant Agreement, a Holder
may, at any time on or prior to the second Business Day immediately preceding
the Warrant Settlement Date, substitute Treasury Securities for the Applicable
Ownerships Interests in the Treasury Portfolio with respect to such Corporate
Units, but only in multiples of 4,000 Corporate Units. In such an event, the
Holder shall transfer the required amount of Treasury Securities to the
Securities Intermediary, for credit to the Collateral Account, and the Warrant
Agent shall request the Collateral Agent to instruct the Securities Intermediary
to release the Pledge of and transfer to the Holder or as instructed by such
Holder the appropriate Applicable Ownership Interests in the Treasury Portfolio
in the manner set forth above.
(b) Upon credit to the Collateral Account of Treasury Securities or
security entitlements with respect thereto delivered by a Holder of Corporate
Units and receipt of the related instruction from the Collateral Agent, the
Securities Intermediary shall release such Pledged Senior Notes or Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, and shall
promptly Transfer the same to the Warrant Agent for distribution to such Holder,
free and clear of the Pledge created hereby.
SECTION 5.03. Recreation of Corporate Units.
(a) So long as the Treasury Portfolio has not replaced the Senior Notes
represented by the Corporate Units, at any time prior to 5:00 p.m. (New York
City time) on the fifth Business Day immediately preceding the Warrant
Settlement Date, a Holder of Treasury Units shall have the right to recreate
Corporate Units by substitution of Senior Notes or security entitlements with
respect thereto for Pledged Treasury Securities in integral multiples of 40
Treasury Units by:
(i) Transferring to the Securities Intermediary for credit to the
Collateral Account Senior Notes or security entitlements with respect
thereto having a principal amount equal to the Value of the Pledged
Treasury Securities to be released, accompanied by a notice, substantially
in the form of Exhibit C to the Warrant Agreement, whereupon the Warrant
Agent shall deliver to the Collateral Agent a notice, substantially in the
form of Exhibit C hereto, stating that such Holder has Transferred
14
the Senior Notes or security entitlements with respect thereto to the
Collateral Account for credit to the Collateral Account and requesting
that the Collateral Agent release from the Pledge the Pledged Treasury
Securities related to such Treasury Units; and
(ii) delivering the related Treasury Units to the Warrant Agent.
Upon receipt of such notice and confirmation that Senior Notes or security
entitlements with respect thereto have been credited to the Collateral Account
as described in such notice, the Collateral Agent shall instruct the Securities
Intermediary by a notice substantially in the form of Exhibit D hereto to
release such Pledged Treasury Securities from the Pledge by Transfer to the
Warrant Agent for distribution to such Holder, free and clear of the Pledge
created hereby.
If the Treasury Portfolio has replaced the Senior Notes represented by the
Corporate Units, a Holder may, at any time on or prior to the second Business
Day immediately preceding the Warrant Settlement Date, substitute the Applicable
Ownership Interests in the Treasury Portfolio for the Pledged Treasury
Securities, but only in multiples of 4,000 Treasury Units. In such an event, the
Holder shall Transfer the required Applicable Ownership Interests in the
Treasury Portfolio to the Securities Intermediary, for credit to the Collateral
Account, and the Warrant Agent shall request the Collateral Agent to instruct
the Securities Intermediary to release and transfer to the Holder the
appropriate Pledged Treasury Securities in the manner set forth above.
(b) Upon credit to the Collateral Account of Senior Notes or security
entitlements with respect thereto delivered by a Holder of Treasury Units and
receipt of the related instruction from the Collateral Agent, the Securities
Intermediary shall release such Pledged Treasury Securities or Applicable
Ownership Interests in the Treasury Portfolio and shall promptly Transfer the
same to the Warrant Agent for distribution to such Holder, free and clear of the
Pledge created hereby.
SECTION 5.04. Termination Event.
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Warrant Agent that a Termination Event has occurred, the
Collateral Agent shall release all Collateral from the Pledge and shall promptly
instruct the Securities Intermediary to Transfer:
(i) any Pledged Senior Notes or security entitlements with respect
thereto or Pledged Applicable Ownership Interests;
15
(ii) any Pledged Treasury Securities, and
(iii) any payments by Holders (or the Permitted Investments of such
payments) pursuant to Section 5.05 hereof,
to the Warrant Agent for the benefit of the Holders for distribution to such
Holders, in accordance with their respective interests, free and clear of the
Pledge created hereby; provided, however, if any Holder shall be entitled to
receive less than $1,000 with respect to its interest in the Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio, the Warrant Agent shall dispose of such interest for
cash and deliver to such Holder cash in lieu of delivering the Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio.
(b) If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Senior Notes, Pledged Applicable Ownership Interests, Pledged Treasury
Securities and payments by Holders (or the Permitted Investments of such
payments) pursuant to Section 5.05 hereof and Proceeds of any of the foregoing,
as the case may be, as provided by this Section 5.04, the Warrant Agent shall:
(i) use its best efforts to obtain an opinion of a nationally
recognized law firm to the effect that, notwithstanding the Company's
being the debtor in such a bankruptcy case, the Collateral Agent will not
be prohibited from releasing or Transferring the Collateral as provided in
this Section 5.04, and shall deliver or cause to be delivered such opinion
to the Collateral Agent within ten days after the occurrence of such
Termination Event, and if (A) the Warrant Agent shall be unable to obtain
such opinion within ten days after the occurrence of such Termination
Event or (B) the Collateral Agent shall continue, after delivery of such
opinion, to refuse to effectuate the release and Transfer of all Pledged
Senior Notes, Pledged Applicable Ownership Interests, Pledged Treasury
Securities and the payments by Holders (or the Permitted Investments of
such payments) pursuant to Section 5.05 hereof and Proceeds of any of the
foregoing, as the case may be, as provided in this Section 5.04, then the
Warrant Agent shall within fifteen days after the occurrence of such
Termination Event commence an action or proceeding in the court having
jurisdiction of the Company's case under the Bankruptcy Code seeking an
order requiring the Collateral Agent to effectuate the release and
transfer of all Pledged Senior Notes, Pledged Applicable Ownership
Interests, Pledged Treasury Securities and the payments by Holders (or the
Permitted Investments of such payments) pursuant to Section 5.05 hereof
16
and Proceeds of any of the foregoing, or as the case may be, as provided
by this Section 5.04; or
(ii) commence an action or proceeding like that described in clause
5.04(b)(i) hereof within ten days after the occurrence of such Termination
Event.
SECTION 5.05. Cash Settlement.
(a) Upon receipt by the Collateral Agent of (1) a notice from the Warrant
Agent promptly after the receipt by the Warrant Agent of a notice from a Holder
of Corporate Units or Treasury Units that such Holder has elected, in accordance
with the procedures specified in Section 5.02(c)(i) or (f)(i) of the Warrant
Agreement, respectively, to effect a Cash Settlement and (2) payment by such
Holder by deposit in the Collateral Account prior to 11:00 a.m. (New York City
time) on the fourth Business Day immediately preceding the Warrant Settlement
Date of the Settlement Price in lawful money of the United States by certified
or cashier's check or wire transfer of immediately available funds payable to or
upon the order of the Securities Intermediary, then the Collateral Agent shall:
(i) instruct the Securities Intermediary promptly to invest any such
Cash in Permitted Investments;
(ii) instruct the Securities Intermediary to release from the Pledge
such Holder's related Pledged Senior Notes, Pledged Applicable Ownership
Interests or Pledged Treasury Securities, as applicable, as to which such
Holder has effected a Cash Settlement pursuant to this Section 5.05(a);
and
(iii) instruct the Securities Intermediary to Transfer all such
Pledged Senior Notes, Pledged Applicable Ownership Interests or the
Pledged Treasury Securities, as the case may be, to the Warrant Agent for
distribution to such Holder, in each case free and clear of the Pledge
created hereby.
The Company shall instruct the Collateral Agent in writing as to the type
of Permitted Investments in which any such Cash shall be invested; provided,
however, that if the Company fails to deliver such written instructions by 10:30
a.m. (New York City time) on the day such Cash is received by the Collateral
Agent or to be reinvested by the Securities Intermediary, the Collateral Agent
shall instruct the Securities Intermediary to invest such Cash in the Permitted
Investments described in clause (6) of the definition of Permitted Investments.
In
17
no event shall the Collateral Agent or Securities Intermediary be liable for the
selection of Permitted Investments or for investment losses incurred thereon.
The Collateral Agent and Securities Intermediary shall have no liability in
respect of losses incurred as a result of the failure of the Company to provide
timely written investment direction.
Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Warrant Settlement Date, the Collateral Agent shall instruct
the Securities Intermediary to (A) pay the portion of such proceeds and deliver
any certified or cashier's checks received, in an aggregate amount equal to the
Settlement Price, to the Company on the Warrant Settlement Date, and (B) release
any amounts in excess of the Settlement Price earned from such Permitted
Investments to the Warrant Agent for distribution to such Holder.
(b) If a Holder of Corporate Units (if the Treasury Portfolio has not
replaced the Senior Notes represented by such Corporate Units) (i) fails to
notify the Warrant Agent of its intention to make a Cash Settlement as provided
in paragraph 5.02(c)(i) of the Warrant Agreement or (ii) does notify the Warrant
Agent of its intention to pay the Settlement Price in cash, but fails to make
such payment as required by paragraph 5.02(c)(ii) of the Warrant Agreement, such
Holder shall be deemed to have consented to the disposition of such Holder's
Pledged Senior Notes in accordance with paragraph 5.02(c)(iii) of the Warrant
Agreement.
(c) If a Holder of a Treasury Unit or a Holder of a Corporate Unit (if the
Treasury Portfolio has replaced the Senior Notes represented by such Corporate
Unit) (i) fails to notify the Warrant Agent of its intention to make a Cash
Settlement as provided in paragraph 5.02(f)(i) of the Warrant Agreement or (ii)
does notify the Warrant Agent as provided in paragraph 5.02(f)(ii) of the
Warrant Agreement of its intention to pay the Settlement Price in cash, but
fails to make such payment as required by paragraph 5.02(f)(ii) of the Warrant
Agreement, such Holder shall be deemed to have elected to pay the Settlement
Price in accordance with paragraph 5.02(f)(iii) of the Warrant Agreement.
(d) As soon as practicable after 11:00 a.m. (New York City time) on the
fourth Business Day immediately preceding the Warrant Settlement Date, the
Collateral Agent shall deliver to the Warrant Agent a notice, substantially in
the form of Exhibit E hereto, stating (i) the amount of Cash that it has
received with respect to the Cash Settlement of Corporate Units, (ii) the amount
of Cash that it has received with respect to the Cash Settlement of Treasury
Units and (iii) the amount of Pledged Senior Notes to be remarketed in the Final
Remarketing pursuant to Section 5.02(c)(iii) of the Warrant Agreement.
18
SECTION 5.06. Early Settlement and Cash Merger Early Settlement. Upon
receipt by the Collateral Agent of a notice from the Warrant Agent that a Holder
of Units has elected to effect either (i) Early Settlement of its obligations
under the Warrants represented by such Units in accordance with the terms of the
Warrants and Section 5.07 of the Warrant Agreement or (ii) Cash Merger Early
Settlement of its obligations under the Warrants represented by such Units in
accordance with the terms of the Warrants and Section 5.04(b)(2) of the Warrant
Agreement (which notice shall set forth the number of such Warrants as to which
such Holder has elected to effect Early Settlement or Cash Merger Early
Settlement), and that the Warrant Agent has received from such Holder, and paid
to the Company as confirmed in writing by the Company, the related Settlement
Price pursuant to the terms of the Warrants and the Warrant Agreement and that
all conditions to such Early Settlement or Cash Merger Early Settlement, as the
case may be, have been satisfied, then the Collateral Agent shall release from
the Pledge, (1) Pledged Senior Notes or the Pledged Applicable Ownership
Interests in the case of a Holder of Corporate Units or (2) Pledged Treasury
Securities, in the case of a Holder of Treasury Units, in each case with a Value
equal to the product of (x) the Stated Amount times (y) the number of Warrants
as to which such Holder has elected to effect Early Settlement or Cash Merger
Early Settlement, and shall instruct the Securities Intermediary to Transfer all
such Pledged Applicable Ownership Interests or Pledged Senior Notes or Pledged
Treasury Securities, as the case may be, to the Warrant Agent for distribution
to such Holder, in each case free and clear of the Pledge created hereby. A
holder of Treasury Units may settle early only in integral multiples of 40
Treasury Units, and a Holder of Corporate Units, if the Treasury Portfolio has
replaced the Senior Notes represented by such Corporate Units, may settle early
only in integral multiples of 4,000 Corporate Units.
SECTION 5.07. Application of Proceeds in Settlement of Warrants.
(a) If a Holder of Corporate Units (if the Treasury Portfolio has not
replaced the Senior Notes represented by such Corporate Units) has not elected
to make an effective Cash Settlement by notifying the Warrant Agent in the
manner provided for in Section 5.02(c)(i) of the Warrant Agreement or does
notify the Warrant Agent as provided in paragraph 5.02(c)(i) of the Warrant
Agreement of its intention to pay the Settlement Price in cash, but fails to
make such payment as required by paragraph 5.02(c)(ii) of the Warrant Agreement,
such Holder shall be deemed to have elected to pay for the shares of Common
Stock to be issued under such Warrants from the Proceeds of the Final
Remarketing of the related Pledged Senior Notes. In the event of a Successful
Final Remarketing, the Collateral Agent shall instruct the Securities
Intermediary to Transfer the related Pledged Senior Notes to the Remarketing
Agent upon confirmation of deposit by the Remarketing Agent of the Proceeds of
such Final Remarketing (less, to the extent permitted by
19
the Remarketing Agreement, the Remarketing Fee) in the Collateral Account. The
Collateral Agent shall instruct the Securities Intermediary to invest the
Proceeds of the Final Remarketing in Permitted Investments set forth in clause
(6) of the definition of Permitted Investments. On the Warrant Settlement Date,
the Collateral Agent shall, in consultation with the Warrant Agent, instruct the
Securities Intermediary to remit a portion of the Proceeds from such Final
Remarketing equal to the aggregate principal amount of such Pledged Senior Notes
to the Company to satisfy in full such Holder's obligations to pay the
Settlement Price to purchase the shares of Common Stock under the related
Warrants and to remit the balance of the Proceeds from the Final Remarketing, if
any, to the Warrant Agent for distribution to such Holder.
If the Remarketing Agent advises the Collateral Agent in writing that
there has been a Failed Final Remarketing, each Holder of Corporate Units (if
the Treasury Portfolio has not replaced the Senior Notes represented by such
Corporate Units) that has not elected to make an effective Cash Settlement by
notifying the Warrant Agent in the manner provided for in Section 5.02(c)(i) of
the Warrant Agreement or does notify the Warrant Agent as provided in paragraph
5.02(c)(i) of the Warrant Agreement of its intention to pay the Settlement Price
in cash, but fails to make such payment as required by paragraph 5.02(c)(ii) of
the Warrant Agreement, shall be deemed to have exercised such Holder's Put Right
with respect to such Senior Notes and to have elected to have a portion of the
Proceeds of the Put Right set-off against such Holder's obligation to pay the
aggregate Settlement Price for the shares of Common Stock to be issued under
such Warrants in full satisfaction of such Holders' obligations under the
Warrants. Following such set-off, the Holder's obligations to pay the Settlement
Price for the shares of Common Stock will be deemed to be satisfied in full, and
the Collateral Agent shall cause the Securities Intermediary to release the
Pledged Senior Notes from the Collateral Account and shall promptly transfer the
Pledged Senior Notes to the Company. Thereafter, the Collateral Agent shall
promptly remit the remaining portion the Proceeds of the Holder's exercise of
the Put Right in excess of the aggregate Settlement Price for the shares of
Common Stock to be issued under such Warrants to the Warrant Agent for payment
to the Holder of the Corporate Units to which such Senior Notes relate.
(b) If a Holder of a Treasury Unit or a Holder of a Corporate Unit (if the
Treasury Portfolio has replaced the Senior Notes represented by such Corporate
Unit) has not elected to make an effective Cash Settlement by notifying the
Warrant Agent in the manner provided for in Section 5.02(f)(i) of the Warrant
Agreement, or has given such notice but failed to make such payment in the
manner required by Section 5.02(f)(ii) of the Warrant Agreement, such Holder
shall be deemed to have elected to pay for the shares of Common Stock to be
issued under such Warrants from the Proceeds of the related Pledged Treasury
20
Securities or Pledged Applicable Ownership Interests, as the case may be.
Promptly, after 11:00 a.m. (New York City time) on the Business Day immediately
prior to the Warrant Settlement Date, the Collateral Agent shall instruct the
Securities Intermediary to invest the Cash Proceeds of the maturing Pledged
Treasury Securities or Pledged Applicable Ownership Interests, as the case may
be, in Permitted Investments set forth in clause (6) of the definition of
Permitted Investments, unless prior to 10:30 a.m. (New York City time) on such
date, the Company shall otherwise instruct the Collateral Agent in writing as to
the type of Permitted Investments in which any such Cash Proceeds shall be
invested. In no event shall the Collateral Agent be liable for the selection of
Permitted Investments or for investment losses incurred thereon. The Collateral
Agent shall have no liability in respect of losses incurred as a result of the
failure of the Company to provide timely written investment direction. Without
receiving any instruction from any such Holder, the Collateral Agent shall
instruct the Securities Intermediary to remit the Proceeds of the related
Pledged Treasury Securities or Pledged Applicable Ownership Interests, as the
case may be, to the Company in settlement of such Warrants on the Warrant
Settlement Date. In the event the sum of the Proceeds from the related Pledged
Treasury Securities or Pledged Applicable Ownership Interests, as the case may
be, and the investment earnings from the investment in Permitted Investments
exceeds the aggregate Settlement Price of the Warrants being settled thereby,
the Collateral Agent shall instruct the Securities Intermediary to transfer such
excess, when received, to the Warrant Agent for distribution to such Holder.
(c) Prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the applicable Remarketing Date, but no earlier than the
Payment Date immediately preceding such date, Holders of Separate Senior Notes
may elect to have their Separate Senior Notes remarketed under the Remarketing
Agreement, by delivering their Separate Senior Notes along with a notice of such
election, substantially in the form of Exhibit F hereto, to the Custodial Agent.
After such time, such election shall become an irrevocable election to have such
Separate Senior Notes remarketed in such Remarketing and, if such Remarketing
fails, in any subsequent Remarketing. The Custodial Agent shall hold Separate
Senior Notes in an account separate from the Collateral Account in which the
Pledged Securities shall be held. Holders of Separate Senior Notes electing to
have their Separate Senior Notes remarketed will also have the right to withdraw
that election by written notice to the Custodial Agent, substantially in the
form of Exhibit G hereto, prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the applicable Remarketing Date, upon which
notice the Custodial Agent shall return such Separate Senior Notes to such
Holder.
By 11:00 a.m. (New York City time) on the Business Day immediately
preceding the applicable Remarketing Date, the Custodial Agent shall notify the
21
Remarketing Agent of the aggregate principal amount of the Separate Senior Notes
to be remarketed and deliver to the Remarketing Agent for remarketing all
Separate Senior Notes delivered to the Custodial Agent pursuant to this Section
5.07(c) and not validly withdrawn prior to such date. In the event of a
Successful Remarketing, after deducting the Remarketing Fee (to the extent
permitted under the terms of the Remarketing Agreement), the Remarketing Agent
will remit to the Custodial Agent the remaining portion of the proceeds of such
Remarketing for payment to the Holders of the remarketed Separate Senior Notes,
in accordance with their respective interests. In the event of a Failed
Remarketing, the Remarketing Agent will promptly return such Separate Senior
Notes to the Custodial Agent, and, in the event of a Failed Final Remarketing,
the Custodial Agent shall deliver such Separate Senior Notes to the appropriate
Holders.
SECTION 5.08. Special Event Redemption. If the Collateral Agent receives
written notice that a Special Event Redemption has occurred while Senior Notes
are still credited to the Collateral Account, the Collateral Agent shall cause
the Redemption Amount to be deposited in the Collateral Account and shall
instruct the Securities Intermediary to apply the Redemption Amount to purchase
the Treasury Portfolio, and to credit the Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) in the Treasury
Portfolio to the Collateral Account and transfer the Applicable Ownership
Interests (as specified in clause (ii)(y) of the definition of such term) in the
Treasury Portfolio to the Warrant Agent for distribution to the Holders of the
Corporate Units. Upon credit to the Collateral Account of the Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio having a Value equal to the aggregate principal amount
of the Pledged Senior Notes, the Collateral Agent shall cause the Securities
Intermediary to release the Pledged Senior Notes from the Collateral Account and
promptly transfer the Pledged Senior Notes to the Company.
ARTICLE 6
VOTING RIGHTS - PLEDGED SENIOR NOTES
SECTION 6.01. Voting Rights. Subject to the terms of Section 4.02 of the
Warrant Agreement, the Warrant Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the Pledged Senior
Notes or any part thereof for any purpose not inconsistent with the terms of
this Agreement and in accordance with the terms of the Warrant Agreement;
provided, that the Warrant Agent shall not exercise or shall not refrain from
exercising such right, as the case may be, if, in the judgment of the Warrant
Agent, such action
22
would impair or otherwise have a material adverse effect on the value of all or
any of the Pledged Senior Notes; and provided, further, that the Warrant Agent
shall give the Company and the Collateral Agent at least five Business Days'
prior written notice of the manner in which it intends to exercise, or its
reasons for refraining from exercising, any such right. Upon receipt of any
notices and other communications in respect of any Pledged Senior Notes,
including notice of any meeting at which holders of the Senior Notes are
entitled to vote or solicitation of consents, waivers or proxies of holders of
the Senior Notes, the Collateral Agent shall use reasonable efforts to send
promptly to the Warrant Agent such notice or communication, and as soon as
reasonably practicable after receipt of a written request therefor from the
Warrant Agent, execute and deliver to the Warrant Agent such proxies and other
instruments in respect of such Pledged Senior Notes (in form and substance
satisfactory to the Collateral Agent) as are prepared by the Company and
delivered to the Warrant Agent with respect to the Pledged Senior Notes.
ARTICLE 7
RIGHTS AND REMEDIES
SECTION 7.01. Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies specified in Section 5.07
hereof or otherwise available at law or in equity, after an event of default (as
specified in Section 7.01(b) below) hereunder, the Collateral Agent shall have
all of the rights and remedies with respect to the Collateral of a secured party
under the UCC (whether or not the UCC is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Without limiting the generality of the foregoing, such remedies may
include, to the extent permitted by applicable law, (1) retention of the Pledged
Senior Notes, Pledged Treasury Securities or the applicable Pledged Applicable
Ownership Interests in full satisfaction of the Holders' obligations under the
Warrants and the Warrant Agreement or (2) sale of the Pledged Senior Notes,
Pledged Treasury Securities or the applicable Pledged Applicable Ownership
Interests 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 applicable Pledged Applicable
23
Ownership Interests, or on account of principal payments of any Pledged Treasury
Securities as provided in Article 3 hereof, in satisfaction of the Obligations
of the Holder of the Units represented by such applicable Pledged Applicable
Ownership Interests or such Pledged Treasury Securities, as applicable, under
the related Warrants, 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 Pledged Applicable
Ownership Interests, as applicable, any and all of the rights and remedies
available to a secured party under the UCC and the TRADES Regulations after
default by a debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of
the Pledged Senior Notes, (ii) the principal amount of the Pledged Treasury
Securities and (iii) the principal amount of the Pledged Applicable Ownership
Interests, subject, in each case, to the provisions of Article 3 hereof, and as
otherwise granted herein.
(d) The Warrant Agent and each Holder of Units agrees that, from time to
time, upon the written request of the Collateral Agent or the Warrant Agent,
such Holder shall execute and deliver such further documents and do such other
acts and things as the Collateral Agent may reasonably request or as may be
necessary or advisable in order to maintain the Pledge, and the perfection and
priority thereof, and to confirm the rights of the Collateral Agent hereunder.
The Warrant 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 grossly negligent acts, its own grossly
negligent failure to act or its own willful misconduct.
SECTION 7.02. Special Event Redemption. Upon the occurrence of a Special
Event Redemption while Senior Notes are still credited to the Collateral
Account, the Collateral Agent is hereby authorized to present the Pledged Senior
Notes for payment as may be required by their respective terms and to direct the
Indenture Trustee to remit the Redemption Price to the Securities Intermediary
for credit to the Collateral Account on or prior to 12:30 p.m., New York City
time on such Special Event Redemption Date, by federal funds check or wire
transfer of immediately available funds. Upon receipt of such funds, the Pledged
Senior Notes shall be released from the Collateral Account. Upon the crediting
of such funds to the Collateral Account, the Collateral Agent, at the written
direction of the Company, shall instruct the Securities Intermediary to (a)
apply an amount equal to the Redemption Amount of such funds to purchase the
Treasury Portfolio from the Quotation Agent, (b) credit to the Collateral
Account the Applicable
24
Ownership Interests specified in clause (i) of the definition of such term and
(c) promptly remit the remaining portion of such funds, if any, to the Warrant
Agent for payment to the Holders of Corporate Units, in accordance with their
respective interests.
SECTION 7.03. Successful Remarketing. In the event of a Successful
Remarketing prior to the Final Remarketing Date, the Collateral Agent shall, at
the direction of the Company, instruct the Securities Intermediary to (i)
Transfer the Pledged Senior Notes to the Remarketing Agent upon confirmation of
deposit by the Remarketing Agent of the Proceeds of such Successful Remarketing
(after deducting any Remarketing Fee to the extent permitted under the terms of
the Remarketing Agreement) in the Collateral Account, (ii) apply an amount equal
to the Treasury Portfolio Purchase Price to purchase from the Quotation Agent
the Treasury Portfolio, (iii) credit the Applicable Ownership Interests
specified in clause (i) of the definition of such term to the Collateral
Account, and (iv) promptly remit the remaining portion of such Proceeds to the
Warrant Agent for payment to the Holders of Corporate Units, in accordance with
their respective interests. With respect to Separate Senior Notes, any Proceeds
of such Remarketing (after deducting any Remarketing Fee to the extent permitted
under the terms of the Remarketing Agreement) attributable to the Separate
Senior Notes will be remitted to the Custodial Agent for payment to the holders
of Separate Senior Notes. The Pledged Applicable Ownership Interests thus
credited to the Collateral Account will secure the obligation of all Holders of
Corporate Units to purchase Common Stock of the Company under the Warrants
represented by such Corporate Units, in substitution for the Pledged Senior
Notes, which shall be released from the Collateral Account. In the event of a
Failed Final Remarketing, the Pledged Senior Notes shall remain credited to the
Collateral Account.
SECTION 7.04. Substitutions. Whenever a Holder has the right to substitute
Treasury Securities, Senior Notes or security entitlements for any of them or
the appropriate Applicable Ownership Interests (as defined in clause (i) of the
definition of such term) in the Treasury Portfolio, as the case may be, for
financial assets held in the Collateral Account, such substitution shall not
constitute a novation of the security interest created hereby.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES; COVENANTS
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SECTION 8.01. Representations and Warranties. Each Holder from time to
time, acting through the Warrant Agent as attorney-in-fact (it being understood
that the Warrant Agent shall not be liable for any representation or warranty
made by or on behalf of a Holder), hereby represents and warrants to the
Collateral Agent (with respect to such Holder's interest in the Collateral),
which representations and warranties shall be deemed repeated on each day a
Holder Transfers Collateral, that:
(a) such Holder has the power to grant a security interest in and lien on
the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and, in the
case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent for credit to the Collateral
Account, free and clear of any security interest, lien, encumbrance, call,
liability to pay money or other restriction other than the security interest and
lien granted under Article 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral Agent for credit
to the Collateral Account, the Collateral Agent, for the benefit of the Company,
will have a valid and perfected first priority security interest therein
(assuming that any central clearing operation or any securities intermediary or
other entity not within the control of the Holder involved in the Transfer of
the Collateral, including the Collateral Agent and the Securities Intermediary,
gives the notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the establishment
and exercise of control pursuant to Article 4 hereof); and
(d) the execution and performance by the Holder of its obligations under
this Agreement will not result in the creation of any security interest, lien or
other encumbrance on the Collateral other than the security interest and lien
granted under Article 2 hereof or violate any provision of any existing law or
regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.
SECTION 8.2. Covenants. The Holders from time to time, acting through the
Warrant Agent as their attorney-in-fact (it being understood that the Warrant
Agent shall not be liable for any covenant made by or on behalf of a Holder),
hereby covenant to the Collateral Agent that for so long as the Collateral
remains subject to the Pledge:
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(a) neither the Warrant Agent nor such Holders will create or purport to
create or allow to subsist any mortgage, charge, lien, pledge or any other
security interest whatsoever over the Collateral or any part of it other than
pursuant to this Agreement; and
(b) neither the Warrant Agent nor such Holders will sell or otherwise
dispose (or attempt to dispose) of the Collateral or any part of it except for
the beneficial interest therein, subject to the Pledge hereunder, transferred in
connection with the Transfer of any Units.
ARTICLE 9
THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES
INTERMEDIARY
It is hereby agreed as follows:
SECTION 9.1. Appointment, Powers and Immunities. The Collateral Agent,
the Custodial Agent or Securities Intermediary shall act as agent for the
Company hereunder with such powers as are specifically vested in the Collateral
Agent, the Custodial Agent or Securities Intermediary, as the case may be, by
the terms of this Agreement. The Collateral Agent, the Custodial Agent and
Securities Intermediary shall:
(a) have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants or obligations shall be inferred from
this Agreement against the Collateral Agent, the Custodial Agent and Securities
Intermediary, nor shall the Collateral Agent, the Custodial Agent and Securities
Intermediary be bound by the provisions of any agreement by any party hereto
beyond the specific terms hereof;
(b) not be responsible for any recitals contained in this Agreement, or in
any certificate or other document referred to or provided for in, or received by
it under, this Agreement, the Certificates or the Warrant Agreement, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement (other than as against the Collateral Agent, the Custodial Agent
or Securities Intermediary, as the case may be), the Warrants, the Senior Notes,
any Collateral or the Warrant Agreement or any other document referred to or
provided for herein or therein or for any failure by the Company or any other
Person (except the Collateral Agent, the Custodial Agent or Securities
Intermediary, as the case may be) to perform any of its obligations hereunder or
27
thereunder or for the perfection, priority or, except as expressly required
hereby, maintenance of any security interest created hereunder;
(c) not be required to initiate or conduct any litigation or collection
proceedings hereunder (except pursuant to directions furnished under Section
9.02 hereof, subject to Section 9.08 hereof);
(d) not be responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to or provided for
herein or in connection herewith or therewith, except for its own gross
negligence or willful misconduct; and
(e) not be required to advise any party as to selling or retaining, or
taking or refraining from taking any action with respect to, any securities or
other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall take all
reasonable action in connection with the safekeeping and preservation of the
Collateral hereunder as determined by industry standards.
No provision of this Agreement shall require the Collateral Agent,
Custodial Agent or Securities Intermediary to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder. In no event shall the Collateral Agent, Custodial Agent or Securities
Intermediary be liable for any amount in excess of the Value of the Collateral.
None of the Collateral Agent, the Custodial Agent or the Securities
Intermediary has any obligation or responsibility to file UCC financing
statements.
SECTION 9.02. Instructions of the Company. The Company shall have the
right, by one or more written instruments executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral Agent,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement or involve the Collateral
Agent in personal liability and (ii) the Collateral Agent shall be indemnified
to its satisfaction as provided herein. Nothing contained in this Section 9.02
shall impair the right of the Collateral Agent in its discretion to take any
action or omit to take any action which it deems proper and which is not
inconsistent with such direction.
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SECTION 9.03. Reliance by Collateral Agent and Securities Intermediary.
Each of the Securities Intermediary, the Custodial Agent and the Collateral
Agent shall be entitled to rely conclusively upon any certification, order,
judgment, opinion, notice or other written communication (including, without
limitation, any thereof by e-mail or similar electronic means, telecopy, telex
or facsimile) believed by it to be genuine and correct and to have been signed
or sent by or on behalf of the proper Person or Persons (without being required
to determine the correctness of any fact stated therein) and consult with and
conclusively rely upon advice, opinions and statements of legal counsel and
other experts selected by the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be. As to any matters not expressly
provided for by this Agreement, the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall in all cases be fully protected in acting, or
in refraining from acting, hereunder in accordance with instructions given by
the Company in accordance with this Agreement.
SECTION 9.04. Certain Rights. (a) Whenever in the administration of the
provisions of this Agreement the Collateral Agent, the Custodial Agent or the
Securities Intermediary shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering any action to be taken
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of gross negligence or bad faith on
the part of the Collateral Agent, the Custodial Agent or the Securities
Intermediary, be deemed to be conclusively proved and established by a
certificate signed by one of the Company's officers, and delivered to the
Collateral Agent, the Custodial Agent or the Securities Intermediary and such
certificate, in the absence of gross negligence or bad faith on the part of the
Collateral Agent, the Custodial Agent or the Securities Intermediary, shall be
full warrant to the Collateral Agent, the Custodial Agent or the Securities
Intermediary for any action taken, suffered or omitted by it under the
provisions of this Agreement upon the faith thereof.
(b) The Collateral Agent, the Custodial Agent or the Securities
Intermediary shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, entitlement order, approval or other paper or
document.
SECTION 9.05. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Collateral Agent, the Custodial Agent or the
Securities Intermediary may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Collateral Agent, the Custodial Agent or the
Securities Intermediary shall be a party, or any corporation succeeding to the
business of the
29
Collateral Agent, the Custodial Agent or the Securities Intermediary shall be
the successor of the Collateral Agent, the Custodial Agent or the Securities
Intermediary hereunder without the execution or filing of any paper with any
party hereto or any further act on the part of any of the parties hereto except
where an instrument of transfer or assignment is required by law to effect such
succession, anything herein to the contrary notwithstanding.
SECTION 9.06. Rights in Other Capacities. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Warrant Agent, any other Person interested
herein and any Holder of Units (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, the Securities Intermediary and their affiliates may
accept fees and other consideration from the Warrant Agent and any Holder of
Units without having to account for the same to the Company; provided that each
of the Securities Intermediary, the Custodial Agent and the Collateral Agent
covenants and agrees with the Company that it shall not accept, receive or
permit there to be created in favor of itself and shall take no affirmative
action to permit there to be created in favor of any other Person, any security
interest, lien or other encumbrance of any kind in or upon the Collateral other
than the lien created by the Pledge.
SECTION 9.07. Non-Reliance on Collateral Agent, the Custodial Agent and
Securities Intermediary. None of the Securities Intermediary, the Custodial
Agent or the Collateral Agent shall be required to keep itself informed as to
the performance or observance by the Warrant Agent or any Holder of Units of
this Agreement, the Warrant Agreement, the Units or any other document referred
to or provided for herein or therein or to inspect the properties or books of
the Warrant Agent or any Holder of Units. None of the Collateral Agent, the
Custodial Agent or the Securities Intermediary shall have any duty or
responsibility to provide the Company with any credit or other information
concerning the affairs, financial condition or business of the Warrant Agent or
any Holder of Units (or any of their respective affiliates) that may come into
the possession of the Collateral Agent, the Custodial Agent or the Securities
Intermediary or any of their respective affiliates.
SECTION 9.08. Compensation and Indemnity. The Company agrees to:
(a) pay the Collateral Agent, the Custodial Agent and the Securities
Intermediary from time to time such compensation as shall be agreed in writing
between the Company and the Collateral Agent, the Custodial Agent or the
30
Securities Intermediary, as the case may be, for all services rendered by them
hereunder;
(b) indemnify and hold harmless the Collateral Agent, the Custodial Agent,
the Securities Intermediary and each of their respective directors, officers,
agents and employees (collectively, the "INDEMNITEES"), from and against any and
all claims, liabilities, losses, damages, fines, penalties and expenses
(including reasonable fees and expenses of counsel) (collectively, "Losses" and
individually, a "LOSS") that may be imposed on, incurred by, or asserted
against, the Indemnitees or any of them for following any instructions or other
directions upon which either the Collateral Agent, the Custodial Agent or the
Securities Intermediary is entitled to rely pursuant to the terms of this
Agreement, provided that the Collateral Agent, the Custodial Agent or the
Securities Intermediary has not acted with gross negligence or engaged in
willful misconduct or bad faith with respect to the specific Loss against which
indemnification is sought; and
(c) in addition to and not in limitation of paragraph (b) immediately
above, indemnify and hold the Indemnitees and each of them harmless from and
against any and all Losses that may be imposed on, incurred by or asserted
against, the Indemnitees or any of them in connection with or arising out of the
Collateral Agent's, the Custodial Agent's or the Securities Intermediary's
acceptance or performance of its powers and duties under this Agreement,
provided it has not been determined that the Collateral Agent, the Custodial
Agent or the Securities Intermediary acted with gross negligence or engaged in
willful misconduct or bad faith with respect to the specific Loss against which
indemnification is sought.
The provisions of this Section and Section 11.07 shall survive the
resignation or removal of the Collateral Agent, Custodial Agent or Securities
Intermediary and the termination of this Agreement.
SECTION 9.09. Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Securities Intermediary shall comply with all
instructions and entitlement orders of the Collateral Agent and shall not be or
become liable in any way to any of the parties hereto for such compliance. In
the event of any ambiguity in the provisions of this Agreement or any dispute
between or conflicting claims by or among the parties hereto or any other Person
with respect to any funds or property deposited hereunder, then at its sole
option, each of the Collateral Agent and the Custodial Agent shall be entitled,
after prompt notice to the Company and the Warrant Agent, to refuse to comply
with any and all claims, demands or instructions with respect to such property
or funds so long as such
31
dispute or conflict shall continue, and the Collateral Agent and the Custodial
Agent shall not be or become liable in any way to any of the parties hereto for
its failure or refusal to comply with such conflicting claims, demands or
instructions. The Collateral Agent and the Custodial Agent and shall be entitled
to refuse to act until either:
(a) such conflicting or adverse claims or demands shall have been finally
determined by a court of competent jurisdiction or settled by agreement between
the conflicting parties as evidenced in a writing satisfactory to the Collateral
Agent or the Custodial Agent; or
(b) the Collateral Agent or the Custodial Agent shall have received
security or an indemnity satisfactory to it sufficient to save it harmless from
and against any and all loss, liability or reasonable out-of-pocket expense
which it may incur by reason of its acting.
The Collateral Agent, the Custodial Agent and the Securities Intermediary may in
addition elect to commence an interpleader action or seek other judicial relief
or orders as the Collateral Agent, the Custodial Agent or the Securities
Intermediary may deem necessary. Notwithstanding anything contained herein to
the contrary, none of the Collateral Agent, the Custodial Agent or the
Securities Intermediary shall be required to take any action that is in its
opinion contrary to law or to the terms of this Agreement, or which would in its
opinion subject it or any of its officers, employees or directors to liability.
SECTION 9.10. Resignation of Collateral Agent, the Custodial Agent and
Securities Intermediary. Subject to the appointment and acceptance of a
successor Collateral Agent, Custodial Agent or Securities Intermediary as
provided below:
(i) the Collateral Agent, the Custodial Agent and the Securities
Intermediary may resign at any time by giving notice thereof to the
Company and the Warrant Agent as attorney-in-fact for the Holders of
Units;
(ii) the Collateral Agent, the Custodial Agent and the Securities
Intermediary may be removed at any time by the Company; and
(iii) 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 Warrant Agent and such failure shall
be continuing, the Collateral Agent, the Custodial Agent and the
Securities
32
Intermediary may be removed by the Warrant Agent, acting at the direction
of the Holders of Units.
The Warrant Agent shall promptly notify the Company of any removal of the
Collateral Agent, the Custodial Agent or the Securities Intermediary pursuant to
clause (iii) of this Section 9.10. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be, which shall not be an
Affiliate of the Warrant Agent. If no successor Collateral Agent, Custodial
Agent or Securities Intermediary shall have been so appointed and shall have
accepted such appointment within 30 days after the retiring Collateral Agent's,
Custodial Agent's or Securities Intermediary's giving of notice of resignation
or the Company's or the Warrant Agent's giving notice of such removal, then the
retiring or removed Collateral Agent, Custodial Agent or Securities Intermediary
may petition any court of competent jurisdiction, at the expense of the Company,
for the appointment of a successor Collateral Agent, Custodial Agent or
Securities Intermediary. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall each be a bank or a national banking association
which has an office (or an agency office) in New York City with a combined
capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as Collateral Agent, Custodial Agent or Securities Intermediary
hereunder by a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, such successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be, shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, and the retiring Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, shall take all appropriate action, subject to
payment of any amounts then due and payable to it hereunder, to transfer any
money and property held by it hereunder (including the Collateral) to such
successor. The retiring Collateral Agent, Custodial Agent or Securities
Intermediary shall, upon such succession, be discharged from its duties and
obligations as Collateral Agent, Custodial Agent or Securities Intermediary
hereunder. After any retiring Collateral Agent's, Custodial Agent's or
Securities Intermediary's resignation hereunder as Collateral Agent, Custodial
Agent or Securities Intermediary, the provisions of this Article 9 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Collateral Agent, Custodial Agent or
Securities Intermediary. Any resignation or removal of the Collateral Agent,
Custodial Agent or Securities Intermediary hereunder, at a time when such Person
is acting as the Collateral Agent, Custodial Agent or Securities Intermediary,
shall be deemed for all purposes of this Agreement as the simultaneous
resignation or removal of the Collateral Agent, Securities Intermediary or
Custodial Agent, as the case may be.
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SECTION 9.11. Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 9.11
shall be subject to prior written consent of the Company, which consent shall
not be unreasonably withheld.
SECTION 9.12. Survival. The provisions of this Article 9 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.
SECTION 9.13. Exculpation. Anything contained in this Agreement to the
contrary notwithstanding, in no event shall the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, directors, employees or
agents be liable under this Agreement to any third party for indirect, special,
punitive, or consequential loss or damage of any kind whatsoever, including, but
not limited to, lost profits, whether or not the likelihood of such loss or
damage was known to the Collateral Agent, the Custodial Agent or the Securities
Intermediary, or any of them and regardless of the form of action.
ARTICLE 10
AMENDMENT
SECTION 10.01. Amendment Without Consent of Holders. Without the consent
of any Holders, the Company, when authorized by a Board Resolution, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Warrant 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 Warrant Agent, to:
(a) evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company;
(b) evidence and provide for the acceptance of appointment hereunder by a
successor Collateral Agent, Custodial Agent, Securities Intermediary or Warrant
Agent;
(c) add to the covenants of the Company for the benefit of the Holders, or
surrender any right or power herein conferred upon the Company, provided that
34
such covenants or such surrender do not adversely affect the validity,
perfection or priority of the Pledge created hereunder; or
(d) cure any ambiguity (or formal defect), correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, or make any other provisions with respect to such matters or questions
arising under this Agreement, provided that such action shall not adversely
affect the interests of the Holders in any material respect.
SECTION 10.02. Amendment with Consent of Holders. With the consent of the
Holders of not less than a majority of the Warrants at the time outstanding,
including without limitation the consent of the Holders obtained in connection
with a tender or an exchange offer, by Act of such Holders delivered to the
Company, the Warrant Agent, the Custodial Agent, the Securities Intermediary and
the Collateral Agent, as the case may be, the Company, when duly authorized by a
Board Resolution, the Warrant Agent, the Collateral Agent, the Securities
Intermediary and the Collateral Agent may amend this Agreement for the purpose
of modifying in any manner the provisions of this Agreement or the rights of the
Holders in respect of the Units; provided, however, that no such supplemental
agreement shall, without the unanimous consent of the Holders of each
Outstanding Unit adversely affected thereby in any material respect:
(a) change the amount or type of Collateral represented by a Unit (except
for the rights of holders of Corporate Units to substitute the Treasury
Securities for the Pledged Senior Notes or the Pledged Applicable Ownership
Interests, as the case may be, or the rights of Holders of Treasury Units to
substitute Senior Notes or the Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury Portfolio, as
applicable, for the Pledged Treasury Securities), impair the right of the Holder
of any Unit to receive distributions on the Collateral represented thereby or
otherwise adversely affect the Holder's rights in or to such Collateral; or
(b) otherwise effect any action that would require the consent of the
Holder of each Outstanding Unit affected thereby pursuant to the Warrant
Agreement if such action were effected by a modification or amendment of the
provisions of the Warrant Agreement; or
(c) reduce the percentage of Warrants the consent of whose Holders is
required for the modification or amendment of the provisions of this Agreement;
provided that if any amendment or proposal referred to above would adversely
affect only the Corporate Units or only the Treasury Units, then only the
affected class of Holders as of the record date for the Holders entitled to
35
vote thereon will be entitled to vote on such amendment or proposal, and such
amendment or proposal shall not be effective except with the consent of Holders
of not less than a majority of such class; provided, further, that the unanimous
consent of the Holders of each outstanding Warrant of such class affected
thereby shall be required to approve any amendment or proposal specified in
clauses (a) through (c) above.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
SECTION 10.03. Execution of Amendments. In executing any amendment
permitted by this Article, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Warrant Agent shall be entitled to receive and
(subject to Section 7.01 of the Warrant Agreement with respect to the Warrant
Agent) shall be fully authorized and protected in relying upon, an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and that all conditions precedent, if any, to the execution
and delivery of such amendment have been satisfied. The Collateral Agent,
Custodial Agent, Securities Intermediary and Warrant Agent may, but shall not be
obligated to, enter into any such amendment which affects their own respective
rights, duties or immunities under this Agreement or otherwise.
SECTION 10.04. Effect of Amendments. Upon the execution of any amendment
under this Article, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Warrant Agreement shall be
bound thereby.
SECTION 10.05. Reference of Amendments. Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Section may, and shall if required by the Collateral
Agent or the Warrant Agent, bear a notation in form approved by the Warrant
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 Warrant Agent and the Company, to
any such amendment may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Warrant
Agent in accordance with the Warrant Agreement in exchange for Certificates
representing Outstanding Units.
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ARTICLE 11
MISCELLANEOUS
SECTION 11.01. No Waiver. No failure on the part of the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary or any of
their respective agents to exercise, and no course of dealing with respect to,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise by the Company,
the Collateral Agent, the Custodial Agent, the Securities Intermediary or any of
their respective agents of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
SECTION 11.02. Governing Law; Submission to Jurisdiction. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK. The Company, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Holders from time to time of the Units, acting through the
Warrant Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. The Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Holders from time to time
of the Units, acting through the Warrant Agent as their attorney-in-fact,
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
SECTION 11.03. Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "ADDRESS FOR NOTICES" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
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SECTION 11.04. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Warrant Agent, and the Holders from time to time of the Units, by their
acceptance of the same, shall be deemed to have agreed to be bound by the
provisions hereof and to have ratified the agreements of, and the grant of the
Pledge hereunder by, the Warrant Agent.
SECTION 11.05. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
SECTION 11.06. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
SECTION 11.07. Expenses, Etc.. The Company agrees to reimburse the
Collateral Agent, the Custodial Agent and the Securities Intermediary for:
(a) all reasonable costs and expenses of the Collateral Agent, the
Custodial Agent and the Securities Intermediary (including, without limitation,
the reasonable fees and expenses of counsel to the Collateral Agent, the
Custodial Agent and the Securities Intermediary), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent, the
Custodial Agent and the Securities Intermediary (including, without limitation,
reasonable fees and expenses of counsel) in connection with (i) any enforcement
or proceedings resulting or incurred in connection with causing any Holder of
Units to satisfy its obligations under the Warrants represented by the Units and
(ii) the enforcement of this Section 11.07;
(c) all transfer, stamp, documentary or other similar taxes, assessments
or charges levied by any governmental or revenue authority in respect of this
Agreement or any other document referred to herein and all costs, expenses,
taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated
hereby;
38
(d) all reasonable fees and expenses of any agent or advisor appointed by
the Collateral Agent and consented to by the Company under Section 9.11 of this
Agreement; and
(e) any other out-of-pocket costs and expenses reasonably incurred by the
Collateral Agent, the Custodial Agent and the Securities Intermediary in
connection with the performance of their duties hereunder.
SECTION 11.08. Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
Warrants or the Units or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of the Units under the related Warrants, or any other amendment or
waiver of any term of, or any consent to any departure from any requirement of,
the Warrant Agreement or any Warrant 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 11.09. Notice of Special Event, Special Event Redemption and
Termination Event. Upon the occurrence of a Special Event, a Special Event
Redemption or a Termination Event, the Company shall deliver written notice to
the Warrant Agent, the Collateral Agent and the Securities Intermediary. Upon
the written request of the Collateral Agent or the Securities Intermediary, the
Company shall inform such party whether or not a Special Event, a Special Event
Redemption or a Termination Event has occurred.
[SIGNATURES ON THE FOLLOWING PAGE]
39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
THE CHUBB CORPORATION BANK ONE TRUST COMPANY,
N.A., as Warrant Agent
and as attorney-in-fact of the Holders
from time to time of the Units
By: /s/ Michael O'Reilly By: /s/ Sandra Whalen
------------------------------------- ------------------------------------------
Name: Michael O'Reilly Name: Sandra Whalen
Title: Vice Chairman Title: Vice President
Address for Notices: Address for Notices:
The Chubb Corporation Bank One Trust Company, N.A.
15 Mountain View Road 153 West 51st Street
Warren, New Jersey 07061-1615 New York, New York 10019
Attention: General Counsel Attn: Sandra Becker-Whalen
Fax: 908-903-3607 Fax: 212-373-1383
BNY MIDWEST TRUST COMPANY,
as Collateral Agent, Custodial Agent and
Securities Intermediary
By: /s/ Linda Garcia
-------------------------------------
Name: Linda Garcia
Title: Assistant Treasurer
Address for Notices:
BNY Midwest Trust Company
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Finance
Fax: (312) 827-8542
EXHIBIT A
INSTRUCTION
FROM WARRANT AGENT
TO COLLATERAL AGENT
(Creation of Treasury Units)
BNY Midwest Trust Company
The Collateral Agent
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Finance
Fax: (312) 827-8542
Re: _________ Corporate Units of The Chubb Corporation (the
"COMPANY")
The securities account of BNY Midwest Trust Company, as
Collateral Agent, maintained by the Securities Intermediary
and designated "Bank One Trust Company, N.A., as Collateral
Agent of The Chubb Corporation, as pledgee of BNY Midwest
Trust Company, as the Warrant Agent on behalf of and as
attorney-in-fact for the Holders" (the "COLLATERAL ACCOUNT")
Please refer to the Pledge Agreement, dated as of December 2, 2002 (the
"PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, as Securities
Intermediary and as Custodial Agent and the undersigned, as Warrant Agent and as
attorney-in-fact for the holders of Corporate Units from time to time.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
We hereby notify you in accordance with Section 5.02 of the Pledge
Agreement that the holder of securities named below (the "HOLDER") has elected
to substitute $__________ Value of Treasury Securities or security entitlements
with respect thereto in exchange for an equal Value of Pledged Senior Notes
relating to _________ Corporate Units and has delivered to the undersigned a
notice stating that the Holder has Transferred such Treasury Securities or
security entitlements with respect thereto to the Securities Intermediary, for
credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or security entitlements thereto have
been credited to the Collateral Account, to release to the undersigned an equal
Value of Pledged Senior Notes in accordance with Section 5.02 of the Pledge
Agreement.
BANK ONE TRUST COMPANY,
N.A.,
Date: as Warrant Agent and as attorney-in-
fact of the Holders from time to time
of the Units
By:__________________________
Name:
Title:
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements with respect thereto for the Pledged Senior
Notes:
- ----------------------------- -----------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
- ------------------------------
Address
- ------------------------------
- ------------------------------
EXHIBIT B
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Creation of Treasury Units)
BNY Midwest Trust Company
Securities Intermediary
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Finance
Fax: (312) 827-8542
Re: __________ Corporate Units of The Chubb Corporation (the "COMPANY")
The securities account of BNY Midwest Trust Company, as Collateral
Agent, maintained by the Securities Intermediary and designated BNY
Midwest Trust Company, as Collateral Agent of The Chubb Corporation, as
pledgee of Bank One Trust Company, N.A., as the Warrant Agent on behalf
of and as attorney-in-fact for the Holders" (the "COLLATERAL ACCOUNT")
Please refer to the Pledge Agreement, dated as of December 2, 2002 (the
"PLEDGE AGREEMENT"), among the Company, you, as Securities Intermediary, Bank
One Trust Company, N.A., as Warrant Agent and as attorney-in-fact for the
holders of Corporate Units from time to time, and the undersigned, as Collateral
Agent. Capitalized terms used herein but not defined shall have the meanings set
forth in the Pledge Agreement.
When you have confirmed that $__________ Value of Treasury Securities
or security entitlements thereto has been credited to the Collateral Account by
or for the benefit of _________, as Holder of Corporate Units (the "HOLDER"),
you are hereby instructed to release from the Collateral Account an equal Value
of Pledged Senior Notes or security entitlements with respect thereto relating
to _____ Corporate Units of the Holder by Transfer to the Warrant Agent.
BNY MIDWEST TRUST
COMPANY,
as Collateral Agent
Dated:_______________
By:_______________________
Name:
Title:
Please print name and address of Holder:
- -------------------------------- --------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
- ---------------------------------
Address
- ---------------------------------
- ---------------------------------
EXHIBIT C
INSTRUCTION
FROM WARRANT AGENT
TO COLLATERAL AGENT
(Recreation of Corporate Units )
BNY Midwest Trust Company
The Collateral Agent
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Finance
Fax: (312) 827-8542
Re: ____________ Treasury Units of The Chubb Corporation (the
"COMPANY")
Please refer to the Pledge Agreement dated as of December 2, 2002 (the
"PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, as Securities
Intermediary, as Custodial Agent and the undersigned, as Warrant Agent and as
attorney-in-fact for the holders of Treasury Units from time to time.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
We hereby notify you in accordance with Section 5.03(a) of the Pledge
Agreement that the holder of securities named below (the "HOLDER") has elected
to substitute $__________ Value of Senior Notes or security entitlements with
respect thereto in exchange for $__________ Value of Pledged Treasury Securities
and has delivered to the undersigned a notice stating that the holder has
Transferred such Senior Notes or security entitlements with respect thereto to
the Securities Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Senior Notes or security entitlements with respect
thereto have been credited to the Collateral Account, to release to the
undersigned $__________ Value of Treasury Securities or security entitlements
with respect thereto related to _____ Treasury Units of such Holder in
accordance with Section 5.03(a) of the Pledge Agreement.
BANK ONE TRUST COMPANY,
N.A.
as Warrant Agent
Dated:_______________ By:_______________________
Name:
Title:
Please print name and address of Holder electing to substitute Senior Notes or
security entitlements with respect thereto for Pledged Treasury Securities:
- ---------------------------- -------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
- ---------------------------------
Address
- ---------------------------------
- ---------------------------------
EXHIBIT D
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Recreation of Corporate Units)
BNY Midwest Trust Company
The Securities Intermediary
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Finance
Fax: (312) 827-8542
Re: ___________ Treasury Units of The Chubb Corporation (the "COMPANY")
The securities account of BNY Midwest Trust Company, as Collateral
Agent, maintained by the Securities Intermediary and designated BNY
Midwest Trust Company, as Collateral Agent of The Chubb Corporation, as
pledgee of Bank One Trust Company, N.A., as the Warrant Agent on behalf
of and as attorney-in-fact for the Holders" (the "COLLATERAL ACCOUNT")
Please refer to the Pledge Agreement dated as of December 2, 2002 (the
"PLEDGE AGREEMENT"), among the Company, you, as Securities Intermediary,
Custodial Agent and Collateral Agent and Bank One Trust Company, N.A., as
Warrant Agent and as attorney-in-fact for the holders of Corporate Units from
time to time, and the undersigned, as Collateral Agent. Capitalized terms used
herein but no defined shall have the meaning set forth in the Pledge Agreement.
When you have confirmed that $ __________ Value of Senior Notes or
security entitlements with respect thereto has been credited to the Collateral
Account by or for the benefit of ________________, as Holder of Treasury Units
(the "HOLDER"), you are hereby instructed to release from the Collateral Account
$ __________ Value of Treasury Securities or security entitlements thereto by
Transfer to the Warrant Agent.
BNY MIDWEST TRUST
COMPANY,
as Collateral Agent
Dated:_______________ By:_______________________
Name:
Title:
- --------------------------------- --------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
- ---------------------------------
Address
- ---------------------------------
- ---------------------------------
EXHIBIT E
NOTICE OF CASH SETTLEMENT FROM COLLATERAL
AGENT TO WARRANT AGENT
(Cash Settlement Amounts)
Bank One Trust Company, N.A.
The Warrant Agent
153 West 51st Street
New York, New York 10019
Fax: (212) 373-1383
Attention: Corporate Trust Administration
Re: __________ Corporate Units of The Chubb Corporation (the "COMPANY")
__________ Treasury Units of the Company
Please refer to the Pledge Agreement dated as of December 2, 2002 (the
"PLEDGE AGREEMENT"), by and among you, the Company, and BNY Midwest Trust
Company, as Collateral Agent, Custodial Agent and Securities Intermediary.
Unless otherwise defined herein, terms defined in the Pledge Agreement are used
herein as defined therein.
In accordance with Section 5.05(d) of the Pledge Agreement, we hereby
notify you that as of 11:00 a.m. (New York City time) on the fourth Business Day
immediately preceding November 16, 2005 (the "WARRANT SETTLEMENT DATE"), we have
received (i) $ _______________ in immediately available funds paid in an
aggregate amount equal to the Settlement Price due to the Company on the Warrant
Settlement Date with respect to ________________ Corporate Units, (ii) $
___________ in immediately available funds paid in an aggregate amount equal to
the Settlement Price due to the Company on the Warrant Settlement Date with
respect to ______ Treasury Units and (iii) based on the funds received set forth
in clause (i) above, an aggregate principal amount of $_________ of Pledged
Senior Notes are to be tendered for purchase in the Final Remarketing.
BNY MIDWEST TRUST
COMPANY,
as Collateral Agent,
Dated:_______________ By:_______________________
Name:
Title:
EXHIBIT F
INSTRUCTION TO CUSTODIAL AGENT REGARDING
REMARKETING
BNY Midwest Trust Company
The Custodial Agent
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Finance
Fax: (312) 827-8542
Re: Senior Notes Due November 16, 2007 of The Chubb Corporation (the
"COMPANY")
The undersigned hereby notifies you in accordance with Section 5.07(c) of
the Pledge Agreement, dated as of December 2, 2002 (the "PLEDGE AGREEMENT"),
among the Company, you, as Collateral Agent, Custodial Agent and Securities
Intermediary and Bank One Trust Company, N.A., as the Warrant Agent and as
attorney-in-fact for the holders of Corporate Units from time to time, that the
undersigned elects to deliver $______________ aggregate principal amount of
Separate Senior Notes for delivery to the Remarketing Agent prior to 5:00 p.m.
(New York City time) on the fifth Business Day immediately preceding the _______
Remarketing Date for remarketing pursuant to Section 5.07(c) of the Pledge
Agreement. The undersigned will, upon request of the Remarketing Agent, execute
and deliver any additional documents deemed by the Remarketing Agent or by the
Company to be necessary or desirable to complete the sale, assignment and
transfer of the Separate Senior Notes tendered hereby. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.
The undersigned hereby instructs you, upon receipt of the Proceeds of such
remarketing from the Remarketing Agent, to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions." The undersigned hereby instructs you, in the event of a
Failed Final Remarketing, upon receipt of the Separate Senior Notes tendered
herewith from the Remarketing Agent, to deliver such Separate Senior Notes to
the person(s) and the address(es) indicated herein under "B. Delivery
Instructions."
With this notice, the undersigned hereby (i) represents and warrants that
the undersigned has full power and authority to tender, sell, assign and
transfer the
Separate Senior Notes tendered hereby and that the undersigned is the record
owner of any Senior Notes tendered herewith in physical form or a participant in
The Depositary Trust Company ("DTC") and the beneficial owner of any Senior
Notes tendered herewith by book-entry transfer to your account at DTC, (ii)
agrees to be bound by the terms and conditions of Section 5.07(c) of the Pledge
Agreement and (iii) acknowledges and agrees that after 5:00 p.m. (New York City
time) on the fifth Business Day immediately preceding the ________ Remarketing
Date, such election shall become an irrevocable election to have such Separate
Senior Notes remarketed in the Remarketing and, in the case of a Failed
Remarketing, in any subsequent Remarketing, and that the Separate Senior Notes
tendered herewith will only be returned in the event of a Failed Final
Remarketing.
Date:_____________
____________________________________________
By:_________________________________________
Name:
Title:
Signature Guarantee:________________________
_____________________________
Name Social Security or other Taxpayer
Identification Number, if any
_____________________________
Address
_____________________________
_____________________________
A. PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
Name(s)
(Please Print)
Address
(Please Print)
(Zip Code)
(Tax Identification or Social Security Number)
B. DELIVERY INSTRUCTIONS
In the event of a failed final remarketing, Senior 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 final remarketing, Senior 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:_________________________________
EXHIBIT G
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
BNY Midwest Trust Company
The Custodial Agent
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Finance
Fax: (312) 827-8542
Re: Senior Notes due November 16, 2007 of The Chubb
Corporation (the "COMPANY")
The undersigned hereby notifies you in accordance with Section 5.07(c) of
the Pledge Agreement, dated as of December 2, 2002 (the "PLEDGE AGREEMENT"),
among the Company and you, as Collateral Agent, Custodial Agent and Securities
Intermediary, and Bank One Trust Company, N.A., as Warrant Agent and as
attorney-in-fact for the holders of Corporate Units from time to time, that the
undersigned elects to withdraw the $_________ aggregate principal amount of
Separate Senior Notes delivered to the Collateral Agent on _________, 200_ for
remarketing pursuant to Section 5.07(c) of the Pledge Agreement. The undersigned
hereby instructs you to return such Senior Notes to the undersigned in
accordance with the undersigned's instructions. With this notice, the
Undersigned hereby agrees to be bound by the terms and conditions of Section
5.07(c) of the Pledge Agreement. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date:_____________
____________________________________
By:_________________________________
Name:
Title:
Signature Guarantee:________________
______________________________ ____________________________________
Name Social Security or other Taxpayer
Identification Number, if any
______________________________
Address
______________________________
______________________________
CROSS-REFERENCE TARGET LIST
NOTE: DUE TO THE NUMBER OF TARGETS SOME TARGET NAMES MAY NOT APPEAR IN THE
TARGET PULL-DOWN LIST.
(This list is for the use of the wordprocessor only, is not a part of this
document and may be discarded.)
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME
=============== =========== =============== =========== =============== =========== =============== ===========
1.01(d).............terms.meanings
2...........................pledge
3..........dist.pledged.collateral
3.03(b)...............all.payments
4..........................control
4.10, 4.11.........powers.interest
5.02..........estab.treasury.stock
5.02(a)(i).transferring.for.credit
5.04.............termination.event
5.04(b)(i)............best.efforts
5.05...............cash.settlement
5.05(a)...............upon.receipt
5.07..........application.proceeds
5.08..........tax.event.redemption
6.01.................voting.rights
7.01(b)...........without.limiting
?..............substitution.Senior
Notes
9.02..........instructions.company
9.03...........reliance.coll.agent
9.08................comp.indemnity
9.10........resignation.coll.agent
9.11...........right.appoint.agent
9.12......................survival
11.07.................expenses.etc
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME
=============== =========== =============== =========== =============== =========== =============== ===========
E-2