Exhibit 4(n)
UTILICORP UNITED INC.
AND
CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION, AS COLLATERAL AGENT
AND
CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION, AS SECURITIES INTERMEDIARY
AND
BANK ONE TRUST COMPANY, NA, AS PURCHASE CONTRACT AGENT
FORM OF
PLEDGE AGREEMENT
DATED AS OF SEPTEMBER ____, 1999
TABLE OF CONTENTS
Section 1. Definitions...........................................................................................1
Section 2. Pledge................................................................................................5
SECTION 2.1 PLEDGE............................................................................................5
SECTION 2.2 CONTROL; FINANCING STATEMENT......................................................................5
SECTION 2.3 TERMINATION.......................................................................................6
Section 3. Distributions on Pledged Collateral...................................................................6
SECTION 3.1 INCOME DISTRIBUTIONS..............................................................................6
SECTION 3.2 PRINCIPAL PAYMENTS FOLLOWING TERMINATION EVENT....................................................6
SECTION 3.3 PRINCIPAL PAYMENTS PRIOR TO OR ON PURCHASE CONTRACT SETTLEMENT DATE...............................6
SECTION 3.4 PAYMENTS TO PURCHASE CONTRACT AGENT...............................................................7
SECTION 3.5 ASSETS NOT PROPERLY RELEASED......................................................................7
Section 4. Control...............................................................................................7
SECTION 4.1 ESTABLISHMENT OF COLLATERAL ACCOUNT................................................................7
SECTION 4.2 TREATMENT AS FINANCIAL ASSETS.....................................................................8
SECTION 4.3 SOLE CONTROL BY COLLATERAL AGENT..................................................................8
SECTION 4.4 SECURITIES INTERMEDIARY'S LOCATION................................................................8
SECTION 4.5 NO OTHER CLAIMS...................................................................................8
SECTION 4.6 INVESTMENT AND RELEASE............................................................................8
SECTION 4.7 STATEMENTS AND CONFIRMATIONS......................................................................9
SECTION 4.8 TAX ALLOCATIONS...................................................................................9
SECTION 4.9 NO OTHER AGREEMENTS...............................................................................9
SECTION 4.10 POWERS COUPLED WITH AN INTEREST..................................................................9
Section 5. Initial Deposit; Establishment of Treasury PEPS Units and Reestablishment of PEPS Units...............9
SECTION 5.1 INITIAL DEPOSIT OF TRUST PREFERRED SECURITIES.....................................................9
SECTION 5.2 ESTABLISHMENT OF TREASURY PEPS UNITS..............................................................9
SECTION 5.3 REESTABLISHMENT OF PEPS UNITS....................................................................11
SECTION 5.4 TERMINATION EVENT................................................................................12
SECTION 5.5 CASH SETTLEMENT..................................................................................14
SECTION 5.6 EARLY SETTLEMENT.................................................................................15
SECTION 5.7 APPLICATION OF PROCEEDS SETTLEMENT...............................................................15
SECTION 5.8 TAX EVENT REDEMPTION..............................................................................17
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Section 6. Voting Rights - Trust Preferred Securities and Pledged Senior Deferrable Note........................17
Section 7. Rights and Remedies..................................................................................17
SECTION 7.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT......................................................17
SECTION 7.2 SUBSTITUTION OF DEBENTURES.......................................................................19
SECTION 7.3 TAX EVENT REDEMPTION.............................................................................19
SECTION 7.4 SUBSTITUTIONS....................................................................................19
SECTION 8. REPRESENTATIONS AND WARRANTIES; COVENANTS...........................................................19
SECTION 8.1 REPRESENTATIONS AND WARRANTIES...................................................................19
SECTION 8.2 COVENANTS........................................................................................20
Section 9. The Collateral Agent and the Securities Intermediary.................................................20
SECTION 8.1 APPOINTMENT, POWERS AND IMMUNITIES...............................................................20
SECTION 9.2 INSTRUCTIONS OF THE COMPANY......................................................................21
SECTION 9.3 RELIANCE BY COLLATERAL AGENT AND SECURITIES INTERMEDIARY.........................................22
SECTION 9.4 RIGHTS IN OTHER CAPACITIES.......................................................................22
SECTION 9.5 NON-RELIANCE ON COLLATERAL AGENT AND SECURITIES INTERMEDIARY.....................................22
SECTION 9.6 COMPENSATION AND INDEMNITY.......................................................................23
SECTION 9.7 FAILURE TO ACT...................................................................................23
SECTION 9.8 RESIGNATION OF COLLATERAL AGENT AND SECURITIES INTERMEDIARY......................................24
SECTION 9.9 RIGHT TO APPOINT AGENT OR ADVISOR................................................................25
SECTION 9.10 SURVIVAL........................................................................................25
SECTION 9.11. EXCULPATION....................................................................................25
Section 10. Amendment...........................................................................................26
SECTION 10.1 AMENDMENT WITHOUT CONSENT OF HOLDERS............................................................26
SECTION 10.2 AMENDMENT WITH CONSENT OF HOLDERS...............................................................26
SECTION 10.3. EXECUTION OF AMENDMENTS........................................................................27
SECTION 10.4. EFFECT OF AMENDMENTS...........................................................................27
SECTION 10.5. REFERENCE TO AMENDMENTS........................................................................27
Section 11. Miscellaneous.......................................................................................28
SECTION 11.1 NO WAIVER.......................................................................................28
SECTION 11.2 GOVERNING LAW...................................................................................28
SECTION 11.3 NOTICES.........................................................................................28
SECTION 11.4 SUCCESSORS AND ASSIGNS..........................................................................28
SECTION 11.5 COUNTERPARTS....................................................................................29
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SECTION 11.6 SEVERABILITY....................................................................................29
SECTION 11.7 EXPENSES, ETC...................................................................................29
SECTION 11.8 SECURITY INTEREST ABSOLUTE......................................................................29
EXHIBIT A INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT (Establishment of Treasury PEPS Units)...1
EXHIBIT B INSTRUCTION FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY (Establishment of Treasury PEPS Units)...3
EXHIBIT C INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT (Reestablishment of PEPS Units ).........5
EXHIBIT D INSTRUCTION FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY (Reestablishment of PEPS Units)..........7
EXHIBIT E NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY TO PURCHASE CONTRACT AGENT (Cash Settlement
Amounts)..........................................................................................................9
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of September ____, 1999, among UtiliCorp
United Inc., a Delaware corporation (the "Company"), Chase Manhattan Trust
Company, a National Association, a national banking association, as collateral
agent (in such capacity, together with its successors in such capacity, the
"Collateral Agent"), Chase Manhattan Trust Company, National Association, a
national banking association, as securities intermediary with respect to the
Collateral Account (in such capacity, together with its successors in such
capacity, the "Securities Intermediary"), and Bank One Trust Company, NA, a
national banking association, as purchase contract agent and as
attorney-in-fact of the Holders from time to time of the Securities under the
Purchase Contract Agreement (in such capacity, together with its successors
in such capacity, the "Purchase Contract Agent").
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 there may be issued up to Premium Equity Participating Security
Units--PEPSSM Units (the "Securities").
Each PEPS Unit, at issuance, consists of a unit comprised of (a) a
stock purchase contract (the "Purchase Contract") under which (i) 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 UtiliCorp
United, Inc. common stock, par value $1.00 ("Common Stock") equal to the
Settlement Rate, and (ii) the Company will pay the Holder Purchase Contract
Payments and (b) beneficial ownership of a Trust Preferred Security (a
"Preferred Security") issued by UCU Capital Trust I (the "Trust"), having a
liquidation amount equal to the Stated Amount and maturing on November 16, 2004.
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 Account to secure the
Obligations.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact of the Holders from time to time of the Securities, agree as
follows:
SECTION 1. 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;
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(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", "Bankruptcy Code", "Board Resolution", "Business
Day", "Cash Settlement", "Certificate", "Early Settlement", "Early Settlement
Amount", "Early Settlement Date", "Holder", "Officers' Certificate", "Opinion of
Counsel", "Outstanding Securities", "PEPS Units", "Purchase Contract", "Purchase
Contract Payments", "Purchase Contract Settlement Date", "Purchase Price",
"Remarketing Agent", "Remarketing Agreement", "Senior Deferrable Notes",
"Settlement Rate", "Termination Event", "Treasury PEPS Units", and "Underwriting
Agreement";
(e) the following terms have the meanings assigned to them in the
Declaration: "Applicable Ownership Interest", "Applicable Principal Amount",
"Failed Remarketing", "Indenture", "Indenture Trustee", "Primary Treasury
Dealer", "Property Trustee", "Quotation Agent", "Redemption Amount", "Redemption
Price", "Tax Event", "Tax Event Redemption", "Tax Event Redemption Date", and
"Treasury Portfolio"; and
(f) the following terms have the meanings given to them in this section
1(f):
"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 Account" means the collective reference to:
(1) Securities Account No. entitled "Chase Manhattan Trust
Company, as Collateral Agent, Securities Account (UCU Capital
Trust I)" maintained by the Securities Intermediary for the Purchase
Contract Agent on behalf of and as attorney-in-fact for the Holders;
(2) all investment property and other financial assets from time
to time credited to the Collateral Account, including, without
limitation, (A) the Preferred Securities and security entitlements
relating thereto which are a component of the PEPS 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 PEPS Units from time
to time; (C) the Senior Deferrable Notes and security entitlements
relating thereto which are a component of the PEPS Units from time to
time, (D) any Treasury Securities and security entitlements relating
thereto delivered from time to time upon establishment of Treasury
PEPS Units in accordance
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with hereof and (E) payments made by Holders pursuant to Section 5.5
hereof (collectively, the "Collateral");
(3) 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
(4) all powers and rights now owned or hereafter acquired under
or with respect to the Collateral Account.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"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;
(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;
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(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 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 Preferred Securities" means the Preferred Securities and
security entitlements with respect thereto from time to time credited to the
Collateral Account and not then released from the Pledge.
"Pledged Senior Deferrable Notes" means Senior Deferrable Notes and
security entitlements with respect thereto from time to time credited to the
Collateral Account and not then released from the Pledge.
"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 ss. 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.
"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, an amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means:
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(1) in the case of certificated securities in registered form,
delivery as provided in ss. 8-301(a) of the UCC, indorsed to the
transferee or in blank by an effective endorsement;
(2) in the case of Treasury Securities, registration of the
transferee as the owner of such Treasury Securities on TRADES; and
(3) in the case of security entitlements, including, 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. 912833 FR6) which are the principal strips of the _____% U.S. Treasury
Securities which mature on November 15, 2002.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York from time to time.
"Value" means, with respect to any item of Collateral on any date, as
to (1) Cash, the face amount thereof and (2) Treasury Securities, the aggregate
principal amount thereof at maturity and (3) the Preferred Securities, the
liquidation amount thereto.
SECTION 2. PLEDGE.
SECTION 2.1. PLEDGE.
Each Holder, acting through the Purchase Contract Agent as such
Holder's 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 Holder's right, title and interest in and to the Collateral Account 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 2.2 CONTROL; FINANCING STATEMENT.
(a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of Section 4 of this Agreement.
(b) On the date of initial issuance of the Securities, the Purchase
Contract Agent shall deliver to the Collateral Agent a financing statement
prepared by the Company for filing in the Office of the Secretary of State of
the State of New York, signed by the Purchase Contract Agent, as attorney-in-
fact for the Holders, as Debtors, and describing the Collateral.
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SECTION 2.3 TERMINATION.
As to each Holder, this Agreement and the Pledge created hereby shall
terminate upon the satisfaction of such Holder's Obligations. Upon termination,
the Securities Intermediary shall Transfer 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.
SECTION 3. DISTRIBUTIONS ON PLEDGED COLLATERAL.
SECTION 3.1 INCOME DISTRIBUTIONS.
All income distributions received by the Securities Intermediary on
account of the Preferred Securities, the Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, the Senior Deferrable Notes or Permitted Investments from time to
time held in the Collateral Account shall be distributed to the Purchase
Contract Agent for the benefit of the applicable Holders as provided in the
Purchase Contracts or Purchase Contract Agreement.
SECTION 3.2 PRINCIPAL PAYMENTS FOLLOWING TERMINATION EVENT.
All payments received by the Securities Intermediary following a
Termination Event of (1) the liquidation amount of Pledged Preferred Securities
or securities entitlements thereto, or (2) the Applicable Ownership Interests
(as specified in Clause (A) of the definition thereof) of the Treasury
Portfolio, (3) the aggregate principal amount of the Pledged Senior Deferrable
Notes or securities entitlements thereto, or (4) 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.
SECTION 3.3 PRINCIPAL PAYMENTS PRIOR TO OR ON PURCHASE CONTRACT
SETTLEMENT DATE.
(a) Subject to the provisions of Section 7.2, and except as provided in
clause 3.3(b) below, if no Termination Event shall have occurred, all payments
received by the Securities Intermediary of (1) the liquidation amount with
respect to the Pledged Preferred Securities or security entitlements thereto,
(2) Applicable Ownership interests (as specified in Clause (A) of the definition
thereof) of the Treasury Portfolio, (3) the aggregate principal amount with
respect to the Pledged Senior Deferrable Notes or security entitlements thereto
or (4) 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 5.7 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.
(b) All payments received by the Securities Intermediary of (1) the
liquidation amount of Preferred Securities or security entitlements thereto, (2)
Applicable Ownership interests (as specified in Clause (A) of the definition
thereof) of the Treasury Portfolio, (3) the aggregate principal amount with
respect to the Pledged Senior Deferrable Notes or security
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entitlements thereto or (4) the principal amount of Treasury Securities or
security entitlements 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 3.4 PAYMENTS TO PURCHASE CONTRACT AGENT.
Payments to the Purchase Contract Agent hereunder shall be made 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 Securities Intermediary; provided, however, that if such payment
is received on a day that is not a Business Day or after 12:00 p.m. (New York
City time) on a Business Day, then such payment shall be made no later than
10:30 a.m. (New York City time) on the next succeeding Business Day.
SECTION 3.5 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
Securities Intermediary 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.
SECTION 4. CONTROL.
SECTION 4.1 ESTABLISHMENT OF COLLATERAL ACCOUNT.
The Securities Intermediary hereby confirms that:
(1) the Securities Intermediary has established the Collateral
Account;
(2) the Collateral Account is a securities account;
(3) subject to the terms of this Agreement, the Securities
Intermediary shall treat the Purchase Contract Agent as entitled to
exercise the rights that comprise any financial asset credited to the
Collateral Account;
(4) all property delivered to the Securities Intermediary
pursuant to this Agreement or the Purchase Contract Agreement will be
credited promptly to the Collateral Account;
(5) all securities or other property underlying any financial
assets credited to the Collateral Account shall be registered in the
name of the Securities Intermediary, indorsed to the Securities
Intermediary, or in blank or credited to another securities account
maintained in the name of the Securities Intermediary, and in no case
will any financial asset credited to the Collateral Account be
registered in the name of the
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Purchase Contract Agent or any Holder, payable to the order of the
Purchase Contract Agent or any Holder or specially indorsed to the
Purchase Contract Agent or any Holder.
SECTION 4.2 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 4.3 SOLE CONTROL BY COLLATERAL AGENT.
Except as provided in Section 6, 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 4.4 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 4.5 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 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 4.6 INVESTMENT AND RELEASE.
All proceeds of financial assets from time to time deposited in the
Collateral Account shall be invested and reinvested as provided in this
Agreement. At all times prior to termination of the Pledge, no property shall be
released from the Collateral Account except in accordance with this Agreement or
upon written instructions of the Collateral Agent.
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SECTION 4.7 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 4.8 TAX ALLOCATIONS.
All items of income, gain, expense and loss recognized in the
Collateral Account shall be reported to the Internal Revenue Service and all
state and local taxing authorities under the names and taxpayer identification
numbers of the Holders which are the beneficial owners thereof.
SECTION 4.9 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 Section 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 Section 4 shall
continue in effect until the termination of the Pledge.
SECTION 5. INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY PEPS UNITS AND
REESTABLISHMENT OF PEPS UNITS.
SECTION 5.1 INITIAL DEPOSIT OF TRUST PREFERRED SECURITIES.
Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
PEPS Units, shall Transfer to the Securities Intermediary, for credit to the
Collateral Account, the Preferred Securities or security entitlements relating
thereto, and the Securities Intermediary shall indicate by book-entry that a
securities entitlement to such Preferred Securities has been credited to the
Collateral Account.
SECTION 5.2 ESTABLISHMENT OF TREASURY PEPS UNITS.
(a) So long as no Tax Event Redemption shall have occurred, and the
Trust shall not have been dissolved and liquidated, at any time prior to or on
the seventh Business Day immediately preceding November 16, 2002, a Holder of
PEPS Units shall have the right to establish or reestablish Treasury PEPS Units
by substitution of Treasury Securities or security entitlements thereto for the
Pledged Preferred Securities comprising a part of such Holder's PEPS Units in
integral multiples of 40 PEPS Units by:
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(1) Transferring to the Securities Intermediary for credit to the
Collateral Account Treasury Securities or security entitlements
thereto having a Value equal to the aggregate liquidation amount of
the Pledged Preferred 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 A hereto, (A) stating that such Holder has Transferred
Treasury Securities or security entitlements thereto to the Securities
Intermediary for credit to the Collateral Account, (B) stating the
Value of the Treasury Securities or security entitlements thereto
Transferred by such Holder and (C) requesting that the Collateral
Agent release from the Pledge the Pledged Preferred Securities that
are a component of such PEPS Units; and
(2) delivering the related PEPS Units to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Treasury Securities
or security entitlements 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 Preferred 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 a Tax Event Redemption has occurred and the Treasury Portfolio
has become a component of the PEPS Units, a Holder of PEPS Units shall not have
the right to establish or reestablish Treasury PEPS Units.
(c) If no Tax Event Redemption shall have occurred, but the Trust shall
have been dissolved and liquidated, and the Senior Deferrable Notes have become
a component of the PEPS Units, at any time on or prior to the seventh Business
Day immediately preceding November 16, 2002, a Holder of PEPS Units shall have
the right to substitute Treasury Securities or security entitlements thereto for
the Pledged Senior Deferrable Notes comprising a part of such Holder's PEPS
Units in integral multiples of 40 PEPS Units by:
(1) Transferring to the Securities Intermediary for credit to the
Collateral Account Treasury Securities or security entitlements
thereto having a Value equal to the aggregate principal amount at
maturity of Pledged Senior Deferrable 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 thereto to the Securities
Intermediary for credit to the Collateral Account, (B) stating the
Value of the Treasury Securities or securities entitlements thereto
Transferred by such Holder and (C) requesting that the Collateral
Agent release from the Pledge the Pledged Senior Deferrable Notes that
are a component of such PEPS Units; and
(2) delivering the related PEPS Units to the Purchase Contract
Agent.
10
Upon receipt of such notice and confirmation that Treasury Securities
or security entitlements 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 Senior Deferrable 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.
(d) Upon credit to the Collateral Account of Treasury Securities or
security entitlements thereto delivered by a Holder of PEPS Units and receipt of
the related instruction from the Collateral Agent, the Securities Intermediary
shall release the Pledged Preferred Securities or the Pledged Senior Deferrable
Notes, as the case may be, 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 5.3 REESTABLISHMENT OF PEPS UNITS.
(a) So long as no Tax Event Redemption shall have occurred, and the
Trust shall not have been dissolved and liquidated, at any time on or prior to
the seventh Business Day immediately preceding November 16, 2002, a Holder of
Treasury PEPS Units shall have the right to reestablish PEPS Units by
substitution of Preferred Securities or security entitlements thereto for
Pledged Treasury Securities in integral multiples of 40 Treasury PEPS Units by:
(1) Transferring to the Securities Intermediary for credit to the
Collateral Account Preferred Securities or security entitlements
thereto having a liquidation 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 Trust Preferred
Securities or security entitlements thereto to the Securities
Intermediary for credit to the Collateral Account and requesting that
the Collateral Agent release from the Pledge the Pledged Treasury
Securities related to such Treasury PEPS Units; and
(2) Delivering the related Treasury PEPS Units to the Purchase
Contract Agent
Upon receipt of such notice and confirmation that Preferred Securities
or security entitlements 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 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 a Tax Event Redemption has occurred and the Treasury Portfolio
has become a component of the PEPS Units, a holder of a Treasury PEPS Unit shall
not have the right to reestablish a PEPS Unit.
(c) If no Tax Event Redemption shall have occurred, but the Trust shall
have been dissolved and liquidated, and the Senior Deferrable Notes have become
a component of the
11
PEPS Units, at any time on or prior to the seventh Business Day immediately
preceding November 16, 2002, a Holder of Treasury PEPS Units shall have the
right to reestablish PEPS Units by substitution of Senior Deferrable Notes or
security entitlements thereto for Pledged Treasury Securities in integral
multiples of 40 Treasury PEPS Units by:
(1) Transferring to the Securities Intermediary for credit to the
Collateral Account Senior Deferrable Notes or security entitlements
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 Senior Deferrable
Notes or security entitlements thereto to the Securities Intermediary
for credit to the Collateral Account and requesting that the
Collateral Agent release from the Pledge the Pledged Treasury
Securities related to such Treasury PEPS Units; and
(2) delivering the related Treasury PEPS Units to the Purchase
Contract Agent.
Upon receipt of such notice and confirmation that Senior Deferrable
Notes or security entitlements 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 to release
such Pledged Treasury Securities from 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.
(d) Upon credit to the Collateral Account of Preferred Securities or
security entitlements thereto or Senior Deferrable Notes or security
entitlements thereto, as the case may be, delivered by a Holder of Treasury PEPS
Units and receipt of the related instruction from the Collateral Agent, the
Securities Intermediary shall release the Pledged Treasury Securities 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 5.4 TERMINATION EVENT.
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that a Termination Event has occurred,
the Collateral Agent shall release all Collateral from the Pledge and shall
promptly Transfer:
(1) any Pledged Preferred Securities or the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio (if a Tax Event Redemption has occurred and
the Treasury Portfolio has become a component of the PEPS Units) or
the Pledged Senior Deferrable Notes (if the Trust has been dissolved
and liquidated, and the Senior Deferrable Notes or security
entitlements thereto have become a component of the PEPS Units);
(2) any Pledged Treasury Securities, and
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(3) payments by Holders (or the Permitted Investments of such
payments) pursuant to Section 5.5 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 Interest (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 Interest (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
Preferred Securities, the Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, the Pledged
Senior Deferrable Notes, the Pledged Treasury Securities or payments by Holders
(or the Permitted Investments of such payments) pursuant to Section 5.5 hereof,
as the case may be, as provided by this Section 5.4, the Purchase Contract Agent
shall:
(1) use its best efforts to obtain an opinion of a nationally
recognized law firm reasonably acceptable to the Collateral Agent to
the effect that, 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
5.4, 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 Preferred
Securities, Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio, all the
Pledged Senior Deferrable Notes, the Pledged Treasury Securities, the
payments by Holders or the Permitted Investments of such payments
pursuant to Section 5.5 hereof or the Proceeds of any of the
foregoing, as the case may be, as provided in this Section 5.4, 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 Preferred
Securities, Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio, all the
Pledged Senior Deferrable Notes, the Pledged Treasury Securities, or
the payments by Holders or the Permitted Investments of such payments
pursuant to Section 5.5 hereof, or as the case may be, as provided by
this Section 5.4; or
(2) commence an action or proceeding like that described in
clause 5.4(b)(1)(B) hereof within ten days after the occurrence of
such Termination Event.
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SECTION 5.5 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 PEPS Units that such Holder has elected, in
accordance with the procedures specified in Section 5.4(a)(i) or (d)(i) of the
Purchase Contract Agreement, respectively, to effect a Cash Settlement and (2)
payment by such Holder by deposit in the Collateral Account prior to or on 11:00
a.m. (New York City time) on the fifth Business Day immediately preceding
November 16, 2002, in the case of a PEPS Unit, unless a Tax Event Redemption has
occurred, or on the Business Day prior to November 16, 2002, in the case of
Treasury PEPS or a PEPS Unit, if a Tax Event Redemption has occurred 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:
(1) instruct the Securities Intermediary promptly to invest any
such Cash in Permitted Investments;
(2) release from the Pledge the PEPS Unit holder's or the
Treasury PEPS Unit holder's related Pledged Preferred Securities,
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, the Pledged Senior
Deferrable Notes or Pledged Treasury Securities, as applicable, as to
which such Holder has elected to effect a Cash Settlement pursuant to
this Section 5.5(a); and
(3) instruct the Securities Intermediary to Transfer all such
Pledged Preferred Securities, Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, Pledged Senior Deferrable Notes 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.
Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Purchase Contract Settlement Date, the Collateral Agent shall
(A) instruct the Securities Intermediary to pay the portion of such proceeds and
deliver any certified or cashier's checks received, in an aggregate amount equal
to the Purchase Price, to the Company on the Purchase Contract Settlement Date,
and (B) instruct the Securities Intermediary to release any amounts in excess of
the Purchase Price earned from such Permitted Investments to the Purchase
Contract Agent for distribution to the such Holder.
(b) If a Holder of PEPS Units (if a Tax Event Redemption shall not have
occurred) notifies the Purchase Contract Agent as provided in paragraph
5.4(a)(i) of the Purchase Contract Agreement of its intention to pay the
Purchase Price in cash, but fails to make such payment as required by paragraph
5.4(a)(ii) of the Purchase Contract Agreement, such Holder shall be deemed to
have consented to the disposition of such Holder's Pledged Preferred Securities
or Pledged Senior Deferrable Notes in accordance with paragraph 5.4(a)(iii) of
the Purchase Contract Agreement.
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(c) If a Holder of a Treasury PEPS Unit or a Holder of PEPS Unit (if a
Tax Event Redemption shall have occurred) notifies the Purchase Contract Agent
as provided in paragraph 5.4(d)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by paragraph 5.4(d)(ii) of the Purchase Contract Agreement, such Holder
shall be deemed to have elected to pay the Purchase Price in accordance with
paragraph 5.4(d)(iii) of the Purchase Contract Agreement.
(d) As soon as practicable after 11:00 a.m. (New York City time) on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
the Securities Intermediary 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 PEPS Units and
(ii) the amount of cash that it has received with respect to the Cash Settlement
of Treasury PEPS Units.
SECTION 5.6 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 5.9 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 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 Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definitions at such term) of the
Treasury Portfolio or Pledged Senior Deferrable Notes in the case of a Holder of
PEPS Units or (2) Pledged Treasury Securities, in the case of a Holder of
Treasury PEPS Units, 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 Preferred Securities or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definitions at such term)
of the Treasury Portfolio or Pledged Senior Deferrable 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.
SECTION 5.7 APPLICATION OF PROCEEDS SETTLEMENT.
(a) If a Holder of PEPS Units (if a Tax Event Redemption has not
occurred) has not elected to make an effective Cash Settlement by notifying the
Purchase Contract Agent in the manner provided for in Section 5.4(a)(i) in the
Purchase Contract Agreement, or has given such notice but failed to deliver the
required cash prior to 11:00 A.M. (New York City time) on the fifth Business Day
immediately preceding November 16, 2002, 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 Preferred
Securities or Pledged Senior Deferrable Notes. In such event, the Collateral
Agent shall instruct the Securities
15
Intermediary to Transfer the related Pledged Preferred Securities or Pledged
Senior Deferrable Notes to the Remarketing Agent for remarketing. Upon receiving
such Pledged Preferred Securities or Pledged Senior Deferrable Notes, the
Remarketing Agent, pursuant to the terms of the Remarketing Agreement, will use
reasonable efforts to remarket such Pledged Preferred Securities or Pledged
Senior Deferrable Notes. The Remarketing Agent will deposit the Proceeds of such
remarketing in the Collateral Account. On the Purchase Contract Settlement Date,
the Collateral Agent shall instruct the Securities Intermediary to apply a
portion of the Proceeds from such remarketing equal to (i) the aggregate
liquidation amount of the Preferred Securities or aggregate principal amount of
such Pledged Senior Deferrable Note 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 (ii) to the number of Preferred Securities or
Pledged Senior Deferrable Notes remarketed by the Remarketing Agent multiplied
by .0625 to pay the Remarketing Agent for its services in connection with the
remarketing. The balance of the Proceeds from the remarketing, if any, shall be
transferred to the Purchase Contract Agent for the benefit of such Holder for
distribution to such Holder.
If the Remarketing Agent advises the Collateral Agent in writing that
there has been a Failed Remarketing, thus 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, dispose
of the Pledged Preferred Securities or Pledged Senior Deferrable Notes in
accordance with applicable law and satisfy in full, from such disposition, such
Holder's obligations to pay the Purchase Price for the shares of Common Stock.
(b) If a Holder of a Treasury PEPS Unit or a Holder of PEPS Unit (if 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 5.4(d)(i) of the Purchase Contract Agreement, or has given such
notice but failed to make such payment in the manner required by Section
5.4(d)(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 such Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be. After
11:00 a.m. (New York City time) on the Business Day immediately prior to the
Purchase Contract Settlement Date, the Securities Intermediary, at the written
direction of the Collateral Agent, shall invest the Cash Proceeds of the
maturing Pledged Treasury Securities or such Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
portfolios, as the case may be, in Permitted Investments. Without receiving any
instruction from any such Holder, the Collateral Agent shall apply the Proceeds
of the related Pledged Treasury Securities or such Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, 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 such Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio as the case may be, and the investment earnings from the investment in
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.
16
SECTION 5.8 TAX EVENT REDEMPTION. If the Tax Event Redemption shall
occur prior to the Purchase Contract Settlement Date, the Securities
Intermediary shall apply the Redemption Amount to purchase the Treasury
Portfolio and the Securities Intermediary shall credit the Applicable Ownership
Interest (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 distribution to the
Holders of the PEPS 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 liquidation
amount of the Pledged Preferred Securities or the aggregate principal amount of
the Pledged Senior Deferrable Notes, the Securities Intermediary shall release
the Pledged Preferred Securities or the Pledged Senior Deferrable Notes, as
applicable, from the Collateral Account and shall promptly transfer the Pledged
Preferred Securities to the Trust and the Pledged Senior Deferrable Notes to the
Company, as applicable.
SECTION 6. VOTING RIGHTS - TRUST PREFERRED SECURITIES AND PLEDGED SENIOR
DEFERRABLE NOTES
The Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the Pledged
Preferred Securities or the Pledged Senior Deferrable Note 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 Preferred Securities or the Pledged
Senior Deferrable 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 Preferred Securities
or the Pledged Senior Deferrable Notes, including notice of any meeting at which
holders of the Preferred Securities or the Pledged Senior Deferrable Notes are
entitled to vote or solicitation of consents, waivers or proxies of holders of
the Preferred Securities or Senior Deferrable 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 Preferred Securities or the Pledged Senior Deferrable Notes (in
form and substance satisfactory to the Collateral Agent) as are prepared by the
Purchase Contract Agent with respect to the Pledged Preferred Securities or the
Pledged Senior Deferrable Notes.
SECTION 7. RIGHTS AND REMEDIES.
SECTION 7.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT.
(a) In addition to the rights and remedies specified in Section 5.7
hereof or otherwise available at law or in equity, after an event of default (as
specified in Section 7.1(b) below) hereunder, the Collateral Agent shall have
all of the rights and remedies with respect to the
17
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 Preferred Securities, Pledged Senior Deferrable
Notes, Pledged Treasury Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) in full
satisfaction of the Holders' obligations under the Purchase Contracts and the
Purchase Contract Agreement or (2) sale of the Pledged Preferred Securities,
Pledged Senior Deferrable Notes, Pledged Treasury Securities or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, or on account of principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof, in satisfaction of the
Obligations of the Holder of the PEPS Units (if a Tax Event Redemption has
occurred) of which such appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio or the
Holder of the Treasury PEPS Units of which such Pledged Treasury Securities, as
applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, 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 liquidation amount of
the Pledged Preferred Securities, (ii) the principal amount of the Pledged
Senior Deferrable Notes, (iii) the principal amount of the Pledged Treasury
Securities and (iv) the principal amount of the Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, subject, in each case, to the provisions of Section 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 negligent acts, its own negligent
failure to act or its own willful misconduct.
18
SECTION 7.2 SUBSTITUTION OF SENIOR DEFERRABLE NOTES. If the Trust shall
have been dissolved and liquidated prior to the Purchase Contract Settlement
Date, the Securities Intermediary shall transfer to the Collateral Agent Senior
Deferrable Notes having a Value equal to the liquidation amount of the Pledged
Preferred Securities for credit to the Collateral Account. Upon credit to the
Collateral Account of such Senior Deferrable Notes, the Collateral Agent shall
release the Pledged Preferred Securities from the Collateral Account and shall
promptly transfer the same to the Trust.
SECTION 7.3 TAX EVENT REDEMPTION. Upon the occurrence of a Tax Event
Redemption prior to the Purchase Contract Settlement Date, the Redemption Price
payable on the Tax Event Redemption Date with respect to the Applicable
Principal Amount shall be credited to the Collateral Account by the Property
Trustee or, upon a dissolution of the Trust and the distribution of the related
Senior Deferrable Notes, by the Indenture Trustee, on or prior to 12:30 p.m.,
New York City time, by federal funds check or wire transfer of immediately
available funds. The Collateral Agent is hereby authorized to present the
Pledged Preferred Securities or the Pledged Senior Deferrable Notes for payment
as may be required by their respective terms. Upon receipt of such funds, the
Pledged Preferred Securities or Pledged Senior Deferrable Notes, as the case may
be, 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 Redemption Price to
purchase the Treasury Portfolio from the Quotation Agent for credit to the
Collateral Account and (b) promptly remit the remaining portion of such
Redemption Price, if any, to the Purchase Contract Agent for payment to the
Holders of PEPS Units.
SECTION 7.4 SUBSTITUTIONS. Whenever a Holder has the right to
substitute Treasury Securities, Trust Preferred Securities, Senior Deferrable
Notes or security entitlements for any of them or the appropriate Applicable
Ownership Interest 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.
SECTION 8. REPRESENTATIONS AND WARRANTIES; COVENANTS.
SECTION 8.1 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:
(1) such Holder has the power to grant a security interest in and
lien on the Collateral;
(2) 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
19
sole beneficial owner of, or has the right to Transfer, the Collateral
it Transfers to the Securities Intermediary 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 Section 2 hereof;
(3) upon the Transfer of the Collateral to the Securities
Intermediary 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 Section
4 hereof); and
(4) 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 Section 2
hereof or violate any provision of any existing law or regulation
applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on
it or any of its assets.
SECTION 8.2 COVENANTS.
The Holders from time to time, acting through the 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:
(1) 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
(2) 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.
SECTION 9. THE COLLATERAL AGENT AND THE SECURITIES INTERMEDIARY.
It is hereby agreed as follows:
SECTION 9.1 APPOINTMENT, POWERS AND IMMUNITIES.
The Collateral Agent shall act as agent for the Company hereunder with
such powers as are specifically vested in the Collateral Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. The Collateral Agent shall:
20
(1) 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, nor
shall the Collateral Agent be bound by the provisions of any agreement
by any party hereto beyond the specific terms hereof;
(2) not be responsible for any recitals contained in this
Agreement, or in any certificate or other document referred to or
provided for in, or received by it under, this Agreement, the
Securities or the Purchase Contract Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement (other than as against the Collateral Agent), the
Securities or the Purchase Contract Agreement or any other document
referred to or provided for herein or therein or for any failure by
the Company or any other Person (except the Collateral Agent) 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;
(3) not be required to initiate or conduct any litigation or
collection proceedings hereunder (except pursuant to directions
furnished under Section 9.2 hereof, subject to Section 9.6 hereof);
(4) not be responsible for any action taken or omitted to be
taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith or
therewith, except for its own negligence or willful misconduct; and
(5) 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 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 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 be liable for any amount in excess of the Value of the Collateral.
Notwithstanding the foregoing, each of the Collateral Agent and the 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 9.2 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 and (ii)
the Collateral
21
Agent shall be adequately indemnified as provided herein. Nothing contained in
this Section 9.2 shall impair the right of the Collateral Agent in its
discretion to take any action or omit to take any action which it deems proper
and which is not inconsistent with such direction.
SECTION 9.3 RELIANCE BY COLLATERAL AGENT AND SECURITIES INTERMEDIARY.
Each of the Securities Intermediary 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
telecopy, telex or facsimile) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons
(without being required to determine the correctness of any fact stated therein)
and upon advice and statements of legal counsel and other experts selected by
the Collateral Agent and the Securities Intermediary. As to any matters not
expressly provided for by this Agreement, the Collateral 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 9.4 RIGHTS IN OTHER CAPACITIES.
The Collateral 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 or the Securities Intermediary, as the case may be, and the
Collateral 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 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 9.5 NON-RELIANCE ON COLLATERAL AGENT AND SECURITIES
INTERMEDIARY.
Neither the Securities Intermediary nor 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. Neither the Collateral
Agent nor 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 or the Securities Intermediary or any of
their respective affiliates.
22
SECTION 9.6 COMPENSATION AND INDEMNITY.
The Company agrees to:
(1) pay the Collateral 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; and
(2) indemnify the Collateral Agent and the Securities
Intermediary for, and hold each of them harmless from and against, any
loss, liability or reasonable out-of-pocket expense incurred without
negligence, willful misconduct or bad faith on its part, arising out
of or in connection with the acceptance or administration of its
powers and duties under this Agreement, including the reasonable
out-of-pocket costs and expenses (including reasonable fees and
expenses of counsel) of defending itself against any claim or
liability in connection with the exercise or performance of such
powers and duties.
SECTION 9.7 FAILURE TO ACT.
In the event of any ambiguity in the provisions of this Agreement or
any dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent and the Securities Intermediary shall be entitled, after prompt
notice to the Company and the Purchase Contract Agent, at its sole option, to
refuse to comply with any and all claims, demands or instructions with respect
to such property or funds so long as such dispute or conflict shall continue,
and the Collateral 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 and the Securities Intermediary shall be entitled to refuse to act until
either:
(1) such conflicting or adverse claims or demands shall have been
finally determined by a court of competent jurisdiction or settled by
agreement between the conflicting parties as evidenced in a writing
satisfactory to the Collateral Agent or the Securities Intermediary;
or
(2) the Collateral 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 and the Securities Intermediary may in addition elect to
commence an interpleader action or seek other judicial relief or orders as the
Collateral Agent or the Securities Intermediary may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor 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.
23
SECTION 9.8 RESIGNATION OF COLLATERAL AGENT AND SECURITIES
INTERMEDIARY.
(a) Subject to the appointment and acceptance of a successor Collateral
Agent as provided below:
(1) the Collateral Agent 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;
(2) the Collateral Agent may be removed at any time by the
Company; and
(3) if the Collateral Agent 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 may be removed by the Purchase Contract Agent.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Collateral Agent pursuant to clause (3) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall have the right
to appoint a successor Collateral Agent. If no successor Collateral Agent shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's giving of notice of resignation or the
Company or the Purchase Contract Agent giving notice of such removal, then the
retiring Collateral Agent may petition any court of competent jurisdiction for
the appointment of a successor Collateral Agent. The Collateral Agent shall be a
bank which has an office in New York City with a combined capital and surplus of
at least $50,000,000 and shall not be the Purchase Contract Agent or any of its
affiliates. Upon the acceptance of any appointment as Collateral Agent hereunder
by a successor Collateral Agent, such successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent, and the retiring Collateral Agent shall take
all appropriate action to transfer any money and property held by it hereunder
(including the Collateral) to such successor Collateral Agent. The retiring
Collateral Agent shall, upon such succession, be discharged from its duties and
obligations as Collateral Agent hereunder. After any retiring Collateral Agent's
resignation hereunder as Collateral Agent, the provisions of this Section 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.
(b) Subject to the appointment and acceptance of a successor Securities
Intermediary as provided below:
(1) 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;
(2) the Securities Intermediary may be removed at any time by the
Company; and
(3) if 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
24
receiving written notice of such failure by the Purchase Contract Agent
and such failure shall be continuing, the Securities Intermediary may
be removed by the Purchase Contract Agent.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Securities Intermediary pursuant to clause (3) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall have the right
to appoint a successor Securities Intermediary. If no successor Securities
Intermediary shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Securities Intermediary's giving
of notice of resignation or the Company or the Purchase Contract Agent giving
notice of such removal, then the retiring Securities Intermediary may petition
any court of competent jurisdiction for the appointment of a successor
Securities Intermediary. The Securities Intermediary shall be a bank which has
an office in New York City with a combined capital and surplus of at least
$50,000,000 and shall not be the Purchase Contract Agent or any of its
affiliates. Upon the acceptance of any appointment as Securities Intermediary
hereunder by a successor Securities Intermediary, such successor Securities
Intermediary shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Securities Intermediary, and the
retiring Securities Intermediary shall take all appropriate action to transfer
any money and property held by it hereunder (including the Collateral) to such
successor Securities Intermediary. The retiring Securities Intermediary shall,
upon such succession, be discharged from its duties and obligations as
Securities Intermediary hereunder. After any retiring Securities Intermediary's
resignation hereunder as Securities Intermediary, the provisions of this Section
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 Securities Intermediary.
SECTION 9.9 RIGHT TO APPOINT AGENT OR ADVISOR.
The Collateral Agent shall have the right to appoint agents or advisors
in connection with any of its duties hereunder, and the Collateral Agent shall
not be liable for any action taken or omitted by, or in reliance upon the advice
of, such agents or advisors selected in good faith. The appointment of agents
pursuant to this Section 9.9 shall be subject to prior consent of the Company,
which consent shall not be unreasonably withheld.
SECTION 9.10 SURVIVAL.
The provisions of this Section 9 shall survive termination of this
Agreement and the resignation or removal of the Collateral 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 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 lost profits, whether or not the likelihood of
such loss or damage was known to the Collateral Agent or the Securities
Intermediary, or any of them, incurred without any act or deed that is found to
be attributable to
25
negligence or willful misconduct on the part of the Collateral Agent or the
Securities Intermediary.
SECTION 10. AMENDMENT.
SECTION 10.1 AMENDMENT WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, the Collateral 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 Securities Intermediary and the Purchase
Contract Agent, to:
(1) evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company;
(2) evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or
Purchase Contract Agent;
(3) 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
(4) 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.
SECTION 10.2 AMENDMENT WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of such Holders delivered to
the Company, the Purchase Contract Agent, the Securities Intermediary or the
Collateral Agent, as the case may be, the Company, when duly authorized, the
Purchase Contract 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:
(1) Change the amount or type of Collateral underlying a Security
(except for the rights of holders of PEPS Units to substitute the
Treasury Securities for the Pledged Preferred Securities or the
Pledged Senior Deferrable Notes, as the case may be, or the rights of
Holders of Treasury PEPS Units to substitute Preferred Securities or
Senior Deferrable Notes, 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
26
(2) 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 an
agreement supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment; provided that if any
amendment or proposal referred to above would adversely affect only
the PEPS Units or only the Treasury PEPS 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 (1)
through (3) 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 10.3 EXECUTION OF AMENDMENTS.
In executing any amendment permitted by this Section, the Collateral
Agent, the Securities Intermediary and the Purchase Contract Agent shall be
entitled to receive and (subject to Section 7.1 of the Purchase Contract
Agreement with respect to the Purchase Contract Agent) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such amendment have been
satisfied.
SECTION 10.4 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 10.5 REFERENCE TO 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 Outstanding
Security Certificates.
27
SECTION 11. MISCELLANEOUS.
SECTION 11.1 NO WAIVER.
No failure on the part of 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 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 11.2 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. The Company, the Collateral Agent, the
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 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 11.3 NOTICES.
All notices, requests, consents and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing (including,
without limitation, by telecopy) delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof or,
as to any party, at such other address as shall be designated by such party in a
notice to the other parties. Except as otherwise provided in this Agreement, all
such communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
SECTION 11.4 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
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.
28
SECTION 11.5 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
SECTION 11.6 SEVERABILITY.
If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be 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 11.7 EXPENSES, ETC.
The Company agrees to reimburse the Collateral Agent and the Securities
Intermediary for:
(1) all reasonable out-of-pocket costs and expenses of the
Collateral Agent and the Securities Intermediary (including, without
limitation, the reasonable fees and expenses of counsel to the
Collateral 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;
(2) all reasonable costs and expenses of the Collateral 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 11.7;
(3) and all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority
in respect of this Agreement or any other document referred to herein
and all costs, expenses, taxes, assessments and other charges incurred
in connection with any filing, registration, recording or perfection
of any security interest contemplated hereby.
SECTION 11.8 SECURITY INTEREST ABSOLUTE.
All rights of the Collateral Agent and security interests hereunder,
and all obligations of the Holders from time to time hereunder, shall be
absolute and unconditional irrespective of:
(1) any lack of validity or enforceability of any provision of
the Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
29
(2) 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
(3) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
- ---------------------------------- -----------------------------------------
UTILICORP UNITED INC. BANK ONE TRUST COMPANY, NA, as
Purchase Contract Agent and as attorney-
in-fact of the Holders from time to time
of the Securities
By: By:
------------------------------ ------------------------------
Name: Dale J. Wolf Name:
Title: Vice President Finance, Title:
Treasurer, and
Corporate Secretary
Address for Notices: Address for Notices:
20 West Ninth Street One North State Street, Ninth Floor
Kansas City, Missouri 64105 Chicago, Illinois 60602
Attention: Dale J. Wolf Attention: Corporate Trust Administration
Telecopy: Telecopy: (312) 407-1708
- ---------------------------------- -----------------------------------------
THE CHASE MANHATTAN BANK, THE CHASE MANHATTAN BANK,
as Collateral Agent as Securities Intermediary
By: By:
------------------------------ ------------------------------
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
450 West 33rd Street 450 West 33rd Street
New York, New York 10001 New York, New York 10001
Attention: Corporate Trust Group Attention: Corporate Trust Group
Telecopy: (212) 946-8159 Telecopy: (212) 946-8159
31
EXHIBIT A
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Establishment of Treasury PEPS Units)
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trust Group
Telecopy: (212) 946-8159
Re: PEPS Units of UtiliCorp United Inc. (the "Company") and
UCU Capital Trust I
Please refer to the Pledge Agreement, dated as of September ____, 1999
(the "Pledge Agreement"), among the Company, you, as Collateral Agent, The Chase
Manhattan Bank, as Securities Intermediary, and the undersigned, as Purchase
Contract Agent and as attorney-in-fact for the holders of PEPS 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 5.2 of the Pledge
Agreement that the holder of securities named below (the "Holder") has elected
to substitute $__________ Value of Treasury Securities or security entitlements
thereto in exchange for [an equal Value of [Pledged Preferred Securities]
[Pledged Senior Deferrable Notes] relating to _________ PEPS Units] and has
delivered to the undersigned a notice stating that the Holder has Transferred
such Treasury Securities or security entitlements 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 Preferred Securities] [Pledged Senior Deferrable Notes]] in
accordance with Section 5.2 of the Pledge Agreement.
BANK ONE TRUST COMPANY, NA
Date:
-------------------
By:
--------------------------------
Name:
Title:
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements thereto for the [Pledged Preferred
Securities] [Pledged Senior Deferrable Notes]:
- -------------------------------------- --------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
- --------------------------------------
Address
- --------------------------------------
- --------------------------------------
EXHIBIT B
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Establishment of Treasury PEPS Units)
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trust Group
Telecopy: (212) 946-8159
Re: PEPS Units of UtiliCorp United Inc. (the "Company") and UCU
Capital Trust I Securities Account No. ______ entitled "The
Chase Manhattan Bank," as Collateral Agent, Securities Account
("UCU Capital Trust I")" (the "Collateral Account")
Please refer to the Pledge Agreement, dated as of September _____, 1999
(the "Pledge Agreement"), among the Company, you, as Securities Intermediary,
Bank One Trust Company, NA, as Purchase Contract Agent and as attorney-in-fact
for the holders of PEPS 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 $__________ Value of Treasury Securities
or security entitlements thereto has been credited to the Collateral Account by
or for the benefit of _________, as Holder of PEPS Units (the "Holder"), you are
hereby instructed to release from the Collateral Account [an equal Value of
[Preferred Securities or security entitlements thereto] [Senior Deferrable Notes
or security entitlements thereto]] relating to _____ PEPS Units of the Holder]
by Transfer to the Purchase Contract Agent.
THE CHASE MANHATTAN BANK
Dated:
-------------
By:
-----------------------------
Name:
Title:
Please print name and address of Holder:
- -------------------------------------- --------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
- --------------------------------------
Address
- --------------------------------------
- --------------------------------------
EXHIBIT C
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Reestablishment of PEPS Units )
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trust Group
Telecopy: (212) 946-8159
Re: PEPS Units of UtiliCorp United Inc. (the "Company")
and UCU Capital Trust I
Please refer to the Pledge Agreement dated as of September _____, 1999
(the "Pledge Agreement"), among the Company, you, as Collateral Agent, The Chase
Manhattan Bank, as Securities Intermediary, and the undersigned, as Purchase
Contract Agent and as attorney-in-fact for the holders of PEPS Units from time
to time. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.3(a) of the Pledge
Agreement that the holder of securities listed below (the "Holder") has elected
to substitute [$_______ Value of [Preferred Securities or security entitlements
thereto] [Senior Deferrable Notes or security entitlements thereto]] in exchange
for $_______ Value of Pledged Treasury Securities and has delivered to the
undersigned a notice stating that the holder has Transferred such [Preferred
Securities or security entitlements thereto] [Senior Deferrable Notes or
security entitlements thereto] to the Securities Intermediary, for credit to the
Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such [Preferred Securities or security entitlements thereto]
[Senior Deferrable Notes or security entitlements thereto] have been credited to
the Collateral Account, to release to the undersigned $__________ Value of
Treasury Securities or security entitlements thereto related to _____ PEPS Units
of such Holder in accordance with Section 5.3(a) of the Pledge Agreement.
BANK ONE TRUST COMPANY, NA
Date: By:
------------ -------------------------------
Name:
Title:
Please print name and address of Holder electing to substitute [Preferred
Securities or security entitlements thereto] [Pledged Senior Deferrable Notes or
security entitlements thereto] for Pledged Treasury Securities:
- -------------------------------------- --------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
- --------------------------------------
Address
- --------------------------------------
- --------------------------------------
EXHIBIT D
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Reestablishment of PEPS Units)
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trust Group
Telecopy: (212) 946-8159
Re: ______ PEPS Units of UtiliCorp United Inc.
(the "Company") and UCU Capital Trust I
Securities Account No. ________ entitled "The Chase Manhattan
Bank, as Collateral Agent, Securities Account
UCU Capital Trust I)" (the "Collateral Account")
Please refer to the Pledge Agreement dated as of September ____, 1999
(the "Pledge Agreement"), among the Company, you, as Securities Intermediary,
Bank One Trust Company, NA, as Purchase Contract Agent and as attorney-in-fact
for the holders of PEPS 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 [Preferred
Securities or security entitlements thereto] [Senior Deferrable Notes or
security entitlements thereto] has been credited to the Collateral Account by or
for the benefit of ________________, as Holder of PEPS 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.
BANK ONE TRUST COMPANY, NA.
Dated: By:
-------------------- -------------------------------
Name:
Title:
- -------------------------------------- --------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
- --------------------------------------
Address
- --------------------------------------
- --------------------------------------
EXHIBIT E
NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY
TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
Bank One Trust Company, NA
One North State Street, Ninth Floor
Chicago, Illinois 60602
Attention: Corporate Trust Administration
Telecopy: (312) 407-1708
Re: ______ PEPS Units of UtiliCorp United Inc.
(the "Company") and UCU Capital Trust I
Please refer to the Pledge Agreement dated as of September ____, 1999
(the "Pledge Agreement"), by and among you, the Company, The Chase Manhattan
Bank, as Collateral Agent and the undersigned, as Securities Intermediary.
Unless otherwise defined herein, terms defined in the Pledge Agreement are used
herein as defined therein.
In accordance with Section 5.5(d) of the Pledge Agreement, we hereby
notify you that as of 11:00 a.m., (on the fifth Business Day immediately
preceding November 16, 2000), we have received (i) $ _______________ in
immediately available funds paid in an aggregate Amount equal to the Purchase
Price to the Company on the Purchase Contract Settlement Date with respect to
________________ PEPS Units and (ii) $ ___________ in immediately available
funds paid in an aggregate amount equal to the Purchase Price to the Company on
the Purchase Contract Settlement Date with respect to ______ Treasury PEPS
Units.
THE CHASE MANHATTAN BANK
Date: By:
-------------- ---------------------------------
Name:
Title: