SEMPRA ENERGY
and
U.S. BANK TRUST NATIONAL ASSOCIATION, as Collateral Agent, Custodial Agent and
Securities Intermediary
and
U.S. BANK TRUST NATIONAL ASSOCIATION, as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of April 30, 2002
TABLE OF CONTENTS
PAGE
----
ARTICLE I
Definitions
Section 1.01. Definitions.............................................................. 1
ARTICLE II
Pledge
Section 2.01. Pledge................................................................... 5
Section 2.02. Control; Financing Statement............................................. 6
Section 2.03. Termination.............................................................. 6
ARTICLE III
Distributions on Pledged Collateral
Section 3.01. Income Distributions..................................................... 6
Section 3.02. Principal Payments Following Termination Event........................... 6
Section 3.03. Principal Payments Prior to or on Purchase Contract Settlement Date...... 7
Section 3.04. Payments to Purchase Contract Agent...................................... 7
Section 3.05. Assets Not Properly Released............................................. 7
ARTICLE IV
Control
Section 4.01. Establishment of Collateral Account...................................... 8
Section 4.02. Treatment as Financial Assets............................................ 8
Section 4.03. Sole Control by Collateral Agent......................................... 8
Section 4.04. Securities Intermediary's Location....................................... 8
Section 4.05. No Other Claims.......................................................... 8
Section 4.06. Investment and Release................................................... 9
Section 4.07. Statements and Confirmations............................................. 9
Section 4.08. Tax Allocations.......................................................... 9
Section 4.09. No Other Agreements...................................................... 9
Section 4.10. Powers Coupled with an Interest.......................................... 9
i
ARTICLE V
Initial Deposit; Establishment of Growth Equity Units and Reestablishment of
Income Equity Units
Section 5.01. Initial Deposit of Notes................................................ 9
Section 5.02. Establishment of Growth Equity Units.................................... 10
Section 5.03. Reestablishment of Income Equity Units.................................. 11
Section 5.04. Termination Event....................................................... 12
Section 5.05. Cash Settlement......................................................... 14
Section 5.06. Early Settlement........................................................ 15
Section 5.07. Application of Proceeds in Settlement of Purchase Contracts............. 16
Section 5.08. Tax Event Redemption.................................................... 17
ARTICLE VI
Voting Rights - Pledged Notes
Section 6.01. Voting Rights........................................................... 18
ARTICLE VII
Rights and Remedies
Section 7.01. Rights and Remedies of the Collateral Agent............................. 18
Section 7.02. Tax Event Redemption.................................................... 19
Section 7.03. Initial Remarketing and Secondary Remarketing........................... 20
Section 7.04. Substitutions........................................................... 21
ARTICLE VIII
Representations and Warranties; Covenants
Section 8.01. Representations and Warranties.......................................... 21
Section 8.02. Covenants............................................................... 21
ARTICLE IX
The Collateral Agent, the Custodial Agent and the Securities Intermediary
Section 9.01. Appointment, Powers and Immunities...................................... 22
Section 9.02. Instructions of the Company............................................. 23
Section 9.03. Reliance by Collateral Agent and Securities Intermediary................ 23
Section 9.04. Rights in Other Capacities.............................................. 23
Section 9.05. Non-Reliance on Collateral Agent, the Custodial Agent and Securities
Intermediary............................................................ 24
Section 9.06. Compensation and Indemnity.............................................. 24
Section 9.07. Failure to Act.......................................................... 25
ii
Section 9.08. Resignation of Collateral Agent, the Custodial Agent and Securities
Intermediary............................................................ 25
Section 9.09. Right to Appoint Agent or Advisor....................................... 26
Section 9.10. Survival................................................................ 27
Section 9.11. Exculpation............................................................. 27
ARTICLE X
Amendment
Section 10.01. Amendment Without Consent of Holders................................... 27
Section 10.02. Amendment with Consent of Holders...................................... 27
Section 10.03. Execution of Amendments................................................ 28
Section 10.04. Effect of Amendments................................................... 28
Section 10.05. Reference of Amendments................................................ 29
ARTICLE XI
Miscellaneous
Section 11.01. No Waiver.............................................................. 29
Section 11.02. Governing Law; Submission to Jurisdiction.............................. 29
Section 11.03. Notices................................................................ 29
Section 11.04. Successors and Assigns................................................. 30
Section 11.05. Counterparts........................................................... 30
Section 11.06. Severability........................................................... 30
Section 11.07. Expenses, Etc.......................................................... 30
Section 11.08. Security Interest Absolute............................................. 31
Section 11.09. Notice of Tax Event, Tax Event Redemption and Termination Event........ 31
Exhibit A - Instruction from Purchase Contract Agent to Collateral Agent
(Establishment of Growth Equity Units)
Exhibit B - Instruction from Collateral Agent to Securities Intermediary
(Establishment of Growth Equity Units)
Exhibit C - Instruction from Purchase Contract Agent to Collateral Agent
(Reestablishment of Income Equity Units)
Exhibit D - Instruction from Collateral Agent to Securities Intermediary
(Reestablishment of Income Equity Units)
Exhibit E - Notice of Cash Settlement from Securities Intermediary to Purchase
Contract Agent (Cash Settlement Amounts)
iii
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of April 30, 2002, among Sempra Energy, a
California corporation (the "COMPANY"), U.S. Bank Trust National Association, a
national banking association, 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 with respect to the
Collateral Account (in such capacity, together with its successors in such
capacity, the "SECURITIES INTERMEDIARY"), and U.S. Bank Trust National
Association, a national banking association, as purchase contract agent and as
attorney-in-fact of the Holders from time to time of the Securities (as defined
in the Purchase Contract Agreement) (in such capacity, together with its
successors in such capacity, the "PURCHASE CONTRACT AGENT") under the Purchase
Contract Agreement.
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement dated as of the date hereof (as modified and supplemented and
in effect from time to time, the "PURCHASE CONTRACT AGREEMENT"), pursuant to
which 22,000,000 Income Equity Units (as defined herein) will be issued
(24,000,000 Income Equity Units if the over-allotment option granted in the
Purchase Agreement (as defined herein) is exercised in full).
Each Income Equity Unit, at issuance, consists of a unit comprised of (a) a
stock purchase contract (a "PURCHASE CONTRACT") under which the Holder will
purchase from the Company on the Purchase Contract Settlement Date, for an
amount equal to $25 (the "STATED AMOUNT"), a number of shares of Sempra Energy
common stock, no par value ("COMMON STOCK"), equal to the Settlement Rate and
(b) either beneficial ownership of a Note (as defined below) or an Applicable
Ownership Interest in the Treasury Portfolio (as defined below).
Pursuant to the terms of the Purchase Contract Agreement and the Purchase
Contracts, the Holders of the Securities have irrevocably authorized the
Purchase Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such Holders and to
grant the pledge provided herein of the Collateral (as defined herein) to secure
the Obligations (as defined herein).
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own
behalf in its capacity as Purchase Contract Agent and as attorney-in-fact of the
Holders from time to time of the Securities, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the 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, Exhibit or other subdivision;
(c) the following terms which are defined in the UCC shall have the
meanings set forth therein: "CERTIFICATED SECURITY," "CONTROL," "FINANCIAL
ASSET," "ENTITLEMENT ORDER," "SECURITIES ACCOUNT" and "SECURITY ENTITLEMENT";
(d) the following terms have the meanings assigned to them in the Purchase
Contract Agreement: "ACT", "AFFILIATE", "APPLICABLE OWNERSHIP INTEREST",
"BANKRUPTCY CODE", "BOARD RESOLUTION", "BUSINESS DAY", "CASH SETTLEMENT",
"CERTIFICATE", "EARLY SETTLEMENT", "EARLY SETTLEMENT AMOUNT", "EARLY SETTLEMENT
DATE", "FAILED FINAL REMARKETING", "FAILED INITIAL REMARKETING", "FAILED
SECONDARY REMARKETING", "FINAL REMARKETING", "HOLDER", "INITIAL REMARKETING",
"INITIAL REMARKETING DATE", " NOTES", "OFFICERS' CERTIFICATE", "OPINION OF
COUNSEL", "OUTSTANDING SECURITIES", "PURCHASE CONTRACT", "PURCHASE CONTRACT
SETTLEMENT DATE", "PURCHASE AGREEMENT", "PURCHASE PRICE", "QUOTATION AGENT",
"REDEMPTION AMOUNT", "REMARKETING AGENT", "REMARKETING AGREEMENT", "REMARKETING
FEE", "SECONDARY REMARKETING", "SECONDARY REMARKETING DATE", "SECURITY",
"SETTLEMENT RATE", "SUCCESSFUL INITIAL REMARKETING", "SUCCESSFUL SECONDARY
REMARKETING", "TAX EVENT", "TAX EVENT REDEMPTION", "TAX EVENT REDEMPTION DATE",
"TERMINATION EVENT", "TREASURY PORTFOLIO" and "TREASURY PORTFOLIO PURCHASE
PRICE"; and
(e) the following terms have the meanings given to them in this Section
1.01(e):
"AGREEMENT" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time.
"CASH" means any coin or currency of the United States as at the time shall
be legal tender for payment of public and private debts.
"COLLATERAL" means the collective reference to:
(i) all investment property and other financial assets from time to
time credited to the Collateral Account, including, without limitation, (A)
the Notes and security entitlements relating thereto that are a component
of the Income Equity Units from time to time, (B) the Applicable Ownership
Interests (as specified in Clause (A) of the definition of such term) of
the Holders with respect to the Treasury Portfolio which are a component of
the Income Equity Units from time to time; (C) any Treasury Securities and
security entitlements relating thereto delivered from time to time upon
establishment of Growth Equity Units in accordance with Section 5.02 hereof
and (E) payments made by Holders pursuant to Section 5.05 hereof;
(ii) all Proceeds of any of the foregoing (whether such Proceeds arise
before or after the commencement of any proceeding under any applicable
bankruptcy, insolvency or other similar law, by or against the pledgor or
with respect to the pledgor); and
(iii) all powers and rights now owned or hereafter acquired under or
with respect to the Collateral.
"COLLATERAL ACCOUNT" means the securities account of U.S. Bank Trust
National Association, as Collateral Agent, maintained by the Securities
Intermediary and designated "U.S. Bank Trust National Association, as Collateral
Agent of Sempra Energy, as pledgee of U.S. Bank Trust National Association, as
the Purchase Contract Agent on behalf of and as attorney-in-fact for the
Holders".
"COMPANY" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such pursuant to the
applicable provisions of the Purchase Contract Agreement, and thereafter
"Company" shall mean such successor.
"GROWTH EQUITY UNITS" means, following the substitution of Treasury
Securities for Notes as collateral to secure a Holder's obligations under the
Purchase Contract, the collective rights and obligations of a Holder of a Growth
Equity Units Certificate in respect of such Treasury Securities, subject to the
Pledge thereof, and the related Purchase Contract.
"GROWTH EQUITY UNITS CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth Equity Units
specified on such certificate.
"INCOME EQUITY UNITS" means the collective rights and obligations of a
Holder of an Income Equity Units Certificate in respect of a Note or an
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, subject in each case to the Pledge thereof, and the related Purchase
Contract; provided that the appropriate Applicable Ownership Interest (as
specified in clause (B) of the definition of such term) of the Treasury
Portfolio shall not be subject to the Pledge.
"INCOME EQUITY UNITS CERTIFICATE" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Income Equity
Units specified on such certificate.
"OBLIGATIONS" means, with respect to each Holder, the collective reference
to all obligations and liabilities of such Holder under such Holder's Purchase
Contract, the Purchase Contract Agreement and this Agreement or any other
document made, delivered or given in connection herewith or therewith, in each
case whether on account of principal, interest (including, without limitation,
interest accruing before and after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to such Holder, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Company or the Collateral Agent or the Securities Intermediary that are required
to be paid by the Holder pursuant to the terms of any of the foregoing
agreements).
"PERMITTED INVESTMENTS" means any one of the following which shall mature
not later than the next succeeding Business Day:
(1) any evidence of indebtedness with an original maturity of 365 days
or less issued, or directly and fully guaranteed or insured, by the United
States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in
support of the timely payment thereof or such indebtedness constitutes a
general obligation of it);
(2) deposits, certificates of deposit or acceptances with an original
maturity of 365 days or less of any institution which is a member of the
Federal Reserve System having combined capital and surplus and undivided
profits of not less than $200.0 million at the time of deposit (and which
may include the Collateral Agent);
(3) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to
in clause (2);
(4) repurchase agreements and reverse repurchase agreements relating
to marketable direct obligations issued or unconditionally guaranteed by
the United States Government or issued by any agency thereof and backed as
to timely payment by the full faith and credit of the United States
Government;
(5) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated
under the laws of the United States or any State thereof, which commercial
paper has a rating at the time of purchase at least equal to "A-1" by
Standard & Poor's Ratings Services ("S&P") or at least equal to "P-1" by
Moody's Investors Service, Inc. ("MOODY'S"); and
(6) investments in money market funds (including, but not limited to,
money market funds managed by the Collateral Agent or an affiliate of the
Collateral Agent) registered under the Investment Company Act of 1940, as
amended, rated in the highest applicable rating category by S&P or Moody's.
"PERSON" means any legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"PLEDGE" means the lien and security interest created by this Agreement.
"PLEDGED APPLICABLE OWNERSHIP INTERESTS" means the Applicable Ownership
Interests (as specified in clause (A) of the definition thereof) of the Holders
with respect to the Treasury Portfolio from time to time credited to the
Collateral Account and not then released from the Pledge.
"PLEDGED NOTES" means Notes and security entitlements with respect thereto
from time to time credited to the Collateral Account and not then released from
the Pledge.
"PLEDGED SECURITIES" means the Pledged Notes, the Pledged Applicable
Ownership Interest or the Pledged Treasury Securities, collectively.
"PLEDGED TREASURY SECURITIES" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.
"PROCEEDS" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, cash, instruments, securities,
financial assets (as defined in (S)8-102(a)(9) of the UCC) and other property
received, receivable or otherwise distributed upon the sale, exchange,
collection or disposition of any financial assets from time to time held in the
Collateral Account.
"PURCHASE CONTRACT AGENT" has the meaning specified in the paragraph
preceding the recitals of this Agreement.
"SEPARATE NOTES" means Notes which are not components of Income Equity
Units.
"TRADES" means the Treasury/Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.
"TRADES REGULATIONS" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations are
used herein as therein defined.
"TRANSFER" means in the case of certificated securities in registered form,
delivery as provided in (S)8-301(a) of the UCC, indorsed to the transferee or in
blank by an effective endorsement; in the case of Treasury Securities,
registration of the transferee as the owner of such Treasury Securities on
TRADES; and in the case of security entitlements, including, without limitation,
security entitlements with respect to Treasury Securities, a securities
intermediary indicating by book entry that such security entitlement has been
credited to the transferee's securities account.
"TREASURY SECURITIES" means zero-coupon U.S. treasury securities (CUSIP No.
912803AD5) which mature on May 16, 2005.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York from time to time.
"VALUE" means, with respect to any item of Collateral on any date, as to
(1) Cash, the face amount thereof, (2) Treasury Securities or Notes, the
aggregate principal amount thereof at maturity and (3) Applicable Ownership
Interest, the appropriate percentage (as specified in clause (A) of the
definition of such term) of the aggregate principal amount at maturity of the
Treasury Portfolio.
ARTICLE II
PLEDGE
Section 2.01. Pledge. Each Holder, acting through the Purchase Contract
Agent as such Holder's attorney-in-fact, and the Purchase Contract Agent, acting
as such attorney-in-fact,
hereby pledges and grants to the Collateral Agent, as agent of and for the
benefit of the Company, a continuing first priority security interest in and to,
and a lien upon and right of set-off against, all of such Person's right, title
and interest in and to the Collateral to secure the prompt and complete payment
and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Obligations. The Collateral Agent shall have all of the
rights, remedies and recourses with respect to the Collateral afforded a secured
party by the UCC, in addition to, and not in limitation of, the other rights,
remedies and recourses afforded to the Collateral Agent by this Agreement.
Section 2.02. Control; Financing Statement.
(a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of Article 4 of this Agreement.
(b) Subsequent to the date of initial issuance of the Securities, the
Purchase Contract Agent shall deliver to the Collateral Agent a copy of the
financing statement prepared by the Company and filed in the Office of the
Secretary of State of the State of New York and any other jurisdictions which
the Company deems necessary, authorized by the Purchase Contract Agent, as
attorney-in-fact for the Holders, as Debtors, and describing the Collateral,
such filing to be undertaken by the Company.
Section 2.03. Termination. As to each Holder, this Agreement and the
Pledge created hereby shall terminate upon the satisfaction of such Holder's
Obligations. Upon such termination, the Collateral Agent shall Transfer such
Holder's portion of the Collateral to the Purchase Contract Agent for
distribution to such Holder in accordance with his interest, free and clear of
any lien, pledge or security interest created hereby.
ARTICLE III
DISTRIBUTIONS ON PLEDGED COLLATERAL
Section 3.01. Income Distributions. All income distributions received
by the Collateral Agent on account of the Pledged Notes, the Pledged Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio or Permitted Investments from time to time held in the
Collateral Account shall be distributed to the Purchase Contract Agent (ABA No.
091 000 022, A/C No. 77095011, Re: Sempra Energy) for the benefit of the
applicable Holders as provided in the Purchase Contracts or Purchase Contract
Agreement.
Section 3.02. Principal Payments Following Termination Event. All
payments received by the Collateral Agent following a Termination Event of (1)
the aggregate principal amount of the Pledged Notes or securities entitlements
thereto, or (2) the Applicable Ownership Interests (as specified in clause (A)
of the definition thereof) of the aggregate principal amount of the Treasury
Portfolio, or (3) the principal amount of the Pledged Treasury Securities, shall
be distributed to the Purchase Contract Agent for the benefit of the applicable
Holders for distribution to such Holders in accordance with their respective
interests.
* Denotes a big black dot.
Section 3.03. Principal Payments Prior to or on Purchase Contract
Settlement Date.
(a) Subject to the provisions of Sections 5.06, 5.08 and 7.03, and except
as provided in clause 3.03(b) below, if no Termination Event shall have
occurred, all payments received by the Collateral Agent of (1) the aggregate
principal amount with respect to the Pledged Notes or security entitlements with
respect thereto, (2) the Applicable Ownership Interests (as specified in clause
(A) of the definition thereof) of the aggregate principal amount of the Treasury
Portfolio or (3) the principal amount of Pledged Treasury Securities, shall be
held and invested in Permitted Investments until the Purchase Contract
Settlement Date and on the Purchase Contract Settlement Date distributed to the
Company as provided in Section 5.07 hereof. Any balance remaining in the
Collateral Account shall be distributed to the Purchase Contract Agent for the
benefit of the applicable Holders for distribution to such Holders in accordance
with their respective interests. The Company shall instruct the Collateral Agent
as to the type of Permitted Investments in which any payments made under this
Section shall be invested, provided, however, that if the Company fails to
deliver such instructions by 10:30 a.m. (New York City time), the Collateral
Agent shall invest such payments in the Permitted Investments described in
clause (6) of the definition of Permitted Investments.
(b) All payments received by the Collateral Agent of (1) the aggregate
principal amount with respect to the Pledged Notes or security entitlements with
respect thereto, (2) the aggregate principal amount of the Applicable Ownership
Interests (as specified in clause (A) of the definition thereof) of the Treasury
Portfolio, or (3) the principal amount of Treasury Securities or security
entitlements with respect thereto, that, in each case, have been released from
the Pledge shall be distributed to the Purchase Contract Agent for the benefit
of the applicable Holders for distribution to such Holders in accordance with
their respective interests.
Section 3.04. Payments to Purchase Contract Agent. The Collateral Agent
shall use all commercially reasonable efforts to deliver payments to the
Purchase Contract Agent hereunder to the account designated by the Purchase
Contract Agent for such purpose not later than 12:00 p.m. (New York City time)
on the Business Day such payment is received by the Collateral Agent; provided,
however, that if such payment is received on a day that is not a Business Day or
after 11:00 a.m. (New York City time) on a Business Day, then the Collateral
Agent shall use all commercially reasonable efforts to deliver such payment no
later than 10:30 a.m. (New York City time) on the next succeeding Business Day.
Section 3.05. Assets Not Properly Released. If the Purchase Contract Agent
or any Holder shall receive any principal payments on account of financial
assets credited to the Collateral Account and not released therefrom in
accordance with this Agreement, the Purchase Contract Agent or such Holder shall
hold the same as trustee of an express trust for the benefit of the Company and,
upon receipt of an Officers' Certificate of the Company so directing, promptly
deliver the same to the Collateral Agent for credit to the Collateral Account or
to the Company for application to the Obligations of the Holders, and the
Purchase Contract Agent and Holders shall acquire no right, title or interest in
any such payments of principal amounts so received.
ARTICLE IV
CONTROL
Section 4.01. Establishment of Collateral Account. The Securities
Intermediary hereby confirms that:
(a) the Securities Intermediary has established the Collateral Account;
(b) the Collateral Account is a securities account;
(c) subject to the terms of this Agreement, the Securities Intermediary
shall identify in its records the Collateral Agent as the entitlement holder
entitled to exercise the rights that comprise any financial asset credited to
the Collateral Account;
(d) all property delivered to the Securities Intermediary pursuant to this
Agreement or the Purchase Contract Agreement will be credited promptly to the
Collateral Account;
(e) all securities or other property underlying any financial assets
credited to the Collateral Account shall be registered in the name of the
Purchase Contract Agent and indorsed to the Collateral Agent or in blank,
registered in the name of the Collateral Agent or credited to another securities
account maintained in the name of the Collateral Account.
Section 4.02. Treatment as Financial Assets. Each item of property
(whether investment property, financial asset, security, instrument or cash)
credited to the Collateral Account shall be treated as a financial asset.
Section 4.03. Sole Control by Collateral Agent. Except as provided in
Section 6.01, at all times prior to the termination of the Pledge, the
Collateral Agent shall have sole control of the Collateral Account, and the
Securities Intermediary shall take instructions and directions with respect to
the Collateral Account solely from the Collateral Agent. If at any time the
Securities Intermediary shall receive an entitlement order issued by the
Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Purchase Contract Agent or any Holder or any other Person. Until termination
of the Pledge, the Securities Intermediary will not comply with any entitlement
orders issued by the Purchase Contract Agent or any Holder.
Section 4.04. Securities Intermediary's Location. The Collateral
Account, and the rights and obligations of the Securities Intermediary, the
Collateral Agent, the Purchase Contract Agent and the Holders with respect
thereto, shall be governed by the laws of the State of New York. Regardless of
any provision in any other agreement, for purposes of the UCC, New York shall be
deemed to be the Securities Intermediary's location.
Section 4.05. No Other Claims. Except for the claims and interest of
the Collateral Agent and of the Purchase Contract Agent and the Holders in the
Collateral Account, the Securities Intermediary (without making any
investigation) does not know of any claim to, or interest in, the Collateral
Account or in any financial asset credited thereto. If any Person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of
attachment, execution or similar process) against the Collateral Account or in
any financial asset carried therein, the Securities Intermediary will promptly
notify the Collateral Agent and the Purchase Contract Agent.
Section 4.06. Investment and Release. All proceeds of financial assets
from time to time deposited in the Collateral Account shall be invested and
reinvested as provided in this Agreement. At all times prior to termination of
the Pledge, no property shall be released from the Collateral Account except in
accordance with this Agreement or upon written instructions of the Collateral
Agent.
Section 4.07. Statements and Confirmations. The Securities Intermediary
will promptly send copies of all statements, confirmations and other
correspondence concerning the Collateral Account and any financial assets
credited thereto simultaneously to each of the Purchase Contract Agent and the
Collateral Agent at their addresses for notices under this Agreement.
Section 4.08. Tax Allocations. The Purchase Contract Agent shall file
with the Internal Revenue Service and deliver to the Holders Forms 1099 (or
successor or comparable forms), to the extent required by law, with respect to
payments received by the Holders. Neither the Securities Intermediary nor the
Collateral Agent shall have any tax reporting duties hereunder.
Section 4.09. No Other Agreements. The Securities Intermediary has not
entered into, and prior to the termination of the Pledge will not enter into,
any agreement with any other Person relating to the Collateral Account or any
financial assets credited thereto, including, without limitation, any agreement
to comply with entitlement orders of any Person other than the Collateral Agent.
Section 4.10. Powers Coupled with an Interest. The rights and powers
granted in this Article 4 to the Collateral Agent have been granted in order to
perfect its security interests in the Collateral Account, are powers coupled
with an interest and will be affected neither by the bankruptcy of the Purchase
Contract Agent or any Holder nor by the lapse of time. The obligations of the
Securities Intermediary under this Article 4 shall continue in effect until the
termination of the Pledge.
ARTICLE V
INITIAL DEPOSIT; ESTABLISHMENT OF GROWTH EQUITY UNITS AND
REESTABLISHMENT OF INCOME EQUITY UNITS
Section 5.01. Initial Deposit of Notes. (a) Prior to or concurrently with
the execution and delivery of this Agreement, the Purchase Contract Agent, on
behalf of the initial Holders of the Income Equity Units, shall Transfer to the
Collateral Agent, for credit to the Collateral Account, the Notes or security
entitlements relating thereto, and, in the case of security entitlements, the
Securities Intermediary shall indicate by book-entry that a securities
entitlement to such Notes has been credited to the Collateral Account.
(b) Prior to any Event of Default, the Collateral Agent agrees to hold any
Notes or security interests relating thereto, constituting a portion of the
Collateral registered in the name of the Purchase Contract Agent with
appropriate indorsement in the form delivered to it and shall
not re-register such Notes or security interests relating thereto prior to an
Event of Default.
Section 5.02. Establishment of Growth Equity Units.
(a) So long as the Treasury Portfolio has not replaced the Notes as a
component of the Income Equity Units as a result of a Successful Initial
Remarketing, a Successful Secondary Remarketing or a Tax Event Redemption, at
any time prior to or on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, a Holder of Income Equity Units shall have
the right to establish or reestablish Growth Equity Units by substitution of
Treasury Securities or security entitlements with respect thereto for the
Pledged Notes comprising a part of such Holder's Income Equity Units in integral
multiples of 40 Income Equity Units by:
(i) Transferring to the Collateral Agent for credit to the Collateral
Account Treasury Securities or security entitlements with respect thereto
having a Value equal to the aggregate principal amount of the Pledged Notes
to be released, accompanied by a notice, substantially in the form of
Exhibit C to the Purchase Contract Agreement, whereupon the Purchase
Contract Agent shall deliver to the Collateral Agent a notice,
substantially in the form of Exhibit A hereto, (A) stating that such Holder
has Transferred Treasury Securities or security entitlements with respect
thereto to the Collateral Agent for credit to the Collateral Account, (B)
stating the Value of the Treasury Securities or security entitlements with
respect thereto Transferred by such Holder and (C) requesting that the
Collateral Agent release from the Pledge the Pledged Notes that are a
component of such Income Equity Units; and
(ii) delivering the related Income Equity Units to the Purchase
Contract Agent.
Upon receipt of such notice and confirmation that Treasury Securities or
security entitlements with respect thereto have been credited to the Collateral
Account as described in such notice, the Collateral Agent shall instruct the
Securities Intermediary by a notice, substantially in the form of Exhibit B
hereto, to release such Pledged Notes from the Pledge by Transfer to the
Purchase Contract Agent for distribution to such Holder, free and clear of any
lien, pledge or security interest created hereby.
(b) If the Treasury Portfolio has replaced the Notes as a component of the
Income Equity Units as a result of a Successful Initial Remarketing, a
Successful Secondary Remarketing or a Tax Event Redemption, at any time prior to
or on the second Business Day immediately preceding the Purchase Contract
Settlement Date, a Holder of Income Equity Units shall have the right to
establish or reestablish Growth Equity Units by substitution of Treasury
Securities or security entitlements with respect thereto for the Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio comprising a part of such Holder's Income Equity Units
in integral multiples of 20,000 Income Equity Units by:
(i) Transferring to the Collateral Agent for credit to the Collateral
Account Treasury Securities or security entitlements with respect thereto
having a Value equal to the Value of the Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio to be released, accompanied by a
notice, substantially in the form of Exhibit C to the Purchase Contract
Agreement, whereupon the Purchase Contract Agent shall deliver to the
Collateral Agent a notice, substantially in the form of Exhibit A hereto,
(A) stating that such Holder has Transferred Treasury Securities or
security entitlements with respect thereto to the Collateral Agent for
credit to the Collateral Account, (B) stating the Value of the Treasury
Securities or security entitlements with respect thereto Transferred by
such Holder and (C) requesting that the Collateral Agent release from the
Pledge the Pledged Applicable Ownership Interests that are a component of
such Income Equity Units; and
(ii) delivering the related Income Equity Units to the Purchase
Contract Agent.
Upon receipt of such notice and confirmation that Treasury Securities or
security entitlements with respect thereto have been credited to the Collateral
Account as described in such notice, the Collateral Agent shall instruct the
Securities Intermediary by a notice, substantially in the form of Exhibit B
hereto, to release such Pledged Applicable Ownership Interests from the Pledge
by Transfer to the Purchase Contract Agent for distribution to such Holder, free
and clear of any lien, pledge or security interest created hereby.
(c) Upon credit to the Collateral Account of Treasury Securities or
security entitlements with respect thereto delivered by a Holder of Income
Equity Units and receipt of the related instruction from the Collateral Agent,
the Securities Intermediary shall release such Pledged Applicable Ownership
Interests and shall promptly transfer the same to the Purchase Contract Agent
for distribution to such Holder, free and clear of any lien, pledge or security
interest created hereby.
Section 5.03. Reestablishment of Income Equity Units.
(a) So long as the Treasury Portfolio has not replaced the Notes as a
component of the Income Equity Units as a result of a Successful Initial
Remarketing, a Successful Secondary Remarketing or a Tax Event Redemption, at
any time on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, a Holder of Growth Equity Units shall have
the right to reestablish Income Equity Units by substitution of Notes or
security entitlements with respect thereto for Pledged Treasury Securities in
integral multiples of 40 Growth Equity Units by:
(i) Transferring to the Collateral Agent for credit to the Collateral
Account Notes or security entitlements with respect thereto having a
principal amount equal to the Value of the Pledged Treasury Securities to
be released, accompanied by a notice, substantially in the form of Exhibit
C to the Purchase Contract Agreement, whereupon the Purchase Contract Agent
shall deliver to the Collateral Agent a notice, substantially in the form
of Exhibit C hereto, stating that such Holder has Transferred the Notes or
security entitlements with respect thereto to the Collateral Account for
credit to the Collateral Account and requesting that the Collateral Agent
release from the Pledge the Pledged Treasury Securities related to such
Growth Equity Units; and
(ii) delivering the related Growth Equity Units to the Purchase
Contract
Agent.
Upon receipt of such notice and confirmation that Notes or security
entitlements with respect thereto have been credited to the Collateral Account
as described in such notice, the Collateral Agent shall instruct the Securities
Intermediary by a notice in the form provided in Exhibit D hereto to release
such Pledged Treasury Securities from the Pledge by Transfer to the Purchase
Contract Agent for distribution to such Holder, free and clear of any lien,
pledge or security interest created hereby.
(b) If the Treasury Portfolio has replaced the Notes as a component of the
Income Equity Units as a result of a Successful Initial Remarketing, a
Successful Secondary Remarketing or a Tax Event Redemption, at any time prior to
or on the second Business Day immediately preceding the Purchase Contract
Settlement Date, a holder of a Growth Equity Unit shall have the right to
reestablish an Income Equity Unit by substitution of Treasury Securities or
security entitlements with respect thereto for the Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio comprising a part of such Holder's Growth Equity Units in
integral multiples of 20,000 Growth Equity Units by:
(i) Transferring to the Collateral Agent for credit to the Collateral
Account Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio having a Value equal to
the Treasury Securities or security entitlements with respect thereto to be
released, accompanied by a notice, substantially in the form of Exhibit C
to the Purchase Contract Agreement, whereupon the Purchase Contract Agent
shall deliver to the Collateral Agent a notice, substantially in the form
of Exhibit C hereto, (A) stating that such Holder has Transferred
Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio to the Collateral Agent
for credit to the Collateral Account, (B) stating the Value of the
Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio Transferred by such
Holder and (C) requesting that the Collateral Agent release from the Pledge
the Treasury Securities or security entitlements with respect thereto that
are a component of such Growth Equity Units; and
(ii) delivering the related Growth Equity Units to the Purchase
Contract Agent.
Upon receipt of such notice and confirmation that the Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio have been credited to the Collateral Account as described in
such notice, the Collateral Agent shall instruct the Securities Intermediary by
a notice, substantially in the form of Exhibit D hereto, to release the Treasury
Securities or security entitlements with respect thereto from the Pledge by
Transfer to the Purchase Contract Agent for distribution to such Holder, free
and clear of any lien, pledge or security interest created hereby.
Section 5.04. Termination Event.
(a) Upon receipt by the Collateral Agent of written notice from the Company
or the Purchase Contract Agent that a Termination Event has occurred, the
Collateral Agent shall
release all Collateral from the Pledge and shall promptly Transfer:
(i) any Pledged Notes or security entitlements with respect thereto
or Pledged Applicable Ownership Interests (if the Treasury Portfolio has
become a component of the Income Equity Units as a result of a Successful
Initial Remarketing, a Successful Secondary Remarketing or a Tax Event
Redemption);
(ii) any Pledged Treasury Securities, and
(iii) payments by Holders (or the Permitted Investments of such
payments) pursuant to Section 5.05 hereof,
to the Purchase Contract Agent for the benefit of the Holders for distribution
to such Holders in accordance with their respective interests, free and clear of
any lien, pledge or security interest or other interest created hereby;
provided, however, if any Holder shall be entitled to receive less than $1,000
with respect to his interest in the Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, the
Purchase Contract Agent shall have the right to dispose of such interest for
cash and deliver to such Holder cash in lieu of delivering the Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio.
(b) If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Notes, the Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, the Pledged Treasury
Securities or payments by Holders (or the Permitted Investments of such
payments) pursuant to Section 5.05 hereof, as the case may be, as provided by
this Section 5.04, the Purchase Contract Agent shall:
(i) use its best efforts to obtain an opinion of a nationally
recognized law firm reasonably acceptable to the Collateral Agent to the
effect that, as a result of the Company's being the debtor in such a
bankruptcy case, the Collateral Agent will not be prohibited from releasing
or Transferring the Collateral as provided in this Section 5.04, and shall
deliver such opinion to the Collateral Agent within ten days after the
occurrence of such Termination Event, and if (A) the Purchase Contract
Agent shall be unable to obtain such opinion within ten days after the
occurrence of such Termination Event or (B) the Collateral Agent shall
continue, after delivery of such opinion, to refuse to effectuate the
release and Transfer of all Pledged Notes, Applicable Ownership Interests
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, the Pledged Treasury Securities, the payments by Holders (or the
Permitted Investments of such payments) pursuant to Section 5.05 hereof or
the Proceeds of any of the foregoing, as the case may be, as provided in
this Section 5.04, then the Purchase Contract Agent shall within fifteen
days after the occurrence of such Termination Event commence an action or
proceeding in the court having jurisdiction of the Company's case under the
Bankruptcy Code seeking an order requiring the Collateral Agent to
effectuate the release and transfer of all Pledged Notes, Applicable
Ownership Interests (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio, the Pledged Treasury
Securities, or the payments by Holders (or the Permitted Investments of
such payments) pursuant to Section 5.05 hereof, or as the case may be, as
provided by this Section 5.04; or
(ii) commence an action or proceeding like that described in clause
5.04(b)(i) hereof within ten days after the occurrence of such Termination
Event.
Section 5.05. Cash Settlement.
(a) Upon receipt by the Collateral Agent of (1) a notice from the Purchase
Contract Agent promptly after the receipt by the Purchase Contract Agent of a
notice from a Holder of Income Equity Units or Growth Equity Units that such
Holder has elected, in accordance with the procedures specified in Section
5.02(b)(i) or (e)(i) of the Purchase Contract Agreement, respectively, to effect
a Cash Settlement and (2) payment by such Holder of Income Equity Units or
Growth Equity Units by deposit in the Collateral Account prior to 11:00 a.m.
(New York City time) on the Business Day immediately preceding the Purchase
Contract Settlement Date of the Purchase Price in lawful money of the United
States by certified or cashier's check or wire transfer of immediately available
funds payable to or upon the order of the Securities Intermediary, then the
Collateral Agent shall:
(i) instruct the Securities Intermediary promptly to invest any such
Cash in Permitted Investments;
(ii) instruct the Securities Intermediary to release from the Pledge
the Income Equity Units holder's or the Growth Equity Units holder's
related Pledged Notes, Pledged Applicable Ownership Interests, or Pledged
Treasury Securities, as applicable, as to which such Holder has effected a
Cash Settlement pursuant to this Section 5.05(a); and
(iii) instruct the Securities Intermediary to Transfer all such
Pledged Notes, Pledged Applicable Ownership Interests, or the Pledged
Treasury Securities, as the case may be, to the Purchase Contract Agent for
the benefit of such Holder, in each case free and clear of the Pledge
created hereby, for distribution to such Holder.
The Company shall instruct the Collateral Agent in writing as to the type
of Permitted Investments in which any such Cash shall be invested; provided,
however, that if the Company fails to deliver such written instructions by 10:30
a.m. (New York City time), the Collateral Agent shall invest such Cash in the
Permitted Investments described in clause (6) of the definition of Permitted
Investments.
Upon receipt of the proceeds upon the maturity of the Permitted Investments
on the Purchase Contract Settlement Date, the Collateral Agent shall (A) pay the
portion of such proceeds and deliver any certified or cashier's checks received,
in an aggregate amount equal to the Purchase Price, to the Company on the
Purchase Contract Settlement Date, and (B) release any amounts in excess of the
Purchase Price earned from such Permitted Investments to the Purchase Contract
Agent for distribution to such Holder.
(b) If a Holder of Income Equity Units (unless a Tax Event Redemption, a
Successful Initial Remarketing or a Successful Secondary Remarketing shall have
occurred) (i) fails to
notify the Purchase Contract Agent of its intention to make a Cash Settlement as
provided in paragraph 5.02(b)(i) of the Purchase Contract Agreement, such Holder
shall be deemed to have consented to the disposition of such Holder's Pledged
Notes in accordance with paragraph 5.02(b)(iii) of the Purchase Contract
Agreement or (ii) does notify the Purchase Contract Agent of its intention to
pay the Purchase Price in cash, but fails to make such payment as required by
paragraph 5.02(b)(ii) of the Purchase Contract Agreement, such Holder shall be
deemed to have consented to the disposition of such Holder's Pledged Notes in
accordance with paragraph 5.02(d) of the Purchase Contract Agreement.
(c) If a Holder of a Growth Equity Unit or a Holder of an Income Equity
Unit (if a Tax Event Redemption, a Successful Initial Remarketing or a
Successful Secondary Remarketing shall have occurred) (i) fails to notify the
Purchase Contract Agent of its intention to make a Cash Settlement as provided
in paragraph 5.02(e)(i) of the Purchase Contract Agreement or (ii) does notify
the Purchase Contract Agent as provided in paragraph 5.02(e)(i) of the Purchase
Contract Agreement of its intention to pay the Purchase Price in cash, but fails
to make such payment as required by paragraph 5.02(e)(ii) of the Purchase
Contract Agreement, such Holder shall be deemed to have elected to pay the
Purchase Price in accordance with paragraph 5.02(e)(iii) of the Purchase
Contract Agreement.
(d) As soon as practicable after 11:00 a.m. (New York City time) on the
Business Day immediately preceding the Purchase Contract Settlement Date, the
Collateral Agent shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit E hereto, stating (i) the amount of cash
that it has received with respect to the Cash Settlement of Income Equity Units
and (ii) the amount of Cash that it has received with respect to the Cash
Settlement of Growth Equity Units.
Section 5.06. Early Settlement. Upon receipt by the Collateral Agent of a
notice from the Purchase Contract Agent that a Holder of Securities has elected
to effect Early Settlement of its obligations under the Purchase Contracts
forming a part of such Securities in accordance with the terms of the Purchase
Contracts and Section 5.07 or Section 5.04(b)(2) of the Purchase Contract
Agreement (which notice shall set forth the number of such Purchase Contracts as
to which such Holder has elected to effect Early Settlement), and that the
Purchase Contract Agent has received from such Holder, and paid to the Company
as confirmed in writing by the Company, the related Early Settlement Amounts or
Purchase Price (if such Early Settlement is pursuant to Section 5.04(b)(2) of
the Purchase Contract Agreement) pursuant to the terms of the Purchase Contracts
and the Purchase Contract Agreement and that all conditions to such Early
Settlement have been satisfied, then the Collateral Agent shall release from the
Pledge, (1) Pledged Notes or the appropriate Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio in the case of a Holder of Income Equity Units or (2) Pledged Treasury
Securities, in the case of a Holder of Growth Equity Units, in each case with a
Value equal to the product of (x) the Stated Amount times (y) the number of
Purchase Contracts as to which such Holder has elected to effect Early
Settlement, and shall instruct the Securities Intermediary to Transfer all such
Pledged Applicable Ownership Interests or Pledged Notes or Pledged Treasury
Securities, as the case may be, to the Purchase Contract Agent for the benefit
of such Holder, in each case free and clear of the Pledge created hereby, for
distribution to such Holder. A Growth Equity Units holder may settle early only
in integral multiples of 40 Purchase Contracts and an Income Equity Units
holder, if a Tax Event
Redemption, a Successful Initial Remarketing or a Successful Secondary
Remarketing has occurred, may settle early only in integral multiples of 20,000
Purchase Contracts.
Section 5.07. Application of Proceeds in Settlement of Purchase Contracts.
(a) If a Holder of Income Equity Units (unless a Successful Initial
Remarketing, a Successful Secondary Remarketing or a Tax Event Redemption has
occurred) has not elected to make an effective Cash Settlement by notifying the
Purchase Contract Agent in the manner provided for in Section 5.02(b)(i) of the
Purchase Contract Agreement, such Holder shall be deemed to have elected to pay
for the shares of Common Stock to be issued under such Purchase Contracts from
the Proceeds of the remarketing of the related Pledged Notes. Upon written
notice of such event from the Purchase Contract Agent, the Collateral Agent
shall instruct the Securities Intermediary to Transfer 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
reasonable efforts to remarket such Pledged Notes. The Remarketing Agent will
deposit the Proceeds of such Final Remarketing (less, to the extent permitted by
the Remarketing Agreement, the Remarketing Fee) in the Collateral Account, and
the Collateral Agent shall invest the Proceeds of the remarketing in Permitted
Investments set forth in clause (6) of the definition of Permitted Investments.
On the Purchase Contract Settlement Date, the Purchase Contract Agent shall give
written direction to the Collateral Agent specifying the instruction the
Collateral Agent shall give to the Securities Intermediary in order to apply a
portion of the Proceeds from such remarketing equal to the aggregate principal
amount of such Pledged Notes to satisfy in full such Holder's obligations to pay
the Purchase Price to purchase the shares of Common Stock under the related
Purchase Contracts and the balance of the Proceeds from the remarketing, if any,
that shall be transferred to the Purchase Contract Agent for the benefit of such
Holder for distribution to such Holder.
If (i) the Remarketing Agent advises the Collateral Agent in writing that
there has been a Failed Final Remarketing or (ii) a Holder of Income Equity
Units has given notice of its intention to make a Cash Settlement in the manner
provided for in Section 5.02(b)(i) of the Purchase Contract Agreement, but
failed to deliver the required cash prior to 11:00 a.m. (New York City time) on
the Business Day immediately preceding the Purchase Contract Settlement Date,
thus, in each case, resulting in an event of default under the Purchase Contract
Agreement and hereunder, the Collateral Agent, for the benefit of the Company
shall, at the written direction of the Company, exercise its rights as a secured
party with respect to the Pledged Notes and use commercially reasonable efforts
to dispose of the Pledged Notes in accordance with applicable law and apply the
proceeds from such disposition in full satisfaction of such Holder's obligations
to pay the Purchase Price for the shares of Common Stock.
(b) If a Holder of Growth Equity Units or a Holder of Income Equity Units
(if a Tax Event Redemption, a Successful Initial Remarketing or a Successful
Secondary Remarketing has occurred) has not elected to make an effective Cash
Settlement by notifying the Purchase Contract Agent in the manner provided for
in Section 5.02(e)(i) of the Purchase Contract Agreement, or has given such
notice but failed to make such payment in the manner required by Section
5.02(e)(ii) of the Purchase Contract Agreement, such Holder shall be deemed to
have elected to pay for the shares of Common Stock to be issued under such
Purchase Contracts from the Proceeds of the related Pledged Treasury Securities
or Pledged Applicable Ownership
Interests, as the case may be. Promptly, after 11:00 a.m. (New York City time)
on the Business Day immediately prior to the Purchase Contract Settlement Date,
the Collateral Agent shall invest the Cash Proceeds of the maturing Pledged
Treasury Securities or Pledged Applicable Ownership Interests, as the case may
be, in Permitted Investments set forth in clause 6 of the definition of
Permitted Investments, unless prior to 10:30 a.m. (New York City time), the
Company shall otherwise instruct the Collateral Agent as to the type of
Permitted Investments in which any such Cash Proceeds shall be invested. Without
receiving any instruction from any such Holder, the Collateral Agent shall apply
the Proceeds of the related Pledged Treasury Securities or Pledged Applicable
Ownership Interests, as the case may be, to the settlement of such Purchase
Contracts on the Purchase Contract Settlement Date. In the event the sum of the
Proceeds from the related Pledged Treasury Securities or Pledged Applicable
Ownership Interests, as the case may be, and the investment earnings from the
investment in Permitted Investments exceeds the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent shall instruct
the Securities Intermediary to distribute such excess, when received, to the
Purchase Contract Agent for the benefit of such Holder for distribution to such
Holder.
(c) Under the Remarketing Agreement and subject to the terms of any
supplemental remarketing agreement, on or prior to 11:00 a.m. (New York City
time) on the second Business Day immediately preceding the Initial Remarketing
Date, the Secondary Remarketing Date or the Final Remarketing Date, as
applicable, Holders of Separate Notes may elect to have their Separate Notes
remarketed by delivering their Separate Notes, along with a notice of such
election, substantially in the form of Exhibit F hereto, to the Custodial Agent.
The Custodial Agent shall hold Separate Notes in an account separate from the
Collateral Account in which the Pledged Securities shall be held. Holders of
Notes electing to have their Separate Notes remarketed will also have the right
to withdraw that election by written notice to the Custodial Agent,
substantially in the form of Exhibit G hereto, on or prior to the second
Business Day immediately preceding the Initial Remarketing Date, the Secondary
Remarketing Date or the Final Remarketing Date, as applicable, upon which notice
the Custodial Agent shall return such Separate Notes to such Holder.
On the Business Day immediately preceding Initial Remarketing Date, the
Secondary Remarketing Date or the Final Remarketing Date, as applicable, the
Custodial Agent shall notify the Remarketing Agent of the aggregate principal
amount of the Separate Notes to be remarketed and will deliver to the
Remarketing Agent for remarketing all Separate Notes delivered to the Custodial
Agent pursuant to this Section 5.07(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 of such
Remarketing for the benefit of such Holders. In the event of a Failed Initial
Remarketing, a Failed Secondary Remarketing or a Failed Final Remarketing, the
Remarketing Agent will promptly return such Separate Notes to the Custodial
Agent for redelivery to such Holders.
Section 5.08. Tax Event Redemption. If the Collateral Agent receives
written notice that a Tax Event Redemption Date has occurred while Notes are
still credited to the Collateral Account, the Collateral Agent shall apply the
Redemption Amount to purchase the Treasury Portfolio and the Collateral Agent
shall credit the Applicable Ownership Interests (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio to the Collateral
Account and shall transfer the Applicable Ownership Interest (as specified in
clause (B) of the definition of such term) of the Treasury Portfolio to the
Purchase Contract Agent for the benefit of the Holders of the Income Equity
Units. Upon credit to the Collateral Account of the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio having a Value equal to the aggregate principal amount of the
Pledged Notes, the Collateral Agent shall cause the Securities Intermediary to
release the Pledged Notes from the Collateral Account and shall promptly
transfer the Pledged Notes to the Company.
ARTICLE VI
VOTING RIGHTS - PLEDGED NOTES
Section 6.01. Voting Rights. The Purchase Contract Agent may exercise, or
refrain from exercising, any and all voting and other consensual rights
pertaining to the Pledged Notes or any part thereof for any purpose not
inconsistent with the terms of this Agreement and in accordance with the terms
of the Purchase Contract Agreement; provided, that the Purchase Contract Agent
shall not exercise or shall not refrain from exercising such right, as the case
may be, if, in the judgment of the Purchase Contract Agent, such action would
impair or otherwise have a material adverse effect on the value of all or any of
the Pledged Notes; and provided, further, that the Purchase Contract Agent shall
give the Company and the Collateral Agent at least five Business Days' prior
written notice of the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of any notices and
other communications in respect of any Pledged Notes, including notice of any
meeting at which holders of the Notes are entitled to vote or solicitation of
consents, waivers or proxies of holders of the Notes, the Collateral Agent shall
use reasonable efforts to send promptly to the Purchase Contract Agent such
notice or communication, and as soon as reasonably practicable after receipt of
a written request therefor from the Purchase Contract Agent, execute and deliver
to the Purchase Contract Agent such proxies and other instruments in respect of
such Pledged Notes (in form and substance satisfactory to the Collateral Agent)
as are prepared by the Purchase Contract Agent with respect to the Pledged
Notes.
ARTICLE VII
RIGHTS AND REMEDIES
Section 7.01. Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies specified in Section 5.07
hereof or otherwise available at law or in equity, after an event of default (as
specified in Section 7.01(b) below) hereunder, the Collateral Agent shall have
all of the rights and remedies with respect to the Collateral of a secured party
under the UCC (whether or not the UCC is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Without limiting the generality of the foregoing, such remedies may
include, to the extent permitted by applicable law, (1) retention of the Pledged
Notes, Pledged Treasury Securities or the appropriate Pledged
Applicable Ownership Interests in full satisfaction of the Holders' obligations
under the Purchase Contracts and the Purchase Contract Agreement or (2) sale of
the Pledged Notes, Pledged Treasury Securities or the appropriate Pledged
Applicable Ownership Interests in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Pledged Applicable
Ownership Interests, or on account of principal payments of any Pledged Treasury
Securities as provided in Article 3 hereof, in satisfaction of the Obligations
of the Holder of the Securities of which such appropriate Pledged Applicable
Ownership Interests or such Pledged Treasury Securities, as applicable, are a
part under the related Purchase Contracts, the inability to make such payments
shall constitute an event of default hereunder and the Collateral Agent shall
have and may exercise, with reference to such Pledged Treasury Securities or
Pledged Applicable Ownership Interests, as applicable, any and all of the rights
and remedies available to a secured party under the UCC and the TRADES
Regulations after default by a debtor, and as otherwise granted herein or under
any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of
the Pledged Notes, (ii) the principal amount of the Pledged Treasury Securities
and (iii) the principal amount of the Pledged Applicable Ownership Interest,
subject, in each case, to the provisions of Article 3 hereof, and as otherwise
granted herein.
(d) The Purchase Contract Agent and each Holder of Securities agrees that,
from time to time, upon the written request of the Collateral Agent or the
Purchase Contract Agent, such Holder shall execute and deliver such further
documents and do such other acts and things as the Collateral Agent may
reasonably request in order to maintain the Pledge, and the perfection and
priority thereof, and to confirm the rights of the Collateral Agent hereunder.
The Purchase Contract Agent shall have no liability to any Holder for executing
any documents or taking any such acts requested by the Collateral Agent
hereunder, except for liability for its own grossly negligent acts, its own
grossly negligent failure to act or its own willful misconduct.
Section 7.02. Tax Event Redemption. Upon the occurrence of a Tax Event
Redemption Date while Notes are still credited to the Collateral Account, the
Redemption Amount, plus any accrued and unpaid interest payable on the Tax Event
Redemption Date with respect to the principal amount of the Pledged Notes shall
be credited to the Collateral Account by the Indenture Trustee, on or prior to
12:30 p.m., New York City time on such Tax Event Redemption Date, by federal
funds check or wire transfer of immediately available funds. The Collateral
Agent is hereby authorized to present the Pledged Notes for payment as may be
required by their respective terms. Upon receipt of such funds, the Pledged
Notes shall be released from the Collateral Account. In the event such funds are
credited to the Collateral Account, the Collateral Agent, at the written
direction of the Company, shall instruct the Securities Intermediary to (a)
apply an amount equal to the Redemption Amount of such funds to purchase the
Treasury Portfolio from the Quotation Agent for credit to the Collateral Account
and (b) promptly remit the remaining portion of such funds, if any, to the
Purchase Contract Agent for payment to the Holders of Income Equity Units.
Section 7.03. Initial Remarketing and Secondary Remarketing. The Collateral
Agent shall, by 11:00 a.m., New York City time, on the Business Day immediately
preceding the Initial Remarketing Date, without any instruction from any Holder
of Income Equity Units, present the related Pledged Notes to the Remarketing
Agent for remarketing. Upon receiving such Pledged Notes, the Remarketing Agent,
pursuant to the terms of the Remarketing Agreement, will use its reasonable
efforts to remarket such Pledged Notes on the Initial Remarketing Date at a
price of approximately 100.5% (but not less than 100%) of the Treasury Portfolio
Purchase Price. After deduction as the Remarketing Fee of 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 on or prior to 12:00 p.m., New York City
time, by check or wire transfer in immediately available funds at such place and
at such account as may be designated by the Collateral Agent in exchange for the
Pledged Notes. In the event the Collateral Agent receives such Proceeds, the
Collateral Agent will, at the written direction of the Company, apply an amount
equal to the Treasury Portfolio Purchase Price to purchase from the Quotation
Agent the Treasury Portfolio and promptly remit the remaining portion of such
Proceeds to the Purchase Contract Agent for payment to the Holders of Income
Equity Units. The Collateral Agent shall Transfer the Treasury Portfolio to the
Collateral Account to secure the obligation of all Holders of Income Equity
Units to purchase Common Stock of the Company under the Purchase Contracts
constituting a part of such Income Equity Units, in substitution for the Pledged
Notes, which shall be released from the Collateral Account. In the event of a
Failed Initial Remarketing, the Notes presented to the Remarketing Agent
pursuant to this Section 7.03 for Remarketing shall be redeposited into the
Collateral Account.
In the event of a Failed Initial Remarketing, the Collateral Agent shall,
by 11:00 a.m., New York City time, on the Business Day immediately preceding the
Secondary Remarketing Date, without any instruction from any Holder of Income
Equity Units, present the related Pledged Notes to the Remarketing Agent for
remarketing. Upon receiving such Pledged Notes, the Remarketing Agent, pursuant
to the terms of the Remarketing Agreement, will use its reasonable efforts to
remarket such Pledged Notes on the Secondary Remarketing Date at a price of
approximately 100.5% (but not less than 100%) of the Treasury Portfolio Purchase
Price. After deduction as the Remarketing Fee of 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 on or prior to 12:00 p.m., New York City
time, by check or wire transfer in immediately available funds at such place and
at such account as may be designated by the Collateral Agent in exchange for the
Pledged Notes. In the event the Collateral Agent receives such Proceeds, the
Collateral Agent will, at the written direction of the Company, apply an amount
equal to the Treasury Portfolio Purchase Price to purchase from the Quotation
Agent the Treasury Portfolio and promptly remit the remaining portion of such
Proceeds to the Purchase Contract Agent for payment to the Holders of Income
Equity Units. The Collateral Agent shall Transfer the Treasury Portfolio to the
Collateral Account to secure the obligation of all Holders of Income Equity
Units to purchase Common Stock of the Company under the Purchase Contracts
constituting a part of such Income Equity Units, in substitution for the Pledged
Notes, which shall be released from the Collateral Account. In the event of a
Failed Secondary Remarketing, the Notes presented to the Remarketing Agent
pursuant to this Section 7.03 for Remarketing shall be redeposited into the
Collateral Account.
Section 7.04. Substitutions. Whenever a Holder has the right to substitute
Treasury Securities, Notes or security entitlements for any of them or the
appropriate Applicable Ownership Interests of the Treasury Portfolio, as the
case may be, for financial assets held in the Collateral Account, such
substitution shall not constitute a novation of the security interest created
hereby.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 8.01. Representations and Warranties. Each Holder from time to
time, acting through the Purchase Contract Agent as attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represents
and warrants to the Collateral Agent (with respect to such Holder's interest in
the Collateral), which representations and warranties shall be deemed repeated
on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and lien on
the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and, in the
case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent for credit to the Collateral
Account, free and clear of any security interest, lien, encumbrance, call,
liability to pay money or other restriction other than the security interest and
lien granted under Article 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral Agent for credit
to the Collateral Account, the Collateral Agent, for the benefit of the Company,
will have a valid and perfected first priority security interest therein
(assuming that any central clearing operation or any securities intermediary or
other entity not within the control of the Holder involved in the Transfer of
the Collateral, including the Collateral Agent and the Securities Intermediary,
gives the notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the establishment
and exercise of control pursuant to Article 4 hereof); and
(d) the execution and performance by the Holder of its obligations under
this Agreement will not result in the creation of any security interest, lien or
other encumbrance on the Collateral other than the security interest and lien
granted under Article 2 hereof or violate any provision of any existing law or
regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.
Section 8.02. Covenants. The Holders from time to time, acting through the
Purchase Contract Agent as their attorney-in-fact (it being understood that the
Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other security interest whatsoever
over the Collateral or any part of it other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the Pledge hereunder,
transferred in connection with the Transfer of the Securities.
ARTICLE IX
THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES INTERMEDIARY
It is hereby agreed as follows:
Section 9.01. Appointment, Powers and Immunities. The Collateral Agent, the
Custodial Agent or Securities Intermediary shall act as agent for the Company
hereunder with such powers as are specifically vested in the Collateral Agent,
the Custodial Agent or Securities Intermediary, as the case may be, by the terms
of this Agreement, together with such other powers as are reasonably incidental
thereto. The Collateral Agent, the Custodial Agent and Securities Intermediary
shall:
(a) have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants or obligations shall be inferred from
this Agreement against the Collateral Agent, the Custodial Agent and Securities
Intermediary, nor shall the Collateral Agent, the Custodial Agent and Securities
Intermediary be bound by the provisions of any agreement by any party hereto
beyond the specific terms hereof;
(b) not be responsible for any recitals contained in this Agreement, or in
any certificate or other document referred to or provided for in, or received by
it under, this Agreement, the Securities or the Purchase Contract Agreement, or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement (other than as against the Collateral Agent, the
Custodial Agent or Securities Intermediary, as the case may be), the Securities,
any Collateral or the Purchase Contract Agreement or any other document referred
to or provided for herein or therein or for any failure by the Company or any
other Person (except the Collateral Agent, the Custodial Agent or Securities
Intermediary, as the case may be) to perform any of its obligations hereunder or
thereunder or for the perfection, priority or, except as expressly required
hereby, maintenance of any security interest created hereunder;
(c) not be required to initiate or conduct any litigation or collection
proceedings hereunder (except pursuant to directions furnished under Section
9.02 hereof, subject to Section 9.06 hereof);
(d) not be responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to or provided for
herein or in connection herewith or therewith, except for its own gross
negligence or willful misconduct; and
(e) not be required to advise any party as to selling or retaining, or
taking or refraining from taking any action with respect to, any securities or
other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall take all
reasonable action in connection with the safekeeping and preservation of the
Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent,
Custodial Agent or Securities Intermediary to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder. In no event shall the Collateral Agent, Custodial Agent or Securities
Intermediary be liable for any amount in excess of the Value of the Collateral.
Notwithstanding the foregoing, each of the Collateral Agent, Custodial Agent and
Securities Intermediary in its individual capacity hereby waives any right of
setoff, bankers' lien, liens or perfection rights as securities intermediary or
any counterclaim with respect to any of the Collateral.
Section 9.02. Instructions of the Company. The Company shall have the
right, by one or more written instruments executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral Agent,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement or involve the Collateral
Agent in personal liability and (ii) the Collateral Agent shall be adequately
indemnified as provided herein. Nothing contained in this Section 9.02 shall
impair the right of the Collateral Agent in its discretion to take any action or
omit to take any action which it deems proper and which is not inconsistent with
such direction.
Section 9.03. Reliance by Collateral Agent and Securities Intermediary.
Each of the Securities Intermediary, the Custodial Agent and the Collateral
Agent shall be entitled to rely upon any certification, order, judgment,
opinion, notice or other written communication (including, without limitation,
any thereof by e-mail or similar electronic means, telecopy, telex or facsimile)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons (without being required to determine
the correctness of any fact stated therein) and consult with and rely upon
advice, opinions and statements of legal counsel and other experts selected by
the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be. As to any matters not expressly provided for by this Agreement, the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
in accordance with instructions given by the Company in accordance with this
Agreement.
Section 9.04. Rights in Other Capacities. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any other Person
interested herein and any Holder of Securities (and any of their respective
subsidiaries or affiliates) as if it were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent, the Securities Intermediary and their
affiliates may accept fees and other consideration from the Purchase Contract
Agent and any Holder of Securities without having to account for the same to the
Company; provided that each of the Securities Intermediary, the Custodial Agent
and the
Collateral Agent covenants and agrees with the Company that it shall not accept,
receive or permit there to be created in favor of itself and shall take no
affirmative action to permit there to be created in favor of any other Person,
any security interest, lien or other encumbrance of any kind in or upon the
Collateral other than the lien created by the Pledge.
Section 9.05. Non-Reliance on Collateral Agent, the Custodial Agent and
Securities Intermediary. None of the Securities Intermediary, the Custodial
Agent or the Collateral Agent shall be required to keep itself informed as to
the performance or observance by the Purchase Contract Agent or any Holder of
Securities of this Agreement, the Purchase Contract Agreement, the Securities or
any other document referred to or provided for herein or therein or to inspect
the properties or books of the Purchase Contract Agent or any Holder of
Securities. None of the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall have any duty or responsibility to provide the Company with
any credit or other information concerning the affairs, financial condition or
business of the Purchase Contract Agent or any Holder of Securities (or any of
their respective affiliates) that may come into the possession of the Collateral
Agent, the Custodial Agent or the Securities Intermediary or any of their
respective affiliates.
Section 9.06. Compensation and Indemnity. The Company agrees to:
(a) pay the Collateral Agent, the Custodial Agent and the Securities
Intermediary from time to time such compensation as shall be agreed in writing
between the Company and the Collateral Agent or the Securities Intermediary, as
the case may be, for all services rendered by them hereunder;
(b) indemnify and hold harmless the Collateral Agent, the Custodial Agent,
the Securities Intermediary and each of their respective directors, officers,
agents, affiliates and employees (collectively, the "INDEMNITEES"), harmless
from and against any and all claims, liabilities, losses, damages, fines,
penalties and expenses (including reasonable fees and expenses of counsel)
(collectively, "Losses" and individually, a "LOSS") that may be imposed on,
incurred by, or asserted against, the Indemnitees or any of them for following
any instructions or other directions upon which either the Collateral Agent, the
Custodial Agent or the Securities Intermediary is entitled to rely pursuant to
the terms of this Agreement; and
(c) in addition to and not in limitation of paragraph (b) immediately
above, indemnify and hold the Indemnitees and each of them harmless from and
against any and all Losses that may be imposed on, incurred by or asserted
against, the Indemnitees or any of them in connection with or arising out of the
Collateral Agent's, the Custodial Agent's or the Securities Intermediary's
acceptance or performance of its powers and duties under this Agreement,
provided the Collateral Agent, the Custodial Agent or the Securities
Intermediary has not acted with gross negligence or engaged in willful
misconduct or bad faith with respect to the specific Loss against which
indemnification is sought.
The provisions of this Section and Section 11.07 shall survive the
resignation or removal of the Collateral Agent, Custodial Agent or Securities
Intermediary and the termination of this Agreement.
Section 9.07. Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, then at its sole option, each of the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall be entitled,
after prompt notice to the Company and the Purchase Contract Agent, to refuse to
comply with any and all claims, demands or instructions with respect to such
property or funds so long as such dispute or conflict shall continue, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall not
be or become liable in any way to any of the parties hereto for its failure or
refusal to comply with such conflicting claims, demands or instructions. The
Collateral Agent, the Custodial Agent and the Securities Intermediary shall be
entitled to refuse to act until either:
(a) such conflicting or adverse claims or demands shall have been finally
determined by a court of competent jurisdiction or settled by agreement between
the conflicting parties as evidenced in a writing satisfactory to the Collateral
Agent, the Custodial Agent or the Securities Intermediary; or
(b) the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall have received security or an indemnity satisfactory to it
sufficient to save it harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which it may incur by reason of its acting.
The Collateral Agent, the Custodial Agent and the Securities Intermediary may in
addition elect to commence an interpleader action or seek other judicial relief
or orders as the Collateral Agent, the Custodial Agent or the Securities
Intermediary may deem necessary. Notwithstanding anything contained herein to
the contrary, none of the Collateral Agent, the Custodial Agent or the
Securities Intermediary shall be required to take any action that is in its
opinion contrary to law or to the terms of this Agreement, or which would in its
opinion subject it or any of its officers, employees or directors to liability.
Section 9.08. Resignation of Collateral Agent, the Custodial Agent and
Securities Intermediary.
(a) Subject to the appointment and acceptance of a successor Collateral
Agent, Custodial Agent or Securities Intermediary as provided below:
(i) if the Collateral Agent, the Custodial Agent or the Securities
Intermediary is the same Person and the Purchase Contract Agent and an
event of default occurs under the Purchase Contract Agreement or this
Agreement, except an event of default as a result of (x) a Failed Final
Remarketing or (y) the event referred to in clause (ii) of the second
paragraph of Section 5.07(a) hereof, the Collateral Agent, the Custodial
Agent or the Securities Intermediary shall resign immediately;
(ii) the Collateral Agent, the Custodial Agent and the Securities
Intermediary may resign at any time by giving notice thereof to the Company
and the Purchase Contract Agent as attorney-in-fact for the Holders of
Securities;
(iii) the Collateral Agent, the Custodial Agent and the Securities
Intermediary
may be removed at any time by the Company; and
(iv) if the Collateral Agent, the Custodial Agent or the Securities
Intermediary fails to perform any of its material obligations hereunder in
any material respect for a period of not less than 20 days after receiving
written notice of such failure by the Purchase Contract Agent and such
failure shall be continuing, the Collateral Agent, the Custodial Agent and
the Securities Intermediary may be removed by the Purchase Contract Agent,
acting at the direction of the Holders of Securities.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Collateral Agent, the Custodial Agent or the Securities Intermediary
pursuant to clause (iv) of this Section 9.08(a). Upon any such resignation or
removal, the Company shall have the right to appoint a successor Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, which, in
the case of a resignation pursuant to clause (i) of this Section 9.08(a), shall
not be an Affiliate of the Purchase Contract Agent. If no successor Collateral
Agent, Custodial Agent or Securities Intermediary shall have been so appointed
and shall have accepted such appointment within 30 days after the retiring
Collateral Agent's, Custodial Agent's or Securities Intermediary's giving of
notice of resignation or the Company's or the Purchase Contract Agent's giving
notice of such removal, then the retiring Collateral Agent, Custodial Agent or
Securities Intermediary may petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent, Custodial Agent or Securities
Intermediary. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall each be a bank or a national banking association which has an
office (or an agency office) in New York City with a combined capital and
surplus of at least $50,000,000. Upon the acceptance of any appointment as
Collateral Agent, Custodial Agent or Securities Intermediary hereunder by a
successor Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, such successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, and the
retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, shall take all appropriate action, subject to payment of any
amounts owed to it hereunder, to transfer any money and property held by it
hereunder (including the Collateral) to such successor. The retiring Collateral
Agent, Custodial Agent or Securities Intermediary shall, upon such succession,
be discharged from its duties and obligations as Collateral Agent, Custodial
Agent or Securities Intermediary hereunder. After any retiring Collateral
Agent's, Custodial Agent's or Securities Intermediary's resignation hereunder as
Collateral Agent, Custodial Agent or Securities Intermediary, the provisions of
this Article 9 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Collateral
Agent, Custodial Agent or Securities Intermediary. Any resignation or removal
of the Collateral Agent, Custodial Agent or Securities Intermediary hereunder,
at a time when such Person is acting as the Collateral Agent, Custodial Agent or
Securities Intermediary, shall be deemed for all purposes of this Agreement as
the simultaneous resignation or removal of the Collateral Agent, Securities
Intermediary or Custodial Agent, as the case may be.
Section 9.09. Right to Appoint Agent or Advisor. The Collateral Agent shall
have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the
advice of, such agents or advisors selected in good faith. The appointment of
agents pursuant to this Section 9.09 shall be subject to prior written consent
of the Company, which consent shall not be unreasonably withheld.
Section 9.10. Survival. The provisions of this Article 9 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.
Section 9.11. Exculpation. Anything contained in this Agreement to the
contrary notwithstanding, in no event shall the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, directors, employees or
agents be liable under this Agreement to any third party for indirect, special,
punitive, or consequential loss or damage of any kind whatsoever, including, but
not limited to, lost profits, whether or not the likelihood of such loss or
damage was known to the Collateral Agent, the Custodial Agent or the Securities
Intermediary, or any of them and regardless of the form of action.
ARTICLE X
AMENDMENT
Section 10.01. Amendment Without Consent of Holders. Without the consent of
any Holders, the Company, when authorized by a Board Resolution, the Collateral
Agent, the Custodial Agent the Securities Intermediary and the Purchase Contract
Agent, at any time and from time to time, may amend this Agreement, in form
satisfactory to the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, to:
(a) evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company;
(b) evidence and provide for the acceptance of appointment hereunder by a
successor Collateral Agent, Custodial Agent, Securities Intermediary or Purchase
Contract Agent;
(c) add to the covenants of the Company for the benefit of the Holders, or
surrender any right or power herein conferred upon the Company, provided such
covenants or such surrender do not adversely affect the validity, perfection or
priority of the Pledge created hereunder; or
(d) cure any ambiguity (or formal defect), correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, or make any other provisions with respect to such matters or questions
arising under this Agreement, provided such action shall not adversely affect
the interests of the Holders in any material respect.
Section 10.02. Amendment with Consent of Holders. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of such Holders delivered to the Company, the Purchase
Contract Agent, the Custodial Agent, the Securities Intermediary and the
Collateral Agent, as the case may be, the Company, when duly authorized by a
Board Resolution, the Purchase Contract Agent, the Collateral Agent, the
Securities Intermediary and the Collateral Agent may amend this Agreement for
the purpose of modifying
in any manner the provisions of this Agreement or the rights of the Holders in
respect of the Securities; provided, however, that no such supplemental
agreement shall, without the unanimous consent of the Holders of each
Outstanding Security adversely affected thereby in any material respect:
(a) change the amount or type of Collateral underlying a Security (except
for the rights of holders of Income Equity Units to substitute the Treasury
Securities for the Pledged Notes or the Pledged Applicable Ownership Interest,
as the case may be, or the rights of Holders of Growth Equity Units to
substitute Notes or the Applicable Ownership Interest (as specified in clause
(A) of such term) 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 Purchase
Contract Agreement if such action were effected by a modification or amendment
of the provisions of the Purchase Contract Agreement; or
(c) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for the modification or amendment of the provisions of this
Agreement;
provided that if any amendment or proposal referred to above would adversely
affect only the Income Equity Units or only the Growth Equity Units, then only
the affected class of Holders as of the record date for the Holders entitled to
vote thereon will be entitled to vote on such amendment or proposal, and such
amendment or proposal shall not be effective except with the consent of Holders
of not less than a majority of such class; provided, further, that the unanimous
consent of the Holders of each outstanding Purchase Contract of such class
affected thereby shall be required to approve any amendment or proposal
specified in clauses (a) through (c) above.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 10.03. Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 7.01 of the Purchase Contract Agreement with
respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent, if
any, to the execution and delivery of such amendment have been satisfied. The
Collateral Agent, Custodial Agent, Securities Intermediary and Purchase Contract
Agent may, but shall not be obligated to, enter into any such amendment which
affects their own respective rights, duties or immunities under this Agreement
or otherwise.
Section 10.04. Effect of Amendments. Upon the execution of any amendment
under this Section, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or
thereafter authenticated, executed on behalf of the Holders and delivered under
the Purchase Contract Agreement shall be bound thereby.
Section 10.05. Reference of Amendments. Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Section may, and shall if required by the Collateral
Agent or the Purchase Contract Agent, bear a notation in form approved by the
Purchase Contract Agent and the Collateral Agent as to any matter provided for
in such amendment. If the Company shall so determine, new Security Certificates
so modified as to conform, in the opinion of the Collateral Agent, the Purchase
Contract Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for Certificates representing Outstanding
Securities.
ARTICLE XI
MISCELLANEOUS
Section 11.01. No Waiver. No failure on the part of the Company, the
Collateral Agent, the Securities Intermediary or any of their respective agents
to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Company, the Collateral
Agent, the Securities Intermediary or any of their respective agents of any
right, power or remedy hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. The remedies herein are
cumulative and are not exclusive of any remedies provided by law.
Section 11.02. Governing Law; Submission to Jurisdiction. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION THAT WOULD REQUIRE THE
APPLICATION OF THE LAW OF ANY OTHER JURISDICTION. The Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Holders from
time to time of the Securities, acting through the Purchase Contract Agent as
their attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York state court sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. The Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Holders from time to time of the Securities,
acting through the Purchase Contract Agent as their attorney-in-fact,
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
Section 11.03. Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by
telecopy) delivered to the intended recipient at the "ADDRESS FOR NOTICES"
specified below its name on the signature pages hereof or, as to any party, at
such other address as shall be designated by such party in a notice to the other
parties. Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by telecopier or
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid.
Section 11.04. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.
Section 11.05. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 11.06. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
Section 11.07. Expenses, Etc.. The Company agrees to reimburse the
Collateral Agent, the Custodial Agent and the Securities Intermediary for:
(a) all reasonable costs and expenses of the Collateral Agent, the
Custodial Agent and the Securities Intermediary (including, without limitation,
the reasonable fees and expenses of counsel to the Collateral Agent, the
Custodial Agent and the Securities Intermediary), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent, the
Custodial Agent and the Securities Intermediary (including, without limitation,
reasonable fees and expenses of counsel) in connection with (i) any enforcement
or proceedings resulting or incurred in connection with causing any Holder of
Securities to satisfy its obligations under the Purchase Contracts forming a
part of the Securities and (ii) the enforcement of this Section 11.07;
(c) all transfer, stamp, documentary or other similar taxes, assessments
or charges levied by any governmental or revenue authority in respect of this
Agreement or any other document referred to herein and all costs, expenses,
taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated
hereby;
(d) all fees and expenses of any agent or advisor appointed by the
Collateral Agent and
consented to by the Company under Section 9.09 of this Agreement; and
(e) any other out-of-pocket costs and expenses reasonably incurred by the
Collateral Agent, the Custodial Agent and the Securities Intermediary in
connection with the performance of their duties hereunder.
Section 11.08. Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
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 the Securities under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledger.
Section 11.09. Notice of Tax Event, Tax Event Redemption and Termination
Event. Upon the occurrence of a Tax Event, a Tax Event Redemption or a
Termination Event, the Company shall deliver written notice to the Collateral
Agent and the Securities Intermediary. Upon the written request of the
Collateral Agent or the Securities Intermediary, the Company shall inform such
party whether or not a Tax Event, a Tax Event Redemption or a Termination Event
has occurred.
[SIGNATURES ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SEMPRA ENERGY U.S. BANK TRUST NATIONAL ASSOCIATION,
as Purchase Contract Agent and
as attorney-in-fact of the Holders
from time to time of the Securities
By: /s/ Charles A. McMonagle By: /s/ Marlene J. Fahey
------------------------------------ ----------------------------------
Name: Charles A. McMonagle Name: Marlene J. Fahey
Title: Vice President and Treasurer Title: Vice President
Address for Notices: Address for Notices:
Sempra Energy U.S. Bank Trust National Association
101 Ash Street 100 Wall Street
San Diego, California 29101 Suite 1600
Telecopier No.: (619) 696-2999 New York, New York 10005
Attention: Treasurer Telecopier No.: (212) 809-5459
Attention: Corporate Trust Services
With a copy to:
Latham & Watkins
633 West Fifth Street
Suite 4000
Los Angeles, California 90071
Telecopier No.: (213) 891-8763
Attention: Scott Hodgkins, Esq.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Collateral Agent, Custodial Agent
and Securities Intermediary
By: /s/ Marlene J. Fahey
------------------------------------
Name: Marlene J. Fahey
Title: Vice President
Address for Notices:
U.S. Bank Trust National Association
100 Wall Street
Suite 1600
New York, New York 10005
Telecopier No.: (212) 809-5459
Attention: Corporate Trust Services
EXHIBIT A
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Establishment of Growth Equity Units)
U. S. Bank Trust National Association
100 Wall Street
Suite 1600
New York, New York 10005
Telecopier No.: (212) 809-5459
Attention: Corporate Trust Services
Re: _______ Income Equity Units of Sempra Energy
(the "COMPANY")
The securities account of U.S. Bank Trust National
Association, as Collateral Agent, maintained by the
Securities Intermediary and designated "U.S. Bank Trust
National Association, as Collateral Agent of Sempra
Energy, as pledgee of U.S. Bank Trust National
Association, as the Purchase Contract Agent on behalf of
and as attorney-in-fact for the Holders" (the
"COLLATERAL ACCOUNT")
Please refer to the Pledge Agreement, dated as of April 30, 2002 (the
"PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, as Securities
Intermediary and as Custodial Agent and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Income Equity Units from time
to time. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.02 of the Pledge
Agreement that the holder of securities named below (the "Holder") has elected
to substitute $__________ Value of Treasury Securities or security entitlements
with respect thereto in exchange for an equal Value of [Pledged Notes] [Pledged
Applicable Ownership Interests] relating to _________ Income Equity Units and
has delivered to the undersigned a notice stating that the Holder has
Transferred such Treasury Securities or security entitlements with respect
thereto to the Securities Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or security entitlements thereto have
been credited to the Collateral Account, to release to the undersigned an equal
Value of [Pledged Notes] [Pledged Applicable Ownership Interests] in accordance
with Section 5.02 of the Pledge Agreement.
A-1
Date:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Purchase Contract Agent and as attorney-
in-fact of the Holders from time to time of
the Securities
By: ________________________________________
Name:
Title:
A-2
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements with respect thereto for the [Pledged Notes]
[Pledged Applicable Ownership Interests]:
_____________________________________ ______________________________________
Name Social Security or other
Taxpayer Identification Number,
if any
_____________________________________
Address
_____________________________________
_____________________________________
A-3
EXHIBIT B
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Establishment of Growth Equity Units)
U. S. Bank Trust National Association
100 Wall Street
Suite 1600
New York, New York 10005
Telecopier No.: (212) 809-5459
Attention: Corporate Trust Services
Re: _______ Income Equity Units of Sempra Energy (the "COMPANY")
The securities account of U.S. Bank Trust National Association,
as Collateral Agent, maintained by the Securities Intermediary
and designated "U.S. Bank Trust National Association, as
Collateral Agent of Sempra Energy, as pledgee of U.S. Bank Trust
National Association, as the Purchase Contract Agent on behalf of
and as attorney-in-fact for the Holders" (the "COLLATERAL
ACCOUNT")
Please refer to the Pledge Agreement, dated as of April 30, 2002 (the
"PLEDGE AGREEMENT"), among the Company, you, as Securities Intermediary, U.S.
Bank Trust National Association, as Purchase Contract Agent and as attorney-in-
fact for the holders of Income Equity Units from time to time, and the
undersigned, as Collateral Agent. Capitalized terms used herein but not defined
shall have the meanings set forth in the Pledge Agreement.
When you have confirmed that $__________ Value of Treasury Securities or
security entitlements thereto has been credited to the Collateral Account by or
for the benefit of _________, as Holder of Growth Equity Units (the "HOLDER"),
you are hereby instructed to release from the Collateral Account an equal Value
of [Pledged Notes or security entitlements with respect thereto] [Pledged
Applicable Ownership Interests] relating to _____ Income Equity Units of the
Holder by Transfer to the Purchase Contract Agent.
B-1
Dated:____________________
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Collateral Agent
By: ________________________________________
Name:
Title:
B-2
Please print name and address of Holder:
_____________________________________ ______________________________________
Name Social Security or other
Taxpayer Identification Number,
if any
_____________________________________
Address
_____________________________________
_____________________________________
B-3
EXHIBIT C
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Reestablishment of Income Equity Units )
U. S. Bank Trust National Association
100 Wall Street
Suite 1600
New York, New York 10005
Telecopier No.: (212) 809-5459
Attention: Corporate Trust Services
Re: ____________ Growth Equity Units of Sempra Energy (the "COMPANY")
Please refer to the Pledge Agreement dated as of April 30, 2002 (the
"PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, as Securities
Intermediary, as Custodial Agent and the undersigned, as Purchase Contract Agent
and as attorney-in-fact for the holders of Income Equity Units from time to
time. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.03[(a)][(b)] of the
Pledge Agreement that the holder of securities listed below (the "HOLDER") has
elected to substitute $_________Value of [Notes or security entitlements with
respect thereto] [Applicable Ownership Interests (as specified in clause (A) of
the definition of such term] in exchange for $__________ Value of Pledged
Treasury Securities and has delivered to the undersigned a notice stating that
the holder has Transferred such [Notes or security entitlements with respect
thereto] [Applicable Ownership Interests (as specified in clause (A) of the
definition of such term] to the Securities Intermediary, for credit to the
Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such [Notes or security entitlements with respect thereto]
[Applicable Ownership Interests (as specified in clause (A) of the definition of
such term] have been credited to the Collateral Account, to release to the
undersigned $__________ Value of Treasury Securities or security entitlements
with respect thereto related to _____ Growth Equity Units of such Holder in
accordance with Section 5.03(a) of the Pledge Agreement.
C-1
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Purchase Contract Agent
Dated:____________________ By: _________________________________
Name
Title:
C-2
Please print name and address of Holder electing to substitute [Notes or
security entitlements with respect thereto] [Applicable Ownership Interests (as
specified in clause (A) of the definition of such term] for Pledged Treasury
Securities:
____________________________________ _____________________________________
Name Social Security or other
Taxpayer Identification Number,
if any
____________________________________
Address
____________________________________
____________________________________
C-3
EXHIBIT D
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Reestablishment of Income Equity Units)
U. S. Bank Trust National Association
100 Wall Street
Suite 1600
New York, New York 10005
Telecopier No.: (212) 809-5459
Attention: Corporate Trust Services
Re: ___________ Growth Equity Units of Sempra Energy (the "COMPANY")
The securities account of U.S. Bank Trust National Association, as
Collateral Agent, maintained by the Securities Intermediary and
designated "U.S. Bank Trust National Association, as Collateral Agent
of Sempra Energy, as pledgee of U.S. Bank Trust National Association,
as the Purchase Contract Agent on behalf of and as attorney-in-fact
for the Holders" (the "COLLATERAL ACCOUNT")
Please refer to the Pledge Agreement dated as of April 30, 2002 (the
"PLEDGE AGREEMENT"), among the Company, you, as Securities Intermediary,
Custodial Agent and Collateral Agent and U.S. Bank Trust National Association,
as Purchase Contract Agent and as attorney-in-fact for the holders of Income
Equity Units from time to time, and the undersigned, as Collateral Agent.
Capitalized terms used herein but no defined shall have the meaning set forth in
the Pledge Agreement.
When you have confirmed that $ __________ Value of [Notes or security
entitlements with respect thereto] [Applicable Ownership Interests (as specified
in clause (A) of the definition of such term] has been credited to the
Collateral Account by or for the benefit of ________________, as Holder of
Income Equity Units (the "HOLDER"), you are hereby instructed to release from
the Collateral Account $__________ Value of Treasury Securities or security
entitlements thereto by Transfer to the Purchase Contract Agent.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Collateral Agent
Dated:________________ By: _________________________________
Name
D-1
Title:
____________________________ ________________________________________
Name Social Security or other Taxpayer
Identification Number, if any
____________________________
Address
____________________________
____________________________
D-2
EXHIBIT E
NOTICE OF CASH SETTLEMENT FROM COLLATERAL
AGENT TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
U. S. Bank Trust National Association
100 Wall Street
Suite 1600
New York, New York 10005
Telecopier No.: (212) 809-5459
Attention: Corporate Trust Services
Re: __________ Income Equity Units of Sempra Energy (the "COMPANY")
__________ Growth Equity Units of the Company
Please refer to the Pledge Agreement dated as of April 30, 2002 (the
"PLEDGE AGREEMENT"), by and among you, the Company, and U.S. Bank Trust National
Association, as Collateral Agent, Custodial Agent and Securities Intermediary.
Unless otherwise defined herein, terms defined in the Pledge Agreement are used
herein as defined therein.
In accordance with Section 5.05(d) of the Pledge Agreement, we hereby
notify you that as of 11:00 a.m. (New York City time) on the Business Day
immediately preceding ___________, we have received (i) $ _______________ in
immediately available funds paid in an aggregate amount equal to the Purchase
Price due to the Company on the Purchase Contract Settlement Date with respect
to ________________ Income Equity Units and (ii) $ ___________ in immediately
available funds paid in an aggregate amount equal to the Purchase Price due to
the Company on the Purchase Contract Settlement Date with respect to ______
Growth Equity Units.
U.S. BANK TRUST NATIONAL
ASSOCIATION,
as Collateral Agent
Dated: ___________________ By: ____________________________
Name
Title:
E-1
EXHIBIT F
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
U. S. Bank Trust National Association
100 Wall Street
Suite 1600
New York, New York 10005
Telecopier No.: (212) 809-5459
Attention: Corporate Trust Services
Re: Notes of Sempra Energy (the "Company")
The undersigned hereby notifies you in accordance with Section 5.07(c) of
the Pledge Agreement, dated as of April 30, 2002 (the "Pledge Agreement"), among
the Company, you, as Collateral Agent, Custodial Agent and Securities
Intermediary, the Purchase Contract Agent and as attorney-in-fact for the
holders of Income Equity Units from time to time, that the undersigned elects to
deliver $______________ aggregate principal amount of Separate Notes for
delivery to the Remarketing Agent on the Business Day immediately preceding the
[Initial Remarketing Date] [Secondary Remarketing Date] [Final Remarketing Date]
for remarketing pursuant to Section 5.07(c) of the Pledge Agreement. The
undersigned will, upon request of the Remarketing Agent, execute and deliver any
additional documents deemed by the Remarketing Agent or by the Company to be
necessary or desirable to complete the sale, assignment and transfer of the
Separate Notes tendered hereby. Capitalized terms used herein but no defined
shall have the meaning set forth in the Pledge Agreement.
The undersigned hereby instructs you, upon receipt of the Proceeds of such
remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions." The undersigned hereby instructs you, in the event of a
Failed [Initial] [Secondary] [Final] Remarketing, upon receipt of the Separate
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 Separate Notes tendered hereby and that the undersigned is the
record owner of any Notes tendered herewith in physical form or a participant in
The Depositary Trust Company ("DTC") and the beneficial owner of any Notes
tendered herewith by book-entry transfer to your account at DTC and (ii) agrees
to be bound by the terms and conditions of Section 5.07(c) of the Pledge
Agreement.
Date: ________________ ___________________________________
By:________________________________
Name:
Title:
F-1
Signature Guarantee:_______________
________________________________ ___________________________________
Name Social Security or other Taxpayer
Identification Number, if any
________________________________
Address
________________________________
________________________________
F-2
A. PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
Name(s)
(Please Print)
Address
(Please Print)
(Zip Code)
(Tax Identification or Social Security Number)
B. DELIVERY INSTRUCTIONS
In the event of a failed remarketing, Notes which are in physical form should be
delivered to the person(s) set forth below and mailed to the address set forth
below.
Name(s)
(Please Print)
Address
(Please Print)
(Zip Code)
(Tax Identification or Social Security Number)
F-3
In the event of a failed remarketing, Notes which are in book-entry form should
be credited to the account at The Depository Trust Company set forth below.
___________________________
DTC Account Number
Name of Account Party:______________________________________________
F-4
EXHIBIT G
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
U. S. Bank Trust National Association
100 Wall Street
Suite 1600
New York, New York 10005
Telecopier No.: (212) 809-5459
Attention: Corporate Trust Services
Re: Notes of Sempra Energy (the "Company")
The undersigned hereby notifies you in accordance with Section 5.07(c) of
the Pledge Agreement, dated as of April 30, 2002 (the "Pledge Agreement"), among
the Company and you, as Collateral Agent, Custodial Agent and Securities
Intermediary, and as Purchase Contract Agent and as attorney-in-fact for the
holders of Income Equity Units from time to time, that the undersigned elects to
withdraw the $_________ aggregate principal amount of Separate Notes delivered
to the Custodial Agent on _________, 200_ for remarketing pursuant to Section
5.07(c) of the Pledge Agreement. The undersigned hereby instructs you to return
such Notes to the undersigned in accordance with the undersigned's instructions.
With this notice, the Undersigned hereby agrees to be bound by the terms and
conditions of Section 5.07(c) of the Pledge Agreement. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.
Date:__________________ ___________________________________
By:________________________________
Name:
Title:
Signature Guarantee:_______________
_____________________________________ ___________________________________
Name Social Security or other Taxpayer
Identification Number, if any
_____________________________________
Address
_____________________________________
_____________________________________
G-1