EXECUTION COPY
PLEDGE AGREEMENT
DATED AS OF JULY 27, 2001
AMONG
CENDANT CORPORATION
AND
THE CHASE MANHATTAN BANK
AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
AS FORWARD PURCHASE CONTRACT AGENT
PLEDGE AGREEMENT, dated as of July 27, 2001 (this
"Agreement"), among Cendant Corporation, a Delaware corporation (the "Company"),
The Chase Manhattan Bank, a New York banking corporation ("Chase"), not
individually but solely as collateral agent (in such capacity, together with its
successors in such capacity, the "Collateral Agent"), as custodial agent (in
such capacity, together with its successors in such capacity, the "Custodial
Agent") and as "securities intermediary" as defined in Section 8-102(a)(14) of
the Code (as defined herein) (in such capacity, together with its successors in
such capacity, the "Securities Intermediary"), and Bank One Trust Company,
National Association, not individually but solely as forward purchase contract
agent and as attorney-in-fact of the Holders (as defined in the Forward Purchase
Contract Agreement) from time to time of the Securities (as hereinafter defined)
(in such capacity, together with its successors in such capacity, the "Forward
Purchase Contract Agent") under the Forward Purchase Contract Agreement (as
hereinafter defined).
RECITALS
WHEREAS, the Company and the Forward Purchase Contract Agent
are parties to the Forward Purchase Contract Agreement, dated as of the date
hereof (as modified and supplemented and in effect from time to time, the
"Forward Purchase Contract Agreement"), pursuant to which there may be issued
15,000,000 UPPER DECS of the Company (or 17,250,000 UPPER DECS if the
Underwriters' overallotment option is exercised in full), having a stated amount
of $50 (the "Stated Amount") per UPPER DECS; and
WHEREAS, each Upper DECS will initially consist of (a) a
forward purchase contract (the "Forward Purchase Contract") pursuant to which
the Holder will purchase from the Company not later than August 17, 2004 (the
"Forward Purchase Contract Settlement Date"), for an amount of cash equal to the
Stated Amount, a fraction of a newly issued share of common stock, $0.01 par
value per share (the "Common Stock"), of the Company equal to the Settlement
Rate (as defined below) and (b) either beneficial ownership of a Note (as
defined below) or, following a Successful Initial Remarketing or a Tax Event
Redemption, the Applicable Ownership Interest of the Treasury Portfolio; and
WHEREAS, if Holders of Upper DECS substitute collateral as
contemplated by Section 4.1, each unit created thereby (referred to as "Stripped
DECS" and, together with the Upper DECS, the "Securities") will initially
consist of (a) a Forward Purchase Contract pursuant to which the Holder will
purchase from the Company on the Forward Purchase Contract Settlement Date, for
an amount in cash equal to the Stated Amount, a fraction of a newly issued share
of Common Stock of the Company, equal to the Settlement Rate, and (b) a 1/20, or
5.0%, undivided beneficial ownership interest in a zero-coupon U.S. Treasury
Security (CUSIP No. 912820BK2) having a principal amount at maturity equal to
$1,000 and maturing on August 15 2004 (the "Treasury Securities"); and
WHEREAS, pursuant to the terms of the Indenture (as defined
below), the Company will issue $750,000,000 aggregate principal amount of Senior
Notes due August 17, 2006 (or $862,500,000 if the Underwriters' overallotment
option is exercised in full) (the "Notes"), each having a principal amount equal
to $50; and
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WHEREAS, pursuant to the terms of the Forward Purchase
Contract Agreement and the Forward Purchase Contracts, the Holders, from time to
time, of the Securities have irrevocably authorized the Forward Purchase
Contract Agent, as attorney-in-fact of such Holders, among other things, to
execute and deliver this Agreement on behalf of such Holders and to grant the
pledge provided hereby of the Notes, any Applicable Ownership Interest in the
Treasury Portfolio and the Treasury Securities to secure each Holder's
obligations under the related Forward Purchase Contract, as provided herein and
subject to the terms hereof; and
WHEREAS, upon such pledge, the Pledged Notes or the Applicable
Ownership Interests in the Treasury Portfolio, as the case may be, and the
Pledged Treasury Securities will be beneficially owned by the Holders but will
be owned of record by the Forward Purchase Contract Agent subject to the Pledge
hereunder.
NOW THEREFORE, in consideration of the foregoing premises, the
Company, the Collateral Agent, the Securities Intermediary, the Custodial Agent
and the Forward Purchase Contract Agent, on its own behalf and as
attorney-in-fact of the Holders from time to time of the Securities, agree as
follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(c) initially capitalized terms used but not otherwise defined
herein have the meanings assigned to such terms in the Forward Purchase Contract
Agreement; and
(d) the following terms have the meanings assigned to them in
this subsection (d):
"Agreement" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States Code, or
any other law of the United States that from time to time provides a uniform
system of bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday
or any other day on which banking institutions in The City of New York (in the
State of New York) are permitted or required by any applicable law to close.
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"Cash" means any coin or currency of the United States as at
the time shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the securities account (number
________) maintained at The Chase Manhattan Bank in the name "Bank One Trust
Company, National Association, as Forward Purchase Contract Agent on behalf of
the holders of certain securities of Cendant Corporation, Collateral Account
subject to the security interest of The Chase Manhattan Bank, as Collateral
Agent, for the benefit of Cendant Corporation, as pledgee" and any successor
account.
"Collateral Agent" has the meaning specified in the first
paragraph of this instrument.
"Common Stock" has the meaning specified in the Recitals.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Custodial Agent" has the meaning specified in the first
paragraph of this instrument.
"Forward Purchase Contract" has the meaning specified in the
Recitals.
"Forward Purchase Contract Agent" has the meaning specified in
the first paragraph of this Agreement.
"Forward Purchase Contract Agreement" has the meaning
specified in the Recitals.
"Forward Purchase Contract Settlement Date" has the meaning
specified in the Recitals.
"Indenture" means the Indenture dated as of February 24, 1998
between the Company and the Note Trustee, as amended and supplemented by the
Fourth Supplemental Indenture dated as of July 27, 2001 between the Company and
the Note Trustee.
"Intermediary" means any entity that in the ordinary course of
its business maintains securities accounts for others and is acting in that
capacity.
"Notes" has the meaning specified in the Recitals.
"Note Trustee" means The Bank of Nova Scotia Trust Company of
New York, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
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"Permitted Investments" means any one of the following which
shall mature not later than the next succeeding Business Day (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US $200.0 million at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which commercial paper has a
rating at the time of purchase at least equal to "A-1" by Standard & Poor's
Ratings Services ("S&P") or at least equal to "P-1" by Moody's Investors
Service, Inc. ("Moody's"); and (v) investments in money market funds registered
under the Investment Company Act of 1940, as amended, rated in the highest
applicable rating category by S&P or Moody's.
"Person" and "person" means any individual, corporation,
limited liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Notes" has the meaning specified in Section 2.1
hereof.
"Pledged Treasury Securities" has the meaning specified in
Section 2.1 hereof.
"Primary Treasury Dealer" means a primary U.S. government
securities dealer in The City of New York.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, maturity, collection or disposition of the Collateral
or any proceeds thereof.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the
first paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section
8-102(a)(17) of the Code.
"Separate Notes" means any Notes that are not Pledged Notes.
"Settlement Rate" is equal to (a) if the Applicable Market
Value is equal to or greater than $28.42 (the "Threshold Appreciation Price"),
1.7593 shares of Common Stock per
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Forward Purchase Contract, (b) if the Applicable Market Value is less than the
Threshold Appreciation Price but is greater than $21.53, the number of shares of
Common Stock per Forward Purchase Contract equal to the Stated Amount divided by
the Applicable Market Value and (c) if the Applicable Market Value is less than
or equal to $21.53, 2.3223 shares of Common Stock per Forward Purchase Contract,
in each case subject to adjustment as provided in Section 5.7 of the Forward
Purchase Contract Agreement (and in each case rounded upward or downward to the
nearest 1/10,000th of a share). No fractional shares of Common Stock will be
issued upon settlement of Forward Purchase Contracts.
"Stated Amount" has the meaning specified in the Recitals.
"Stripped DECS" has the meaning specified in the Recitals.
"Supplemental Remarketing Agreement" means the Supplemental
Remarketing Agreement, as defined in the Remarketing Agreement.
"Tax Event Redemption Date" means the date upon which a Tax
Event Redemption is to occur.
"TRADES" means the Treasury/Reserve Automated Debt Entry
System maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United
States Department of the Treasury, published at 31 C.F.R. Part 357, as amended
from time to time. Unless otherwise defined herein, all terms defined in the
TRADES Regulations are used herein as therein defined.
"Transfer" means, except as otherwise expressly provided
herein, with respect to the Collateral and in accordance with the instructions
of the Collateral Agent, the Forward Purchase Contract Agent or the Holder, as
applicable:
(i) in the case of Collateral consisting of securities which
cannot be delivered by book-entry or which the parties agree are
to be delivered in physical form, delivery in appropriate
physical form to the recipient accompanied by any duly executed
instruments of transfer, assignments in blank, transfer tax
stamps and any other documents necessary to constitute a legally
valid transfer to the recipient;
(ii) in the case of Collateral consisting of securities
maintained in book-entry form by causing a "securities
intermediary" (as defined in Section 8-102(a)(14) of the Code) to
(i) credit a "security entitlement" (as defined in Section
8-102(a)(17) of the Code) with respect to such securities to a
"securities account" (as defined in Section 8-501(a) of the Code)
maintained by or on behalf of the recipient and (ii) to issue a
confirmation to the recipient with respect to such credit. In the
case of Collateral to be delivered to the Collateral Agent, the
Securities Intermediary shall be the securities intermediary and
the securities account shall be the Collateral Account.
"Treasury Securities" has the meaning specified in the
Recitals.
"Upper DECS" has the meaning specified in the Recitals.
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"Value" with respect to any item of Collateral on any date
means, as to (i) a Note, the principal amount thereof, (ii) Cash, the face
amount thereof and (iii) Treasury Securities, the aggregate principal amount
thereof at maturity.
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
Section 2.1 The Pledge. (a) The Holders from time to time as
beneficial owners of the Collateral (as defined below) acting through the
Forward Purchase Contract Agent, as their attorney-in-fact, and the Forward
Purchase Contract Agent, as nominal owner of the Collateral, each hereby pledge
and grant to the Collateral Agent, for the benefit of the Company, as collateral
security for the performance when due by such Holders of their respective
obligations under the related Forward Purchase Contracts, a security interest in
all of the right, title and interest of the Forward Purchase Contract Agent and
such Holders (a) in the Notes constituting a part of the Securities and any
Treasury Securities delivered in exchange for any Notes (or, if applicable, the
Applicable Ownership Interest in the Treasury Portfolio), any Notes (or, if
applicable, the Applicable Ownership Interest in the Treasury Portfolio)
delivered in exchange for any Treasury Securities, in accordance with Article IV
hereof, in each case that have been Transferred to or received by the Collateral
Agent and not released by the Collateral Agent to such Holders under the
provisions of this Agreement; (b) in payments made by Holders pursuant to
Section 4.4; (c) in the Collateral Account and all securities, financial assets,
Cash and other property credited thereto and all Security Entitlements related
thereto; (d) in the Treasury Portfolio purchased on behalf of the Holders of
Upper DECS by the Collateral Agent upon the occurrence of a Successful Initial
Remarketing or a Tax Event Redemption as provided in Article VI, or otherwise,
and (e) all Proceeds of the foregoing (all of the foregoing, collectively, the
"Collateral").
Prior to or concurrently with the execution and delivery of
this Agreement, the Forward Purchase Contract Agent, on behalf of the initial
Holders of the Securities, shall cause the Notes comprising a part of the Upper
DECS to be Transferred to the Collateral Agent for the benefit of the Company.
Such Notes shall be Transferred by physically delivering such Notes to the
Securities Intermediary indorsed in blank (or accompanied by a stock or bond
power indorsed in blank) and causing the Securities Intermediary to credit the
Collateral Account with such Notes such that security entitlements with respect
to such Notes are credited to the Collateral Account. In the event a Holder of
Upper DECS so elects, such Holder may Transfer Treasury Securities to the
Collateral Agent for the benefit of the Company as provided in Section 4.1
hereof in exchange for the release by the Collateral Agent on behalf of the
Company of Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, with an aggregate principal amount equal
to the aggregate principal amount of the Treasury Securities so Transferred, in
the case of Notes, or with an appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio equal to the aggregate principal amount of the Treasury Securities so
Transferred, in the event that a Successful Initial Remarketing or a Tax Event
Redemption has occurred, to the Forward Purchase Contract Agent on behalf of
such Holder. In the event that a Holder of Stripped DECS so elects, such Holder
may Transfer Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio to the Collateral Agent for the benefit of the Company as
provided in Section 4.2 hereof in exchange for the release by the Collateral
Agent on behalf of the Company
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of Treasury Securities with an aggregate principal amount at maturity equal to
the aggregate principal amount of the Notes or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio so transferred to the Forward Purchase Contract Agent
on behalf of such Holder. Treasury Securities and the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as applicable, shall be
Transferred to the Collateral Account maintained by the Collateral Agent at the
Securities Intermediary by book-entry transfer to the Collateral Account in
accordance with the TRADES Regulations and other applicable law and by the
notation by the Securities Intermediary on its books that a Security Entitlement
with respect to such Treasury Securities or appropriate Applicable Ownership
Interest of the Treasury Portfolio, has been credited to the Collateral Account.
(b) For purposes of perfecting the Pledge under applicable
law, including, to the extent applicable, the TRADES Regulations or the Uniform
Commercial Code as adopted and in effect in any applicable jurisdiction, the
Collateral Agent shall be the agent of the Company as provided herein. The
pledge provided in this Section 2.1 is herein referred to as the "Pledge" and
the Notes or Treasury Securities subject to the Pledge, excluding any Notes that
are delivered pursuant to Section 6.2 hereof or Treasury Securities released
from the Pledge as provided in Article IV hereof, are hereinafter referred to as
"Pledged Notes" or the "Pledged Treasury Securities," respectively. Subject to
the Pledge and the provisions of Section 2.2 hereof, the Holders from time to
time shall have full beneficial ownership of the Collateral. Whenever directed
by the Collateral Agent acting on behalf of the Company, the Securities
Intermediary shall have the right to reregister the Notes or any other
securities held in physical form in its name.
Except as may be required in order to release Notes in
connection with a Holder's election to convert its investment from an Upper DECS
to a Stripped DECS, or except as otherwise required to release Notes as
specified herein, neither the Collateral Agent nor the Securities Intermediary
shall relinquish physical possession of any certificate evidencing a Note prior
to the termination of this Agreement, except Notes may be held in any clearing
corporation in an account including only assets of customers of the Collateral
Agent or Securities Intermediary. If it becomes necessary for the Securities
Intermediary to relinquish physical possession of a certificate in order to
release a portion of the Notes evidenced thereby from the Pledge, the Securities
Intermediary shall use commercially reasonable efforts to obtain physical
possession of a replacement certificate evidencing any Notes remaining subject
to the Pledge hereunder registered to it or indorsed in blank (or accompanied by
a stock or bond power indorsed in blank) within fifteen days of the date it
relinquished possession. The Securities Intermediary shall promptly notify the
Company and the Collateral Agent of the Securities Intermediary's failure to
obtain possession of any such replacement certificate as required hereby.
Section 2.2 Control and Perfection. (a) In connection with the
Pledge granted in Section 2.1, and subject to the other provisions of this
Agreement, the Holders from time to time acting through the Forward Purchase
Contract Agent, as their attorney-in-fact, and the Forward Purchase Contract
Agent each hereby authorize and direct the Securities Intermediary (without the
necessity of obtaining the further consent of the Forward Purchase Contract
Agent or any of the Holders), and the Securities Intermediary agrees, to comply
with and follow any instructions and entitlement orders (as defined in Section
8-102(a)(8) of the Code) that the Collateral Agent
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on behalf of the Company may give in writing with respect to the Collateral
Account, the Collateral credited thereto and any Security Entitlements with
respect to any thereof. Such instructions and entitlement orders may, without
limitation, direct the Securities Intermediary to transfer, redeem, sell,
liquidate, assign, deliver or otherwise dispose of the Notes, the Treasury
Securities, the Treasury Portfolio, and any Security Entitlements with respect
thereto and to pay and deliver any income, proceeds or other funds derived
therefrom to the Company. The Holders from time to time acting through the
Forward Purchase Contract Agent hereby further authorize and direct the
Collateral Agent, as agent of the Company, to itself issue instructions and
entitlement orders, and to otherwise take action, with respect to the Collateral
Account, the Collateral credited thereto and any security entitlements with
respect thereto, pursuant to the terms and provisions hereof, all without the
necessity of obtaining the further consent of the Forward Purchase Contract
Agent or any of the Holders. The Collateral Agent shall be the agent of the
Company and shall act as directed in writing by the Company. Without limiting
the generality of the foregoing, the Collateral Agent shall issue entitlement
orders to the Securities Intermediary when and as directed by the Company.
(b) The Securities Intermediary hereby confirms and agrees
that: (i) all securities or other property underlying any financial assets
credited to the Collateral Account shall be registered in the name of the
Securities Intermediary, indorsed to the Securities Intermediary or in blank or
credited to another collateral account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to the Collateral
Account be registered in the name of the Forward Purchase Contract Agent, the
Collateral Agent, the Company or any Holder, payable to the order of, or
specially indorsed to, the Forward Purchase Contract Agent, the Collateral
Agent, the Company or any Holder except to the extent the foregoing have been
specially indorsed to the Securities Intermediary or in blank; (ii) all property
delivered to the Securities Intermediary pursuant to this Pledge Agreement
(including, without limitation, any Notes, the Treasury Portfolio or Treasury
Securities) will be promptly credited on the books of the Securities
Intermediary to the Collateral Account; (iii) the Collateral Account is an
account to which financial assets are or may be credited, and the Securities
Intermediary shall, subject to the terms of this Agreement, treat the Forward
Purchase Contract Agent as entitled to exercise the rights of any financial
asset credited to the Collateral Account; (iv) the Securities Intermediary has
not entered into, and until the termination of this Agreement will not enter
into, any agreement with any other person relating to the Collateral Account
and/or any financial assets credited thereto pursuant to which it has agreed to
comply with entitlement orders (as defined in Section 8-102(a)(8) of the Code)
of such other person; and (v) the Securities Intermediary has not entered into,
and until the termination of this Agreement will not enter into, any agreement
with the Company, the Collateral Agent or the Forward Purchase Contract Agent
purporting to limit or condition the obligation of the Securities Intermediary
to comply with entitlement orders as set forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item
of property (whether investment property, financial asset, security, instrument
or cash) credited to the Collateral Account shall be treated as a "financial
asset" within the meaning of Section 8-102(a)(9) of the Code.
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(d) In the event of any conflict between this Agreement (or
any portion thereof) and any other agreement now existing or hereafter entered
into, the terms of this Agreement shall prevail.
(e) The Forward Purchase Contract Agent hereby irrevocably
constitutes and appoints the Collateral Agent and the Company, with full power
of substitution, as the Forward Purchase Contract Agent's attorneys-in-fact to
take on behalf of, and in the name, place and stead of, the Forward Purchase
Contract Agent and the Holders, any action necessary or desirable to perfect and
to keep perfected the security interest in the Collateral referred to in Section
2.1. The grant of such power-of-attorney shall not be deemed to require of the
Collateral Agent any specific duties or obligations not otherwise assumed by the
Collateral Agent hereunder, it being hereby acknowledged and agreed that the
Collateral Agent shall have no duty to file or record any documents in any
jurisdiction for purposes of perfecting or maintaining the security interest in
the Collateral except those that it shall be directed in writing to execute and
cause to be filed by the Company or the Forward Purchase Contract Agent.
ARTICLE III
DISTRIBUTIONS ON PLEDGED COLLATERAL
So long as the Forward Purchase Contract Agent is the
registered owner of the Pledged Notes, it shall receive all payments thereon. If
the Pledged Notes are reregistered, such that the Collateral Agent becomes the
registered holder, all payments of principal on the Pledged Notes or, if
applicable, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, or
interest payments on the Pledged Notes or on the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
of the Treasury Portfolio, as the case may be, and all payments of the principal
of, or cash distributions on, any Pledged Treasury Securities received by the
Collateral Agent that are properly payable hereunder, shall be paid by the
Collateral Agent by wire transfer in same day funds:
(i) in the case of (A) interest payments with respect to the
Pledged Notes or the appropriate Applicable Ownership Interest (as specified in
clause (B) of the definition of such term) of the Treasury Portfolio, as the
case may be, and (B) any payments of principal or, if applicable, the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio with respect to any Notes or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, that have been released from the Pledge pursuant to Section 4.1 or
4.3 hereof, to the Forward Purchase Contract Agent, for the benefit of the
relevant Holders of Securities, to the account designated by the Forward
Purchase Contract Agent for such purpose, no later than 2:00 p.m., New York City
time, on the Business Day such payment is received by the Collateral Agent
(provided that in the event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30 a.m., New York
City time, on the next succeeding Business Day);
(ii) in the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to Section
4.2 or 4.3 hereof, to the Forward Purchase Contract Agent, for the benefit of
the Holders of the Stripped DECS, to the
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accounts designated by the Forward Purchase Contract Agent in writing for such
purpose, no later than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
or after 12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day); and
(iii) in the case of payments of the Proceeds of any Pledged
Notes or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, as the case may
be, or the Proceeds of any Pledged Treasury Securities, to the Company on the
Forward Purchase Contract Settlement Date to the extent of the Purchase Price in
accordance with the procedure set forth in Section 4.6(a) or 4.6(b) hereof, in
full satisfaction of the respective obligations of the Holders under the related
Forward Purchase Contracts and, to the extent such Proceeds exceed the Purchase
Price, to the Forward Purchase Contract Agent for the benefit of the Holders.
All payments received by the Forward Purchase Contract Agent
as provided herein shall be applied by the Forward Purchase Contract Agent
pursuant to the provisions of the Forward Purchase Contract Agreement. If,
notwithstanding the foregoing, the Forward Purchase Contract Agent shall receive
any payments of the principal amount of the Notes or, if applicable, the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) on account of any Pledged Note or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as applicable, that, at
the time of such payment, is subject to the Pledge, or a Holder of a Stripped
DECS shall receive any payments of principal on account of any Treasury
Securities that, at the time of such payment, are Pledged Treasury Securities,
the Forward Purchase Contract Agent or such Holder shall hold the same as
trustee of an express trust for the benefit of the Company (and promptly deliver
the same over to the Company) for application to the obligations of the Holders
under the related Forward Purchase Contracts, and the Holders shall acquire no
right, title or interest in any such payments of principal so received.
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES
Section 4.1 Substitution for Notes and the Creation of
Stripped DECS. At any time on or prior to the seventh Business Day immediately
preceding the Forward Purchase Contract Settlement Date (or on or prior to the
second Business Day immediately preceding the Forward Purchase Contract
Settlement Date, if a Tax Event Redemption or a Successful Initial Remarketing
has occurred), a Holder of Upper DECS shall have the right to substitute
Treasury Securities for the Pledged Notes (or, if a Tax Event Redemption or a
Successful Initial Remarketing has occurred, the appropriate Applicable
Ownership Interest in the Treasury Portfolio) securing such Holder's obligations
under the Forward Purchase Contract(s) comprising a part of its Upper DECS in
integral multiples of 20 Upper DECS by (a) Transferring to the Collateral Agent
Treasury Securities having a Value equal to the aggregate principal amount of
the Pledged Notes (or appropriate Applicable Ownership Interest (as defined in
clause (A) of the definition of such term) in the Treasury Portfolio, as the
case may be), to be released and transferring the related Upper DECS to the
Forward Purchase Contract Agent, accompanied by a notice, substantially in the
form of Exhibit B hereto, to the Forward Purchase Contract Agent
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stating that such Holder has Transferred the relevant Treasury Securities to the
Collateral Agent pursuant to clause (a) above (stating the Value of the Treasury
Securities Transferred by such Holder) and requesting that the Forward Purchase
Contract Agent instruct the Collateral Agent to release from the Pledge the
Pledged Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, related to such Upper DECS. The Forward Purchase
Contract Agent shall instruct the Collateral Agent in the form provided in
Exhibit A; provided, however, that if a Tax Event Redemption or a Successful
Initial Remarketing has occurred and the Treasury Portfolio has become a
component of the Upper DECS, Holders of Upper DECS may make such substitution
only in integral multiples of 32,000 Upper DECS or another integral multiple
such that the Treasury Securities to be deposited and those to be released are
in integral multiples of $1,000 at any time on or prior to the second Business
Day immediately preceding the Forward Purchase Contract Settlement Date. Without
limiting the generality of any other provision herein, in no event shall the
Collateral Agent have any liability for acting in accordance with instructions
in the form provided in Exhibit A. Upon receipt of Treasury Securities from a
Holder of Upper DECS and the related instruction from the Forward Purchase
Contract Agent, the Collateral Agent shall release the Pledged Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, and shall promptly Transfer to the securities account specified by the
Forward Purchase Contract Agent such Pledged Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, free and clear
of any lien, pledge or security interest created hereby. All items Transferred
and/or substituted by any Holder pursuant to this Section 4.1, Section 4.2 or
any other Section of this Agreement shall be Transferred and/or substituted free
and clear of all liens, claims and encumbrances.
Section 4.2 Substitution of Treasury Securities and the
Recreation of Upper DECS. At any time on or prior to the seventh Business Day
immediately preceding the Forward Purchase Contract Settlement Date (or on or
prior to the second Business Day immediately preceding the Forward Purchase
Contract Settlement Date, if a Tax Event Redemption or a Successful Initial
Remarketing has occurred), a Holder of Stripped DECS shall have the right to
recreate Upper DECS in integral multiples of 20 Stripped DECS by (a)
Transferring to the Collateral Agent Notes having a Value equal to the Value of
the Pledged Treasury Securities to be released (or the appropriate Applicable
Ownership Interest of the Treasury Portfolio with the Applicable Ownership
Interest (as defined in clause (A) of the definition of such term) having Value
equal to the Value of the Pledged Treasury Securities to be released) and (b)
delivering the related Stripped DECS to the Forward Purchase Contract Agent,
accompanied by a notice, substantially in the form of Exhibit B hereto, to the
Forward Purchase Contract Agent stating that such Holder has transferred the
relevant amount of Notes (or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be) to the Collateral Agent pursuant to
clause (a) above and requesting that the Forward Purchase Contract Agent
instruct the Collateral Agent to release from the Pledge the Pledged Treasury
Securities underlying such Stripped DECS. The Forward Purchase Contract Agent
shall instruct the Collateral Agent in the form provided in Exhibit A; provided,
however, that if a Tax Event Redemption or a Successful Initial Remarketing has
occurred and the Treasury Portfolio has become a component of the Upper DECS,
Holders of Stripped DECS may make such substitution only in integral multiples
of 32,000 Stripped DECS or another integral multiple such that the Treasury
Securities to be deposited and those to be released are in integral multiples of
$1,000, at any time on or prior to the second Business Day immediately preceding
the Forward Purchase Contract Settlement Date.
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Without limiting the generality of any other provision herein, in no event shall
the Collateral Agent have any liability for acting in accordance with
instructions in the form provided in Exhibit A. Upon receipt of the Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, from such Holder and the instruction from the Forward Purchase Contract
Agent, the Collateral Agent shall release the Treasury Securities having a
corresponding aggregate principal amount from the Pledge and shall promptly
Transfer such Treasury Securities, free and clear of any lien, pledge or
security interest created hereby, to the Forward Purchase Contract Agent.
Section 4.3 Termination Event. Upon receipt by the Collateral
Agent of written notice from the Company or the Forward Purchase Contract Agent
that there has occurred a Termination Event, the Collateral Agent shall release
all Collateral from the Pledge and shall promptly Transfer any Pledged Notes (or
the Applicable Ownership Interest of the Treasury Portfolio if a Tax Event
Redemption or a Successful Initial Remarketing has occurred) and Pledged
Treasury Securities to the Forward Purchase Contract Agent for the benefit of
the Holders of the Upper DECS and the Stripped DECS, respectively, free and
clear of any lien, pledge or security interest or other interest created hereby.
If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code, and if the Collateral Agent shall
for any reason fail promptly to effectuate the release and Transfer of all
Pledged Notes, the Treasury Portfolio or of the Pledged Treasury Securities, as
the case may be, as provided by this Section 4.3, the Forward Purchase Contract
Agent shall (i) use reasonable efforts to obtain an opinion of a nationally
recognized law firm reasonably acceptable to the Collateral Agent to the effect
that, as a result of the Company's being the debtor in such a bankruptcy case,
the Collateral Agent will not be prohibited from releasing or Transferring the
Collateral as provided in this Section 4.3, and shall deliver such opinion to
the Collateral Agent within ten days after the occurrence of such Termination
Event, and if (y) the Forward Purchase Contract Agent shall be unable to obtain
such opinion within ten days after the occurrence of such Termination Event or
(z) the Collateral Agent shall continue, after delivery of such opinion, to
refuse to effectuate the release and Transfer of all Pledged Notes, the Treasury
Portfolio or the Pledged Treasury Securities, as the case may be, as provided in
this Section 4.3, then the Forward Purchase Contract Agent shall within fifteen
days after the occurrence of such Termination Event commence an action or
proceeding in the court with jurisdiction of the Company's case under the
Bankruptcy Code seeking an order requiring the Collateral Agent to effectuate
the release and transfer of all Pledged Notes, the Treasury Portfolio or of the
Pledged Treasury Securities, as the case may be, as provided by this Section 4.3
or (ii) commence an action or proceeding like that described in subsection
(i)(z) hereof within ten days after the occurrence of such Termination Event.
Section 4.4 Cash Settlement. (a) Upon receipt by the
Collateral Agent of (i) a notice from the Forward Purchase Contract Agent
promptly after the receipt by the Forward Purchase Contract Agent of such notice
that a Holder of an Upper DECS has elected, in accordance with the procedures
specified in Section 5.5(a)(i) of the Forward Purchase Contract Agreement to
settle its Forward Purchase Contract with Cash and (ii) payment of the amount
required to settle such Forward Purchase Contract by such Holder on or prior to
11:00 a.m., New York City time, on the Business Day immediately preceding the
Forward Purchase Contract Settlement Date in lawful money of the United States
by certified or cashiers' check or wire
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transfer in immediately available funds payable to or upon the order of the
Company, then the Collateral Agent shall, at the written direction of the
Company, promptly invest any Cash received from a Holder in connection with a
Cash Settlement in Permitted Investments. Upon receipt of the proceeds upon the
maturity of the Permitted Investments on the Forward Purchase Contract
Settlement Date, the Collateral Agent shall pay the portion of such proceeds and
deliver any certified or cashiers' checks received and any funds so wired, in an
aggregate amount equal to the Purchase Price, to the Company on the Forward
Purchase Contract Settlement Date, and shall distribute any funds in respect of
the interest earned from the Permitted Investments to the Forward Purchase
Contract Agent for payment to the relevant Holders.
(b) If a Holder of an Upper DECS (unless a Tax Event
Redemption or a Successful Initial Remarketing has occurred) fails to notify the
Forward Purchase Contract Agent of its intention to make a Cash Settlement in
accordance with Section 5.5(a)(i) of the Forward Purchase Contract Agreement,
such failure shall constitute an event of default under the Forward Purchase
Contract Agreement and hereunder, and the Holder shall be deemed to have
consented to the disposition of the Pledged Notes pursuant to the remarketing as
described in Section 5.5(b) of the Forward Purchase Contract Agreement, which is
incorporated herein by reference. If a Holder of an Upper DECS does notify the
Forward Purchase Contract Agent as provided in Section 5.5(a)(i) of the Forward
Purchase Contract Agreement of its intention to pay the Purchase Price in cash,
but fails to make such payment as required by Section 5.5(a)(ii) of the Forward
Purchase Contract Agreement, the Pledged Notes of such a Holder will not be
remarketed but instead the Collateral Agent, for the benefit of the Company,
will exercise its rights as a secured party with respect to such Notes at the
direction of the Company to retain or dispose of the Collateral in accordance
with applicable law. In addition, in the event of a Failed Secondary Remarketing
as described in Section 5.5(b) of the Forward Purchase Contract Agreement, such
Failed Secondary Remarketing shall constitute an additional event of default
hereunder by such Holder and the Collateral Agent, for the benefit of the
Company, will also exercise its rights as a secured party with respect to such
Pledged Notes at the direction of the Company to retain or dispose of the
Collateral in accordance with applicable law.
Section 4.5 Early Settlement. Upon written notice to the
Collateral Agent by the Forward Purchase Contract Agent that one or more Holders
of Securities have elected to effect Early Settlement of their respective
obligations under the Forward Purchase Contracts forming a part of such
Securities in accordance with the terms of the Forward Purchase Contracts and
the Forward Purchase Contract Agreement (setting forth the number of such
Forward Purchase Contracts as to which such Holders have elected to effect Early
Settlement), and that the Forward Purchase Contract Agent has received from such
Holders, and paid to the Company as confirmed in writing by the Company, the
related Early Settlement Amounts pursuant to the terms of the Forward Purchase
Contracts and the Forward Purchase Contract Agreement and that all conditions to
such Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio in the case of a Holder of Upper
DECS or (b) Pledged Treasury Securities in the case of a Holder of Stripped
DECS, as the case may be, in each case with an aggregate principal amount, as
the case may be, equal to the product of (i) the Stated Amount times (ii) the
number of such Forward Purchase Contracts as to which such Holders have elected
to effect Early Settlement, and shall Transfer all such Pledged Notes, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or the
Pledged Treasury Securities, as the case may
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be, free and clear of the Pledge created hereby, to the Forward Purchase
Contract Agent for the benefit of such Holders.
Section 4.6 Application of Proceeds; Settlement. (a) In the
event a Holder of Upper DECS (unless a Tax Event Redemption or a Successful
Initial Remarketing has occurred) has not elected to make an effective Cash
Settlement by notifying the Forward Purchase Contract Agent (with a copy to the
Collateral Agent) in the manner provided for in paragraph 5.5(a)(i) in the
Forward Purchase Contract Agreement and has not made an Early Settlement of the
Forward Purchase Contracts underlying its Upper DECS, such Holder shall be
deemed to have elected to pay for the shares of Common Stock to be issued under
such Forward Purchase Contracts from the Proceeds of the related Pledged Notes.
The Collateral Agent shall, by 10:00 a.m., New York City time, on the fourth
Business Day immediately preceding the Forward Purchase Contract Settlement
Date, without any instruction from such Holder of Upper DECS, present the
related Pledged Notes to the Remarketing Agent for remarketing. Upon receiving
such Pledged Notes, the Remarketing Agent, pursuant to the terms of the
Remarketing Agreement and the Supplemental Remarketing Agreement, will use its
reasonable efforts to remarket such Pledged Notes on such date at a price of
approximately 100.5% (but not less than 100%) of the aggregate Value of such
Pledged Notes. After deducting as the Remarketing Fee an amount not exceeding 25
basis points (.25%) of the aggregate Value of the remarketed Pledged Notes from
any amount of such Proceeds in excess of the aggregate Value of the Remarketed
Pledged Notes, the Remarketing Agent will remit the entire amount of the
Proceeds of such remarketing to the Collateral Agent. On the Forward Purchase
Contract Settlement Date, the Collateral Agent shall remit to the Company that
portion of the Proceeds from such remarketing equal to the aggregate Value of
such remarketed Pledged Notes to satisfy in full the obligations of such Holders
of Upper DECS to pay the Purchase Price to purchase the Common Stock under the
related Forward Purchase Contracts. The remaining portion of such Proceeds, if
any, shall be remitted by the Collateral Agent to the Forward Purchase Contract
Agent for payment to the Holders. If the Remarketing Agent advises the
Collateral Agent in writing that it cannot remarket the related Pledged Notes of
such Holders of Upper DECS at a price not less than 100% of the aggregate Value
of such Pledged Notes or if the remarketing shall not have occurred because a
condition precedent to the remarketing shall not have been fulfilled, thus
resulting in a Failed Secondary Remarketing and an event of default under the
Forward Purchase Contract Agreement and hereunder, the Collateral Agent, for the
benefit of the Company will, at the written direction of the Company, retain or
dispose of the Pledged Notes in accordance with applicable law and satisfy in
full, from any such disposition or retention, such Holder's obligation to pay
the Purchase Price for the Common Stock.
(b) In the event a Holder of Stripped DECS or Upper DECS (if a
Tax Event Redemption or a Successful Initial Remarketing has occurred) has not
made an Early Settlement of the Forward Purchase Contracts underlying its
Stripped DECS or Upper DECS, such Holder shall be deemed to have elected to pay
for the shares of Common Stock to be issued under such Forward Purchase
Contracts from the Proceeds of the related Pledged Treasury Securities or the
appropriate Applicable Ownership Interest (as defined in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be. On the
Business Day immediately prior to the Forward Purchase Contract Settlement Date,
the Collateral Agent shall, at the written direction of the Forward Purchase
Contract Agent, which written direction shall be furnished to the Collateral
Agent prior to 11:30 a.m., New York City time, invest the Cash proceeds of the
15
maturing Pledged Treasury Securities or the maturing appropriate Applicable
Ownership Interest (as defined in clause (A) of the definition of such term) of
the Treasury Portfolio, as the case may be, in overnight Permitted Investments.
Without receiving any instruction from any such Holder of Stripped DECS or Upper
DECS, the Collateral Agent shall remit to the Company that portion of the
Proceeds of the related Pledged Treasury Securities or appropriate Applicable
Ownership Interest (as defined in clause (A) of the definition of such term) of
the Treasury Portfolio equal to the aggregate Purchase Price of such Forward
Purchase Contracts on the Forward Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged
Treasury Securities or appropriate Applicable Ownership Interest (as defined in
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, and the investment earnings from the investment in overnight
Permitted Investments is in excess of the aggregate Purchase Price of the
Forward Purchase Contracts being settled thereby, the Collateral Agent shall
remit such excess, when received, to the Forward Purchase Contract Agent for the
benefit of the Holders.
(c) Pursuant to the Remarketing Agreement and subject to the
terms of the Supplemental Remarketing Agreement, on or prior to the second
Business Day immediately preceding the Initial Remarketing Date or the Secondary
Remarketing Date, as applicable, but no earlier than the Payment Date
immediately preceding such date, holders of Separate Notes may elect to have
their Separate Notes remarketed by delivering their Separate Notes, together
with a notice of such election, substantially in the form of Exhibit C hereto,
to the Custodial Agent. The Custodial Agent shall hold such Separate Notes in an
account separate from the Collateral Account. A holder of Separate Notes
electing to have its Separate Notes remarketed will also have the right to
withdraw such election by written notice to the Custodial Agent, substantially
in the form of Exhibit D hereto, on or prior to the second Business Day
immediately preceding the Initial Remarketing Date or the Secondary Remarketing
Date, as applicable, upon which notice the Custodial Agent shall return such
Separate Notes to such holder.
On the Business Day immediately preceding the Initial
Remarketing Date or the Secondary Remarketing Date, as applicable, the Custodial
Agent shall notify the Remarketing Agent of the aggregate principal amount of
the Separate Notes to be remarketed and will deliver to the Remarketing Agent
for remarketing all Separate Notes delivered to the Custodial Agent pursuant to
this Section 4.6(c) and not withdrawn pursuant to the terms hereof prior to such
date. After deducting the Remarketing Fee to the extent permitted under the
terms of the Remarketing Agreement, the Remarketing Agent will remit to the
Custodial Agent the remaining portion of the proceeds for the benefit of such
holders. In the event of a Failed Initial Remarketing or a Failed Secondary
Remarketing, as applicable, the Remarketing Agent will promptly return such
Separate Notes to the Custodial Agent for redelivery to such holders.
ARTICLE V
VOTING RIGHTS - NOTES
The Forward Purchase Contract Agent may exercise, or refrain
from exercising, any and all voting and other consensual rights pertaining to
the Pledged Notes or any part thereof for any purpose not inconsistent with the
terms of this Agreement and in accordance with the terms of the Forward Purchase
Contract Agreement; provided, that the Forward Purchase
16
Contract Agent shall give the Company and the Collateral Agent at least five
days' prior written notice of the manner in which it intends to exercise, or its
reasons for refraining from exercising, any such right. Upon receipt of any
notices and other communications in respect of any Pledged Notes, including
notice of any meeting at which holders of Notes are entitled to vote or
solicitation of consents, waivers or proxies of holders of Notes, the Collateral
Agent shall use reasonable efforts to send promptly to the Forward Purchase
Contract Agent such notice or communication, and as soon as reasonably
practicable after receipt of a written request therefor from the Forward
Purchase Contract Agent, execute and deliver to the Forward Purchase Contract
Agent such proxies and other instruments in respect of such Pledged Notes (in
form and substance satisfactory to the Collateral Agent) as are prepared by the
Forward Purchase Contract Agent with respect to the Pledged Notes.
ARTICLE VI
RIGHTS AND REMEDIES; TAX EVENT REDEMPTION
Section 6.1 Rights and Remedies of the Collateral Agent. (a)
In addition to the rights and remedies specified in Section 4.4 hereof or
otherwise available at law or in equity, after an event of default hereunder,
the Collateral Agent shall have all of the rights and remedies with respect to
the Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
"Code") (whether or not, to the extent permitted by law, the Code is in effect
in the jurisdiction where the rights and remedies are asserted) and the TRADES
Regulations and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted. Wherever reference is made in this Agreement
to any section of the Code, such reference shall be deemed to include a
reference to any provision of the Code, which is a successor to, or amendment
of, such section. Without limiting the generality of the foregoing, such
remedies may include, to the extent permitted by applicable law, (i) retention
of the Pledged Notes or other Collateral in full satisfaction of the Holders
obligations under the Forward Purchase Contracts or (ii) sale of the Pledged
Notes or other Collateral in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, in the event the Collateral Agent is
unable to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio or on account of principal payments of any Pledged
Treasury Securities as provided in Article III hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Forward Purchase Contracts, the
inability to make such payments shall constitute an event of default hereunder
and the Collateral Agent shall have and may exercise, with reference to such
Pledged Treasury Securities, or such appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, and such obligations of such Holder, any and all of
the rights and remedies available to a secured party under the Code and the
TRADES Regulations after default by a debtor, and as otherwise granted herein or
under any other law.
17
(c) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, the Collateral Agent is hereby
irrevocably authorized to receive and collect all payments of (i) principal and
interest on the Pledged Notes, (ii) the principal amount of the Pledged Treasury
Securities, or (iii) the appropriate Applicable Ownership Interest of the
Treasury Portfolio, subject, in each case, to the provisions of Article III, and
as otherwise granted herein.
(d) The Forward Purchase Contract Agent, individually and as
attorney-in-fact for each Holder of Securities, agrees that, from time to time,
upon the written request of the Collateral Agent, the Forward Purchase Contract
Agent or such Holder shall execute and deliver such further documents and do
such other acts and things as the Collateral Agent may reasonably request in
order to maintain the Pledge, and the perfection and priority thereof, and to
confirm the rights of the Collateral Agent hereunder. The Forward Purchase
Contract Agent shall have no liability to any Holder for executing any documents
or taking any such acts requested by the Collateral Agent hereunder, except for
liability for its own negligent act, its own negligent failure to act or its own
willful misconduct.
Section 6.2 Tax Event Redemption. Upon the occurrence of a Tax
Event Redemption prior to the Forward Purchase Contract Settlement Date, the
aggregate Redemption Price payable on the Tax Event Redemption Date with respect
to the Pledged Notes shall be delivered to the Collateral Agent by the Note
Trustee on or prior to 12:00 p.m., New York City time, by wire transfer in
immediately available funds at such place and at such account as may be
designated by the Collateral Agent in exchange for the Pledged Notes. In the
event the Collateral Agent receives such Redemption Price, the Collateral Agent
will, at the written direction of the Company, apply an amount, out of such
Redemption Price, equal to the aggregate Redemption Amount with respect to the
Pledged Notes to purchase from the Quotation Agent the Treasury Portfolio and
promptly remit the remaining portion of such Redemption Price to the Forward
Purchase Contract Agent for payment to the Holders of Upper DECS. The Collateral
Agent shall Transfer the Treasury Portfolio to the Collateral Account to secure
the obligation of all Holders of Upper DECS to purchase Common Stock of the
Company under the Forward Purchase Contracts constituting a part of such Upper
DECS, in substitution for the Pledged Notes. Thereafter the Collateral Agent
shall have such security interests, rights and obligations with respect to the
Treasury Portfolio as it had in respect of the Pledged Notes as provided in
Articles II, III, IV, V and VI, and any reference herein to the Notes shall be
deemed to be reference to such Treasury Portfolio, and any reference herein to
interest on the Notes shall be deemed to be a reference to distributions on such
Treasury Portfolio.
Section 6.3 Initial Remarketing. The Collateral Agent shall,
by 10:00 a.m., New York City time, on the fourth Business Day immediately
preceding May 17, 2004, without any instruction from any Holder of Upper DECS,
present the related Pledged Notes to the Remarketing Agent for remarketing. Upon
receiving such Pledged Notes, the Remarketing Agent, pursuant to the terms of
the Remarketing Agreement, will use its reasonable efforts to remarket such
Pledged Notes on such date at a price of approximately 100.5% (but not less than
100%) of the Treasury Portfolio Purchase Price. After deducting as the
Remarketing Fee an amount not exceeding 25 basis points (.25%) of the Treasury
Portfolio Purchase Price from any amount of such Proceeds in excess of the
Treasury Portfolio Purchase Price, the Remarketing Agent will remit the entire
amount of the Proceeds of such remarketing to the Collateral Agent
18
on or prior to 12:00 p.m., New York City time on May 17, 2004, by wire transfer
in immediately available funds at such place and at such account as may be
designated by the Collateral Agent in exchange for the Pledged Notes. In the
event the Collateral Agent receives such Proceeds, the Collateral Agent will, at
the written direction of the Company, apply an amount equal to the Treasury
Portfolio Purchase Price to purchase from the Quotation Agent the Treasury
Portfolio and promptly remit the remaining portion of such Proceeds to the
Forward Purchase Contract Agent for payment to the Holders of Upper DECS. The
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account
to secure the obligation of all Holders of Upper DECS to purchase Common Stock
of the Company under the Forward Purchase Contracts constituting a part of such
Upper DECS, in substitution for the Pledged Notes. Thereafter the Collateral
Agent shall have such security interests, rights and obligations with respect to
the Treasury Portfolio as it had in respect of the Pledged Notes as provided in
Articles II, III, IV, V and VI, and any reference herein to the Notes shall be
deemed to be reference to such Treasury Portfolio, and any reference herein to
interest on the Notes shall be deemed to be a reference to distributions on such
Treasury Portfolio.
Section 6.4 Substitutions. Whenever a Holder has the right to
substitute Treasury Securities, Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, for Collateral held by
the Collateral Agent, such substitution shall not constitute a novation of the
security interest created hereby.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 7.1 Representations and Warranties. The Holders from
time to time, acting through the Forward Purchase Contract Agent as their
attorney-in-fact (it being understood that the Forward Purchase Contract Agent
shall not be liable for any representation or warranty made by or on behalf of a
Holder), hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each day a Holder
Transfers Collateral that:
(a) such Holder has the power to grant a security interest in
and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral
and, in the case of Collateral delivered in physical form, is the sole holder of
such Collateral and is the sole beneficial owner of, or has the right to
Transfer, the Collateral it Transfers to the Collateral Agent, free and clear of
any security interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under Article II
hereof;
(c) upon the Transfer of the Collateral to the Collateral
Account, the Collateral Agent, for the benefit of the Company, will have a valid
and perfected first priority security interest therein (assuming that any
central clearing operation or any Intermediary or other entity not within the
control of the Holder involved in the Transfer of the Collateral, including the
Collateral Agent, gives the notices and takes the action required of it
hereunder and under applicable law for perfection of that interest and assuming
the establishment and exercise of control pursuant to Section 2.2 hereof); and
19
(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 II hereof or violate any provision of
any existing law or regulation applicable to it or of any mortgage, charge,
pledge, indenture, contract or undertaking to which it is a party or which is
binding on it or any of its assets.
Section 7.2 Covenants. The Holders from time to time, acting
through the Forward Purchase Contract Agent as their attorney-in-fact (it being
understood that the Forward Purchase Contract Agent shall not be liable for any
covenant made by or on behalf of a Holder), hereby covenant to the Collateral
Agent that for so long as the Collateral remains subject to the Pledge:
(a) neither the Forward Purchase Contract Agent nor such
Holders will create or purport to create or allow to subsist any mortgage,
charge, lien, pledge or any other security interest whatsoever over the
Collateral or any part of it other than pursuant to this Agreement; and
(b) neither the Forward Purchase Contract Agent nor such
Holders will sell or otherwise dispose (or attempt to dispose) of the Collateral
or any part of it except for the beneficial interest therein, subject to the
pledge hereunder, transferred in connection with the Transfer of the Securities.
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ARTICLE VIII
THE COLLATERAL AGENT
It is hereby agreed as follows:
Section 8.1 Appointment, Powers and Immunities. The Collateral
Agent shall act as Agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. Each of
the Collateral Agent, the Custodial Agent and the Securities Intermediary: (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants or obligations shall be inferred from
this Agreement against any of them, nor shall any of them be bound by the
provisions of any agreement beyond the specific terms hereof; (b) shall not be
responsible for any recitals contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by it under, this
Agreement, the Securities or the Forward Purchase Contract Agreement, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement (other than as against the Collateral Agent), the Securities or
the Forward Purchase Contract Agreement or any other document referred to or
provided for herein or therein or for any failure by the Company or any other
Person (except the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be) to perform any of its obligations hereunder or
thereunder or for the perfection, priority or, except as expressly required
hereby, maintenance of any security interest created hereunder (it being
acknowledged and agreed that the Collateral Agent shall have no duty to file or
record any documents in any jurisdiction for purposes of perfecting or
maintaining the security interest in the Collateral except those that it shall
be directed in writing to execute and cause to be filed by the Company or the
Forward Purchase Contract Agent); (c) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder (except in the case
of the Collateral Agent, pursuant to directions furnished under Section 8.2
hereof, subject to Section 8.6 hereof); (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other document
or instrument referred to or provided for herein or in connection herewith or
therewith, except for its own gross negligence, bad faith or willful misconduct;
(e) shall not be required to advise any party as to selling or retaining, or
taking or refraining from taking any action with respect to, the Securities or
other property deposited hereunder; and (f) shall not be responsible for the
acts or omissions of any clearing corporation with whom collateral is deposited.
Notwithstanding anything to the contrary contained herein, none of the
Collateral Agent, the Custodial Agent or the Securities Intermediary shall have
any obligation, duty or responsibility to take any action unless such action is
non-discretionary and explicitly required hereunder or in a written direction
from the Company or the Forward Purchase Contract Agent given in accordance with
the terms hereof. Subject to the foregoing, during the term of this Agreement,
the Collateral Agent shall take all reasonable action in connection with the
safekeeping and preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral
Agent, the Custodial Agent or the Securities Intermediary to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder. In no event shall the Collateral Agent, the
21
Custodial Agent or the Securities Intermediary be liable for any amount in
excess of the Value of the Collateral. Notwithstanding the foregoing, the
Collateral Agent, the Custodial Agent, the Forward Purchase Contract Agent and
Securities Intermediary, each in its individual capacity, hereby waive any right
of setoff, bankers lien, liens or perfection rights as securities intermediary
or any counterclaim with respect to any of the Collateral.
Section 8.2 Instructions of the Company. The Company shall
have the right, by one or more instruments in writing executed and delivered to
the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, to direct the time, method and place of conducting any proceeding
for the realization of any right or remedy available to the Collateral Agent, or
of exercising any power conferred on the Collateral Agent, the Custodial Agent
or the Securities Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this Agreement; provided,
however, that (i) such direction shall not conflict with the provisions of any
law or of this Agreement and (ii) the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall be adequately indemnified as provided herein.
Nothing in this Section 8.2 shall impair the right of the
Collateral Agent in its discretion to take any action or omit to take any action
which it deems proper and which is not inconsistent with such direction.
Section 8.3 Reliance. Each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent shall be entitled conclusively to rely
upon any certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be. As to
any matters not expressly provided for by this Agreement, the Collateral Agent,
the Custodial Agent and the Securities Intermediary shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.
Section 8.4 Rights in other Capacities. The Collateral Agent,
the Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Forward Purchase Contract Agent, any Holder of
Securities and any holder of Separate Notes (and any of their respective
subsidiaries or affiliates) as if it were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary and their
affiliates may accept fees and other consideration from the Forward Purchase
Contract Agent, any Holder of Securities or any holder of Separate Notes without
having to account for the same to the Company; provided that each of the
Securities Intermediary, the Custodial Agent and the Collateral Agent covenants
and agrees with the Company that it shall not accept, receive or permit there to
be created in favor of itself and shall take no affirmative action to permit
there to be created in favor of any other Person, any security interest, lien or
other encumbrance of any kind in or upon the Collateral and the Collateral shall
be segregated or the books and records of the Collateral Agent and not
commingled with any other assets of any such Person.
22
Section 8.5 Non-Reliance. None of the Securities Intermediary,
the Custodial Agent or the Collateral Agent shall be required to keep itself
informed as to the performance or observance by the Company, the Forward
Purchase Contract Agent, the Remarketing Agent or any Holder of Securities of
this Agreement, the Forward Purchase Contract Agreement, the Securities or any
other document referred to or provided for herein or therein or to inspect the
properties or books of the Forward Purchase Contract Agent or any Holder of
Securities. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall not have any duty or responsibility to provide the Company or
the Remarketing Agent with any credit or other information concerning the
affairs, financial condition or business of the Forward Purchase Contract Agent,
any Holder of Securities or any holder of Separate Notes (or any of their
respective subsidiaries or affiliates) that may come into the possession of the
Collateral Agent, the Custodial Agent or the Securities Intermediary or any of
their respective affiliates.
Section 8.6 Compensation and Indemnity. The Company agrees:
(i) to pay Chase from time to time such compensation as shall be agreed in
writing between the Company and Chase for all services rendered by Chase as
Collateral Agent, Custodial Agent and Securities Intermediary hereunder and (ii)
to indemnify the Collateral Agent, the Custodial Agent and the Securities
Intermediary for, and to hold each of them harmless from and against, any loss,
liability or reasonable out-of-pocket expense incurred without gross negligence,
willful misconduct or bad faith on its part, arising out of or in connection
with the acceptance or administration of its powers and duties under this
Agreement, including the reasonable out-of-pocket costs and expenses (including
reasonable fees and expenses of counsel) of defending itself against any claim
or liability in connection with the exercise or performance of such powers and
duties. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall each promptly notify the Company of any third party claim
which may give rise to the indemnity hereunder and give the Company the
opportunity to participate in the defense of such claim with counsel reasonably
satisfactory to the indemnified party, and no such claim shall be settled
without the written consent of the Company, which consent shall not be
unreasonably withheld.
Section 8.7 Failure to Act. In the event of any ambiguity in
the provisions of this Agreement or any dispute between or conflicting claims by
or among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent, the Custodial Agent and the
Securities Intermediary shall be entitled, after notice to the Company and the
Forward Purchase Contract Agent, at its sole option, to refuse to comply with
any and all claims, demands or instructions with respect to such property or
funds so long as such dispute or conflict shall continue, and none of the
Collateral Agent, the Custodial Agent or the Securities Intermediary shall be or
become liable in any way to any of the parties hereto for its failure or refusal
to comply with such conflicting claims, demands or instructions. The Collateral
Agent, the Custodial Agent and the Securities Intermediary shall be entitled to
refuse to act until either (i) such conflicting or adverse claims or demands
shall have been finally determined by a court of competent jurisdiction or
settled by agreement between the conflicting parties as evidenced in a writing,
satisfactory to the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be, or (ii) the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be, shall have received
security or an indemnity reasonably satisfactory to the Collateral Agent, the
Custodial Agent or the Securities
23
Intermediary, as the case may be, sufficient to save the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may be, harmless
from and against any and all loss, liability or reasonable out-of-pocket expense
which the Collateral Agent, the Custodial Agent or the Securities Intermediary,
as the case may be, may incur by reason of its acting without bad faith, willful
misconduct or gross negligence. The Collateral Agent, the Custodial Agent or the
Securities Intermediary may in addition elect to commence an interpleader action
or seek other judicial relief or orders as the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be, may deem necessary.
Notwithstanding anything contained herein to the contrary, none of the
Collateral Agent, the Custodial Agent or the Securities Intermediary shall be
required to take any action that is in its opinion contrary to law or to the
terms of this Agreement, or which would in its opinion subject it or any of its
officers, employees or directors to liability.
Section 8.8 Resignation. Subject to the appointment and
acceptance of a successor Collateral Agent, Custodial Agent or Securities
Intermediary as provided below, (a) the Collateral Agent, the Custodial Agent
and the Securities Intermediary may resign at any time by giving notice thereof
to the Company and the Forward Purchase Contract Agent as attorney-in-fact for
the Holders of Securities, (b) the Collateral Agent, the Custodial Agent and the
Securities Intermediary may be removed at any time by the Company and (c) if the
Collateral Agent, the Custodial Agent or the Securities Intermediary fails to
perform any of its material obligations hereunder in any material respect for a
period of not less than 20 days after receiving written notice of such failure
by the Forward Purchase Contract Agent and such failure shall be continuing, the
Collateral Agent, the Custodial Agent or the Securities Intermediary may be
removed by the Forward Purchase Contract Agent. The Forward Purchase Contract
Agent shall promptly notify the Company of any removal of the Collateral Agent,
the Custodial Agent or the Securities Intermediary pursuant to clause (c) of the
immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be. If no successor Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's, Custodial Agent's or Securities
Intermediary's giving of notice of resignation or such removal, then the
retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, may petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be. Each of the Collateral Agent, the Custodial
Agent and the Securities Intermediary shall be a bank with a combined capital
and surplus of at least $75,000,000 which directly or through an affiliate
maintains an office in New York, New York. Upon the acceptance of any
appointment as Collateral Agent, Custodial Agent or Securities Intermediary, as
the case may be, hereunder by a successor Collateral Agent, Custodial Agent or
Securities Intermediary, as the case may be, such successor shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent, Custodial Agent or Securities Intermediary, as
the case may be, and the retiring Collateral Agent, Custodial Agent or
Securities Intermediary, as the case may be, shall take all appropriate action
to transfer any money and property held by it hereunder (including the
Collateral) to such successor. The retiring Collateral Agent, Custodial Agent or
Securities Intermediary shall, upon such succession, be discharged from its
duties and obligations as Collateral Agent, Custodial Agent or Securities
Intermediary hereunder. After any retiring Collateral Agent's, Custodial Agent's
or Securities Intermediary's resignation hereunder as Collateral Agent,
Custodial Agent or Securities Intermediary, the provisions of this Article
24
VIII shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Collateral Agent, Custodial
Agent or Securities Intermediary. Any resignation or removal of the Collateral
Agent hereunder shall be deemed for all purposes of this Agreement as the
simultaneous resignation or removal of the Custodial Agent and the Securities
Intermediary.
Section 8.9 Right to Appoint Agent or Advisor. The Collateral
Agent shall have the right to appoint agents or advisors in connection with any
of its duties hereunder, and the Collateral Agent shall not be liable for any
action taken or omitted by, or in reliance upon the advice of, such agents or
advisors selected in good faith. The appointment of agents pursuant to this
Section 8.9 shall be subject to prior consent of the Company, which consent
shall not be unreasonably withheld.
Section 8.10 Survival. The provisions of this Article VIII
shall survive termination of this Agreement and the resignation or removal of
the Collateral Agent or the Custodial Agent.
Section 8.11 Exculpation. Anything in this Agreement to the
contrary notwithstanding, in no event shall any of the Collateral Agent, the
Custodial Agent or the Securities Intermediary or their officers, employees or
agents be liable under this Agreement to any third party for indirect, special,
punitive, or consequential loss or damage of any kind whatsoever, including lost
profits, whether or not the likelihood of such loss or damage was known to the
Collateral Agent, the Custodial Agent or the Securities Intermediary, or any of
them, incurred without any act or deed that is found to be attributable to gross
negligence or willful misconduct on the part of the Collateral Agent, the
Custodial Agent or the Securities Intermediary.
ARTICLE IX
AMENDMENT
Section 9.1 Amendment Without Consent of Holders. Without the
consent of any Holders or the holders of any Separate Notes, the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Forward Purchase Contract Agent, at any time and from time to time, may amend
this Agreement, in form satisfactory to the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Forward Purchase Contract
Agent, for any of the following purposes:
(a) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of the
Company; or
(b) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon the
Company so long as such covenants or such surrender do not adversely affect the
validity, perfection or priority of the security interests granted or created
hereunder; or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or Forward
Purchase Contract Agent; or
25
(d) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, or to make any other provisions with respect to such matters or
questions arising under this Agreement, provided such action shall not adversely
affect the interests of the Holders.
Section 9.2 Amendment with Consent of Holders. With the
consent of the Holders of not less than a majority of the Forward Purchase
Contracts at the time outstanding, by Act of said Holders delivered to the
Company, the Forward Purchase Contract Agent or the Collateral Agent, as the
case may be, the Company, when duly authorized, the Forward Purchase Contract
Agent, the Collateral Agent, the Custodial Agent and the Securities Intermediary
may amend this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the rights of the Holders in respect of the
Securities; provided, however, that no such supplemental agreement shall,
without the consent of the Holder of each Outstanding Security affected thereby,
(a) change the amount or type of Collateral underlying a
Security (except for the rights of Holders of Upper DECS to
substitute the Treasury Securities for the Pledged Notes or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, or the rights of Holders of
Stripped DECS to substitute Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as applicable, for
the Pledged Treasury Securities), impair the right of the Holder
of any Security to receive distributions on the underlying
Collateral or otherwise adversely affect the Holder's rights in
or to such Collateral; or
(b) otherwise effect any action that would require the
consent of the Holder of each Outstanding Security affected
thereby pursuant to the Forward Purchase Contract Agreement if
such action were effected by an agreement supplemental thereto;
(c) reduce the amount payable or distributable to Holders
upon the remarketing of Notes; or
(d) reduce the percentage of Forward Purchase Contracts the
consent of whose Holders is required for any such amendment.
If any amendment referred to above would adversely affect only
the Upper DECS or the Stripped DECS, then only the affected class of Holders
shall be entitled to vote on the amendment and the amendment shall not be
effective except with the consent of the Holders of not less than a majority of
the affected class. It shall not be necessary for any Act of Holders under this
Article IX to approve the particular form of any proposed amendment, but it
shall be sufficient if such Act shall approve the substance thereof.
Section 9.3 Execution of Amendments. In executing any
amendment permitted by this Section, the Collateral Agent, the Custodial Agent,
the Securities Intermediary and the Forward Purchase Contract Agent shall be
entitled to receive and (subject to Section 8.1 hereof, with respect to the
Collateral Agent, and Section 7.1 of the Forward Purchase Contract Agreement,
with respect to the Forward Purchase Contract Agent) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such amendment
is authorized
26
or permitted by this Agreement and that all conditions precedent, if any, to the
execution and delivery of such amendment have been satisfied. All amendments
must be in writing, signed by all parties to this Agreement.
Section 9.4 Effect of Amendments. Upon the execution of any
amendment under this Article IX, this Agreement shall be modified in accordance
therewith, and such amendment shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered under the Forward
Purchase Contract Agreement shall be bound thereby.
Section 9.5 Reference to Amendments. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Article IX may, and shall if
required by the Company, the Collateral Agent or the Forward Purchase Contract
Agent, bear a notation in form approved by the Company, the Forward Purchase
Contract Agent and the Collateral Agent as to any matter provided for in such
amendment. If the Company shall so determine, new Security Certificates so
modified as to conform, in the opinion of the Collateral Agent, the Forward
Purchase Contract Agent and the Company, to any such amendment may be prepared
and executed by the Company and authenticated, executed on behalf of the Holders
and delivered by the Forward Purchase Contract Agent in accordance with the
Forward Purchase Contract Agreement and without charge or expense to Holders in
exchange for Outstanding Security Certificates.
ARTICLE X
MISCELLANEOUS
Section 10.1 No Waiver. To the extent permitted by law, no
failure on the part of any party hereto or any of its agents to exercise, and no
course of dealing with respect to, and no delay in exercising, any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise by any party hereto or any of its agents of any right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. To the extent permitted by law, the
remedies herein are cumulative and are not exclusive of any remedies provided by
law.
Section 10.2 Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without
limiting the foregoing, the above choice of law is expressly agreed to by the
Securities Intermediary, the Collateral Agent and the Holders from time to time
acting through the Forward Purchase Contract Agent, as their attorney-in-fact,
in connection with the establishment and maintenance of the Collateral Account.
The Company, the Collateral Agent and the Holders from time to time of the
Securities, acting through the Forward Purchase Contract Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Company, the Collateral Agent and the Holders from time to time of
the Securities, acting through the Forward Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of
27
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum, as
well as to trial by jury.
Section 10.3 Notices. All notices, requests, consents and
other communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
Section 10.4 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Company, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Forward Purchase Contract Agent, and the Holders from time
to time of the Securities, by their acceptance of the same, shall be deemed to
have agreed to be bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the Forward Purchase
Contract Agent.
Section 10.5 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 10.6 Severability. If any provision hereof is invalid
and unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be construed in order to carry out the intentions of
the parties hereto as nearly as may be possible and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
Section 10.7 Expenses, etc. The Company agrees to reimburse
Chase for: (a) all reasonable out-of-pocket costs and expenses of Chase
(including, without limitation, the reasonable fees and expenses of counsel to
Chase), 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 Chase as Collateral Agent hereunder (including, without limitation,
reasonable fees and expenses of counsel) in connection with (i) any enforcement
or proceedings resulting or incurred in connection with causing any Holder of
Securities to satisfy its obligations under the Forward Purchase Contracts
forming a part of the Securities and (ii) the enforcement of this Section 10.7;
and (c) all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of this
Agreement or any other document referred to herein and all costs, expenses,
taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated
hereby.
28
Section 10.8 Security Interest Absolute. All rights of the
Collateral Agent and security interests hereunder, and all obligations of the
Holders from time to time hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any provision
of the Forward Purchase Contracts or the Securities or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or any other term of, or any increase in the amount of, all or
any of the obligations of Holders of Securities under the related
Forward Purchase Contracts, or any other amendment or waiver of
any term of, or any consent to any departure from any requirement
of, the Forward Purchase Contract Agreement or any Forward
Purchase Contract or any other agreement or instrument relating
thereto; or
(c) any other circumstance which might otherwise constitute
a defense available to, or discharge of, a borrower, a guarantor
or a pledgor.
29
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
CENDANT CORPORATION
By:
----------------------------------
Name:
Title:
Address for Notices:
Cendant Corporation
9 West 57th Street
New York, NY 10019
Attention: Senior Vice President, Law
Telecopy: (212) 493-1923
BANK ONE TRUST COMPANY
NATIONAL ASSOCIATION,
as Forward Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By:
----------------------------------
Name:
Title:
Address for Notices:
1 Bank One Plaza
Suite IL1-0126
Chicago, IL 60670-0126
Attention: Global Corporate Trust
Services Division
Telecopy: (312) 407-1708
30
THE CHASE MANHATTAN BANK
as Collateral Agent, Custodial Agent
and as Securities Intermediary
By:_____________________
Name:
Title:
Address for Notices:
The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001-2697
Attention: Institutional Trust Services
Telecopy: (212) 946-8160
31
EXHIBIT A
INSTRUCTION FROM FORWARD PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank
Re: Cendant Corporation (the "Company")
------------------------------------
We hereby notify you in accordance with Section [4.1] [4.2] of
the Pledge Agreement, dated as of July 27, 2001 (the "Pledge Agreement"), among
the Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary, and ourselves, as Forward Purchase Contract Agent and as
attorney-in-fact for the Holders of [UPPER DECS] [STRIPPED DECS] from time to
time, that the holder of the Securities listed below (the "Holder") has elected
to substitute $_____ [aggregate principal amount of Treasury Securities]
[aggregate principal amount of Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] in exchange for an
equal Value of [Pledged Notes or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities]
held by you in accordance with the Pledge Agreement and has delivered to us a
notice stating that the Holder has Transferred [Treasury Securities] [Notes or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] to you, as Collateral Agent. We hereby instruct you, upon receipt
of such [Pledged Treasury Securities] [Pledged Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,],
and upon the payment by such Holder of any applicable fees, to release the
[Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to such [Upper
DECS] [Stripped DECS] to us in accordance with the Holder's instructions.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date:_____________ Bank One Trust Company, National Association
By:_________________________________
Name:
Title:
Signature Guarantee:___________________
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Notes or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be,] for the [Pledged Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] [Pledged Treasury Securities]:
- --------------------------- ----------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- ---------------------------
Address
- ---------------------------
32
EXHIBIT B
INSTRUCTION TO FORWARD PURCHASE CONTRACT AGENT
Bank One Trust Company, National Association
Re: UPPER DECS of Cendant Corporation (the "Company")
---------------------------------------------------
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent, [$_______ aggregate
principal amount of Treasury Securities] [$_____aggregate principal amount of
Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, the case may be,] in exchange for an equal Value of [Pledged Notes or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] [Pledged Treasury Securities] held by the Collateral Agent, in
accordance with Section [4.1][4.2] of the Pledge Agreement, dated July 27, 2001
(the "Pledge Agreement"), among you, the Company and the Collateral Agent. The
undersigned Holder has paid the Collateral Agent all applicable fees relating to
such exchange. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio] [Pledged Treasury Securities] related to such [Upper DECS] [Stripped
DECS]. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
Dated:_____________ _________________________
Signature
Signature Guarantee:________________
Please print name and address of Registered Holder:
- --------------------------- ----------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- ---------------------------
Address
- ---------------------------
- ---------------------------
33
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
The Chase Manhattan Bank
Re: Notes of Cendant Corporation (the "Company")
----------------------------------------------
The undersigned hereby notifies you in accordance with Section
4.6(c) of the Pledge Agreement, dated as of July 27, 2001 (the "Pledge
Agreement"), among the Company, yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent, and Bank One Trust Company, National
Association, as Forward Purchase Contract Agent and as attorney-in-fact for the
Holders of Upper DECS and Stripped DECS from time to time, that the undersigned
elects to deliver $ aggregate principal amount of Notes for delivery to the
Remarketing Agent on the Business Day immediately preceding the [Initial
Remarketing Date] [Secondary Remarketing Date] for remarketing pursuant to
Section 4.6(c) of the Pledge Agreement. The undersigned will, upon request of
the Remarketing Agent, execute and deliver any additional documents deemed by
the Remarketing Agent or by the Company to be necessary or desirable to complete
the sale, assignment and transfer of the Notes tendered hereby.
The undersigned hereby instructs you, upon receipt of the
Proceeds of such remarketing from the Remarketing Agent to deliver such Proceeds
to the undersigned in accordance with the instructions indicated herein under
"A. Payment Instructions". The undersigned hereby instructs you, in the event of
Failed [Initial] [Secondary] Remarketing, upon receipt of the Notes tendered
herewith from the Remarketing Agent, to be delivered to the person(s) and the
address(es) indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and
warrants that the undersigned has full power and authority to tender, sell,
assign and transfer the Notes tendered hereby and that the undersigned is the
record owner of any Notes tendered herewith in physical form or a participant in
The Depositary Trust Company ("DTC") and the beneficial owner of any Notes
tendered herewith by book-entry transfer to your account at DTC and (ii) agrees
to be bound by the terms and conditions of Section 4.6(c) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
Date:_____________
------------------------------------
By:_________________________________
Name:
Title:
Signature Guarantee:________________
- --------------------------- ----------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- ---------------------------
Address
- ---------------------------
- ---------------------------
34
- --------------------------------------------------------------------------------
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 remarketing, Notes which are in physical form should be
delivered to the person(s) set forth below and mailed to the address set forth
below.
Name(s)
- --------------------------------------------------------------------------------
(Please Print)
Address
(Please Print)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Zip Code)
35
- --------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
In the event of a failed remarketing, Notes which are in book-entry form should
be credited to the account at The Depositary Trust Company set forth below.
------------------
DTC Account Number
Name of Account Party:_________________________________
36
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Chase Manhattan Bank
Re: Cendant Corporation (the "Company")
--------------------------------------
The undersigned hereby notifies you in accordance with Section
4.6(c) of the Pledge Agreement, dated as of July 27, 2001 (the "Pledge
Agreement"), among the Company, yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent, and Bank One Trust Company, National
Association, as Forward Purchase Contract Agent and as attorney-in-fact for the
Holders of Upper DECS and Stripped DECS from time to time, that the undersigned
elects to withdraw the $_____ aggregate principal amount of Notes delivered to
the Custodial Agent on ___, 2001 for remarketing pursuant to Section 4.6(c) of
the Pledge Agreement. The undersigned hereby instructs you to return such Notes
to the undersigned in accordance with the undersigned's instructions. With this
notice, the Undersigned hereby agrees to be bound by the terms and conditions of
Section 4.6(c) of the Pledge Agreement. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Date:_____________
------------------------------------
By:_________________________________
Name:
Title:
Signature Guarantee:___________________
- --------------------------- ----------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- ---------------------------
Address
- ---------------------------
- ---------------------------