EXHIBIT 4(j)
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TXU CORP.
AND
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AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
THE BANK OF NEW YORK
AS PURCHASE CONTRACT AGENT
PLEDGE AGREEMENT
DATED AS OF ____________
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TABLE OF CONTENTS
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Page No.
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ARTICLE I. DEFINITIONS.........................................................2
ARTICLE II. PLEDGE; CONTROL AND PERFECTION.....................................6
Section 2.1 The Pledge.................................................6
Section 2.2 Control and Perfection.....................................7
ARTICLE III. DISTRIBUTIONS ON PLEDGED COLLATERAL...............................8
ARTICLE IV. SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF
DEBT SECURITIES..................................................10
Section 4.1 Substitution for Debt Securities and the Creation of
Treasury Units.............................................10
Section 4.2 Substitution for Treasury Securities and the Creation of
Corporate Units............................................11
Section 4.3 Termination Event...........................................12
Section 4.4 Cash Settlement.............................................13
Section 4.5 Early Settlement............................................14
Section 4.6 Application of Proceeds; Settlement.........................15
ARTICLE V. VOTING RIGHTS -- DEBT SECURITIES...................................16
ARTICLE VI. RIGHTS AND REMEDIES; SUBSTITUTION OF A TREASURY
PORTFOLIO FOR DEBT SECURITIES....................................17
Section 6.1 Rights and Remedies of the Collateral Agent.................17
Section 6.2 Substitution of a Treasury Portfolio for Debt
Securities.................................................18
Section 6.3 Initial Remarketing.........................................19
Section 6.4 Substitutions...............................................20
ARTICLE VII. REPRESENTATIONS AND WARRANTIES; COVENANTS........................20
Section 7.1 Representations and Warranties..............................20
Section 7.2 Covenants...................................................21
ARTICLE VIII. THE COLLATERAL AGENT............................................21
Section 8.1 Appointment, Powers and Immunities..........................21
Section 8.2 Instructions of the Company.................................22
Section 8.3 Reliance by Collateral Agent................................22
Section 8.4 Rights in Other Capacities..................................23
Section 8.5 Non-Reliance on Collateral Agent............................23
Section 8.6 Compensation and Indemnity..................................23
Section 8.7 Failure to Act..............................................24
Section 8.8 Resignation of Collateral Agent.............................24
Section 8.9 Right to Appoint Agent or Advisor...........................25
Section 8.10 Survival....................................................25
Section 8.11 Exculpation.................................................25
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ARTICLE IX. AMENDMENT.........................................................25
Section 9.1 Amendment Without Consent of Holders........................25
Section 9.2 Amendment with Consent of Holders...........................26
Section 9.3 Execution of Amendments.....................................27
Section 9.4 Effect of Amendments........................................27
Section 9.5 Reference to Amendments.....................................27
ARTICLE X. MISCELLANEOUS......................................................27
Section 10.1 No Waiver...................................................27
Section 10.2 Governing Law...............................................27
Section 10.3 Notices.....................................................28
Section 10.4 Successors and Assigns......................................28
Section 10.5 Counterparts................................................28
Section 10.6 Severability................................................28
Section 10.7 Expenses, etc...............................................29
Section 10.8 Security Interest Absolute..................................29
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of ____________ (this "Agreement"), by and
among TXU Corp., a Texas corporation (the "Company"), as pledgee,
___________________, a New York banking corporation, not individually but solely
as collateral agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent"), as custodial agent (in such capacity,
together with its successors in such capacity, the "Custodial Agent") and as a
"securities intermediary" as defined in Section 8-102(a)(14) of the Code (as
defined herein) (in such capacity, together with its successors in such
capacity, the "Securities Intermediary"), and The Bank of New York, a New York
banking corporation, not individually but solely as purchase contract agent and
as attorney-in-fact of the Holders (as defined in the Purchase Contract
Agreement) from time to time of the Securities (as hereinafter defined) (in such
capacity, together with its successors in such capacity, the "Purchase Contract
Agent") under the Purchase Contract Agreement (as hereinafter defined).
RECITALS
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 __________ new
securities (the "Securities") of the Company. Terms not otherwise defined herein
are used herein with the meaning ascribed to them in the Purchase Contract
Agreement.
The Securities will initially consist of _________ units (referred to
as "Equity Units") with a stated amount, per Equity Unit, equal to $__ (the
"Stated Amount"). The Equity Units will initially consist of _________ Corporate
Units and _ Treasury Units. Each Corporate Unit will initially be comprised of
(a) a stock purchase contract (as modified and supplemented and in effect from
time to time, a "Purchase Contract") under which (i) the Holder will purchase
from the Company not later than ____________ ("Purchase Contract Settlement
Date"), for $__ in cash, a number of newly issued shares of common stock,
without par value, of the Company ("Common Stock") equal to the applicable
Settlement Rate and (ii) the Company will pay certain Contract Adjustment
Payments to the Holders as provided in the Purchase Contract Agreement, and (b)
either (A) prior to the Purchase Contract Settlement Date so long as no Tax
Event Redemption has occurred, (i) beneficial ownership of a Series _ Senior
Note due ____________ of the Company (the "Debt Securities"), having a principal
amount of $__, or (ii) following a successful remarketing of the Debt Securities
on the Initial Remarketing Date, the Applicable Ownership Interest in the
Remarketing Treasury Portfolio, or (B) upon the occurrence of a Tax Event
Redemption prior to the Purchase Contract Settlement Date, the Applicable
Ownership Interest in the Tax Event Treasury Portfolio.
Each Treasury Unit will initially be comprised of (a) a Purchase
Contract under which (i) the Holder will purchase from the Company not later
than the Purchase Contract Settlement Date, for $__ in cash, a number of newly
issued shares of Common Stock equal to the applicable Settlement Rate and (ii)
the Company will pay certain Contract Adjustment Payments to the Holders as
provided in the Purchase Contract Agreement, and (b) a [1/20], or [5]% undivided
beneficial ownership interest in a zero-coupon U.S. Treasury security having a
principal amount at maturity equal to $[1,000] and maturing on ____________
(CUSIP No. _________) ("Treasury Security").
[Pursuant to the terms of the Purchase Contract Agreement, the Company
may issue up to _________ additional Corporate Units and, if the Company issues
such additional Corporate Units, the related Debt Securities will be pledged
hereunder.]
Pursuant to the terms of the Indenture (as defined below), the Company
will issue the Debt Securities in an aggregate principal amount equal to or
greater than the aggregate Stated Amount of all Corporate Units.
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
and in the name of such Holders and to grant the pledge provided hereby of the
Debt Securities, any Applicable Ownership Interest in a Treasury Portfolio and
any Treasury Securities to secure each Holder's obligations under the related
Purchase Contract, as provided herein and subject to the terms hereof. Upon such
pledge, the Debt Securities will be beneficially owned by the Holders but will
be owned of record by the Purchase Contract Agent subject to the Pledge
hereunder, and the Treasury Securities (and the Applicable Ownership Interest in
the appropriate Treasury Portfolio) will be beneficially owned by the Holders
but will be held in book-entry form by the Securities Intermediary subject to
the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own
behalf and as attorney-in-fact of the Holders from time to time of the
Securities, agree as follows:
ARTICLE I.
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(c) terms not otherwise defined herein are used herein with the
meaning ascribed to them in the Purchase Contract Agreement.
"AGREEMENT" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
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"BANKRUPTCY CODE" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State of
New York) are permitted or required by any applicable law to close.
"CASH" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"CODE" has the meaning specified in Section 6.1 hereof.
"COLLATERAL" has the meaning specified in Section 2.1 hereof.
"COLLATERAL ACCOUNT" means the securities account (number __________)
maintained at ___________________ in the name "The Bank of New York, as Purchase
Contract Agent on behalf of the holders of Securities subject to the security
interest of ___________________ as Collateral Agent under the Pledge Agreement,
for the benefit of TXU Corp., as pledgee" and any successor account.
"COLLATERAL AGENT" has the meaning specified in the first paragraph of
this Agreement.
"COMMON STOCK" has the meaning specified in the Recitals.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"CUSTODIAL AGENT" has the meaning specified in the first paragraph of
this Agreement.
"DEBT SECURITY" AND "DEBT SECURITIES" have the respective meanings
specified in the Recitals.
"EQUITY UNITS" has the meaning specified in the Recitals.
"INDENTURE" means the Indenture (For Unsecured Debt Securities Series
_) dated as of ____________ between the Company and the Indenture Trustee
pursuant to which the Debt Securities are to be issued, as originally executed
and delivered and as it may from time to time be supplemented or amended by one
or more indentures supplemental thereto entered into pursuant to the applicable
provisions thereof and shall include the terms of a particular series of
securities established as contemplated by Section 301 thereof.
"INDENTURE TRUSTEE" means The Bank of New York, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
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"INITIAL RESET DATE" means any Business Day, as selected by the
Company in its sole discretion, from _________________ to _________________.
"INTERMEDIARY" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"PERMITTED INVESTMENTS" means any one of the following which shall
mature not later than the next succeeding Business Day [(i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than U.S. $200 million at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which commercial paper has a
rating at the time of purchase at least equal to "A-1" by Standard & Poor's
Ratings Service, a Division of ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P") or at least
equal to "P-1" by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"); and (v)
investments in money market funds registered under the Investment Company Act of
1940, as amended, rated in the highest applicable rating category by S&P or
Moody's].
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PLEDGE" has the meaning specified in Section 2.1 hereof.
"PLEDGED APPLICABLE OWNERSHIP INTEREST IN A TREASURY PORTFOLIO" has
the meaning specified in Section 2.1 hereof.
"PLEDGED DEBT SECURITIES" has the meaning specified in Section 2.1
hereof.
"PLEDGED TREASURY SECURITIES" has the meaning specified in Section 2.1
hereof.
"PROCEEDS" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, collection or disposition of the Collateral or any
proceeds thereof.
"PURCHASE CONTRACT" has the meaning specified in the Recitals.
"PURCHASE CONTRACT AGENT" has the meaning specified in the first
paragraph of this Agreement.
"PURCHASE CONTRACT AGREEMENT" has the meaning specified in the
Recitals.
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"SECURITIES" has the meaning specified in the Recitals.
"SECURITIES INTERMEDIARY" has the meaning specified in the first
paragraph of this Agreement.
"SECURITY ENTITLEMENT" has the meaning set forth in
Section 8-102(a)(17) of the Code.
"SEPARATE DEBT SECURITIES" means any Debt Securities that are not
Pledged Debt Securities.
"STATED AMOUNT" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES REGULATIONS" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"TRANSFER" means, with respect to the Collateral and in accordance
with the instructions of the Collateral Agent, the Purchase Contract Agent or
the Holder, as applicable:
(i) except as otherwise provided in Section 2.1 hereof, in the
case of Collateral consisting of securities which cannot be delivered by
book-entry or which the parties agree are to be delivered in physical form,
delivery in appropriate physical form to the recipient accompanied by any duly
executed instruments of transfer, assignments in blank, transfer tax stamps and
any other documents necessary to constitute a legally valid transfer to the
recipient; and
(ii) in the case of Collateral consisting of securities
maintained in book-entry form, by causing a "securities intermediary" (as
defined in Section 8-102(a)(14) of the Code) to (i) credit a Security
Entitlement with respect to such securities to a "securities account" (as
defined in Section 8-501(a) of the Code) maintained by or on behalf of the
recipient and (ii) to issue a confirmation to the recipient with respect to such
credit. In the case of Collateral to be delivered to the Collateral Agent, the
securities intermediary shall be the Securities Intermediary and the securities
account shall be the Collateral Account.
"TREASURY SECURITY" has the meaning specified in the Recitals.
"VALUE" with respect to any item of Collateral on any date means, as
to (i) Debt Securities, the aggregate principal amount thereof, (ii) Cash, the
face amount thereof and (iii) Treasury Securities, the aggregate principal
amount thereof at maturity; provided however, that in the case of the
remarketing of the Debt Securities on the third Business Day immediately
preceding the Initial Reset Date, Value means the Remarketing Treasury Portfolio
Purchase Price.
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ARTICLE II.
PLEDGE; CONTROL AND PERFECTION
SECTION 2.1 THE PLEDGE.
The Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, and the Purchase Contract Agent, as such
attorney-in-fact, hereby pledge and grant to the Collateral Agent, for the
benefit of the Company, as collateral security for the performance when due by
such Holders of their respective obligations under the related Purchase
Contracts, a security interest in all of the right, title and interest of such
Holders and the Purchase Contract Agent (a) in the Debt Securities and Treasury
Securities constituting a part of the Securities and any Treasury Securities
delivered in exchange for any Debt Securities, and any Debt Securities delivered
in exchange for any Treasury Securities, in accordance with Article IV hereof,
in each case that have been Transferred to or received by the Collateral Agent
and not released by the Collateral Agent to such Holders or the Purchase
Contract Agent under the provisions of this Agreement; (b) in payments made by
Holders pursuant to Section 4.4 hereof; (c) in the Collateral Account and all
securities, financial assets, Cash and other property credited thereto and all
Security Entitlements related thereto; (d) in the Applicable Ownership Interest
in the Treasury Portfolio purchased on behalf of the Holders of Corporate Units
by the Collateral Agent upon the occurrence of (i) a Tax Event Redemption as
provided in Section 6.2 hereof or (ii) a successful remarketing of the Debt
Securities and (e) all Proceeds of the foregoing (all of the foregoing,
collectively, the "Collateral"). Prior to or concurrently with the execution and
delivery of this Agreement, the Purchase Contract Agent, on behalf of the
initial Holders of the Securities, shall cause the Debt Securities comprising a
part of the Corporate Units to be Transferred to the Collateral Agent for the
benefit of the Company. Such Debt Securities shall be Transferred by physically
delivering such Debt Securities to the Collateral Agent endorsed in blank.
Treasury Securities and any Treasury Portfolio, as applicable, shall be
Transferred to the Collateral Account maintained by the Collateral Agent at the
Securities Intermediary by book-entry transfer to the Collateral Account in
accordance with the TRADES Regulations and other applicable law and by the
notation by the Securities Intermediary on its books that a Security Entitlement
with respect to such Treasury Securities or Treasury Portfolio has been credited
to the Collateral Account. For purposes of perfecting the Pledge under
applicable law, including, to the extent applicable, the TRADES Regulations or
the Uniform Commercial Code as adopted and in effect in any applicable
jurisdiction, the Collateral Agent shall be the agent of the Company as provided
herein. The pledge provided in this Section 2.1 is herein referred to as the
"Pledge" and the Debt Securities, Treasury Securities or the Applicable
Ownership Interest in any Treasury Portfolio subject to the Pledge, excluding
any Debt Securities or Treasury Securities or interest in any Treasury Portfolio
released from the Pledge as provided in Article IV hereof, are hereinafter
referred to as "Pledged Debt Securities", the "Pledged Treasury Securities," or
"Pledged Applicable Ownership Interest in a Treasury Portfolio," respectively,
and collectively, the "Pledged Securities." Subject to the Pledge and the
provisions of Section 2.2 hereof, the Holders from time to time shall have full
beneficial ownership of the Collateral. The Collateral Agent shall have the
right to have the Debt Securities or any other Securities held in physical form
reregistered in its name or in the name of its agent or the Securities
Intermediary and credited to the Collateral Account.
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Except as may be required in order to release Debt Securities (or, if
(i) a Tax Event Redemption or (ii) a successful remarking of the Debt
Securities, as the case may be, has occurred, the Applicable Ownership Interest
in the appropriate Treasury Portfolio) or Treasury Securities in connection with
a Holder's election to convert its investment from Corporate Units to Treasury
Units, or from Treasury Units to Corporate Units, as the case may be, or except
as otherwise required to release Pledged Securities as specified herein, neither
the Collateral Agent nor the Securities Intermediary shall relinquish physical
possession of any certificate evidencing Debt Securities (or, if (i) a Tax Event
Redemption or (ii) a successful remarking of the Debt Securities, as the case
may be, has occurred, the Applicable Ownership Interest in the appropriate
Treasury Portfolio) or Treasury Securities prior to the termination of this
Agreement. If it becomes necessary for the Collateral Agent to relinquish
physical possession of a certificate in order to release a portion of the Debt
Securities evidenced thereby from the Pledge, the Collateral Agent shall use its
best efforts to obtain physical possession of a replacement certificate
evidencing any Debt Securities remaining subject to the Pledge hereunder
registered to it or endorsed in blank within ten days of the date it
relinquished possession. The Collateral Agent shall promptly notify the Company
of its failure to obtain possession of any such replacement certificate as
required hereby.
SECTION 2.2 CONTROL AND PERFECTION.
(a) In connection with the Pledge granted in Section 2.1, and subject
to the other provisions of this Agreement, the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, hereby authorize
and direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
"entitlement orders" (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent on behalf of the Company may give in writing with respect to
the Collateral Account, the Collateral credited thereto and any Security
Entitlements with respect to any thereof. Such instructions and entitlement
orders may, without limitation, direct the Securities Intermediary to transfer,
redeem, sell, liquidate, assign, deliver or otherwise dispose of the Debt
Securities, the Treasury Securities, any Treasury Portfolio and any Security
Entitlements with respect thereto and to pay and deliver any income, proceeds or
other funds derived therefrom to the Company. The Purchase Contract Agent and
the Holders from time to time, acting through the Purchase Contract Agent, each
hereby further authorize and direct the Collateral Agent, as agent of the
Company, to itself issue instructions and entitlement orders, and to otherwise
take action, with respect to the Collateral Account, the Collateral credited
thereto and any Security Entitlements with respect thereto, pursuant to the
terms and provisions hereof, all without the necessity of obtaining the further
consent of the Purchase Contract Agent or any of the Holders. The Collateral
Agent shall be the agent of the Company and shall act as directed in writing by
the Company. Without limiting the generality of the foregoing, the Collateral
Agent shall issue entitlement orders to the Securities Intermediary when and as
directed by the Company.
(b) The Securities Intermediary hereby confirms and agrees that:
(i) all securities or other property underlying any financial assets credited to
the Collateral Account shall be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in blank or credited to
another collateral account maintained in the name of the Securities Intermediary
and in no case will any financial asset credited to the Collateral Account be
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registered in the name of the Purchase Contract Agent, the Company or any
Holder, payable to the order of, or specially indorsed to, the Purchase Contract
Agent, the Collateral Agent, the Company or any Holder except to the extent the
foregoing have been specially indorsed to the Securities Intermediary or in
blank; (ii) all property delivered to the Securities Intermediary pursuant to
this Pledge Agreement (including, without limitation, any Debt Securities, the
Applicable Ownership Interest in any Treasury Portfolio or any Treasury
Securities) will be promptly credited to the Collateral Account; (iii) the
Collateral Account is an account to which financial assets are or may be
credited, and the Securities Intermediary shall, subject to the terms of this
Agreement, treat the Purchase Contract Agent as the "entitlement holder" (as
defined in Section 8-102(a)(7) of the Code) with respect to the Collateral
Account; (iv) the Securities Intermediary has not entered into, and until the
termination of this Agreement will not enter into, any agreement with any other
Person relating to the Collateral Account and/or any financial assets credited
thereto pursuant to which it has agreed to comply with "entitlement orders" (as
defined in Section 8-102(a)(8) of the Code) of such other Person; and (v) the
Securities Intermediary has not entered into, and until the termination of this
Agreement will not enter into, any agreement with the Company, the Collateral
Agent, the Purchase Contract Agent or the Holders of the Securities purporting
to limit or condition the obligation of the Securities Intermediary to comply
with entitlement orders as set forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item of
property (whether investment property, financial asset, security, instrument or
cash) credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or any
portion hereof) and any other agreement now existing or hereafter entered into,
the terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, and each of them severally, with
full power of substitution, as the Purchase Contract Agent's attorney-in-fact to
take on behalf of, and in the name, place and stead of the Purchase Contract
Agent and the Holders, any action necessary or desirable to perfect and to keep
perfected the security interest in the Collateral referred to in Section 2.1.
The grant of such power-of-attorney shall not be deemed to require of the
Collateral Agent any specific duties or obligations not otherwise assumed by the
Collateral Agent hereunder.
ARTICLE III.
DISTRIBUTIONS ON PLEDGED COLLATERAL
So long as the Purchase Contract Agent is the registered owner of the
Pledged Debt Securities, it shall receive all payments thereon. If the Pledged
Debt Securities are reregistered, such that the Collateral Agent becomes the
registered holder, all payments of principal or interest on such Pledged Debt
Securities, together with any payments of principal or interest or cash
distributions in respect of any other Pledged Securities received by the
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Collateral Agent that are properly payable hereunder shall be paid by the
Collateral Agent by wire transfer in same day funds:
(a) in the case of (A) payment of interest with respect to the
Pledged Debt Securities or cash distributions on the appropriate Pledged
Applicable Ownership Interest in a Treasury Portfolio (as specified in
clauses (1)(ii), (1)(iii) or (2)(ii) of the definition of the term Applicable
Ownership Interest), as the case may be, and (B) any payments of principal with
respect to any Debt Securities or the appropriate Applicable Ownership Interest
(as specified in clauses (1)(i) or (2)(i) of the definition of such term) in a
Treasury Portfolio, as the case may be, that have been released from the Pledge
pursuant to Section 4.3 hereof, to the Purchase Contract Agent, for the benefit
of the relevant Holders of Corporate Units, to the account designated by the
Purchase Contract Agent for such purpose, no later than 2:00 p.m., New York City
time, on the Business Day such payment is received by the Collateral Agent
(provided that in the event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30 a.m., New York
City time, on the next succeeding Business Day);
(b) in the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Holders of the Treasury Units to the accounts
designated by them in writing to the Collateral Agent for such purpose no later
than 2:00 p.m., New York City time, on the Business Day such payment is received
by the Collateral Agent (provided that in the event such payment is received by
the Collateral Agent on a day that is not a Business Day or after 12:30 p.m.,
New York City time, on a Business Day, then such payment shall be made no later
than 10:30 a.m., New York City time, on the next succeeding Business Day); and
(c) in the case of payments of the principal of any Pledged Debt
Securities or on the appropriate Pledged Applicable Ownership Interest in a
Treasury Portfolio (as specified in clauses (1)(i) or (2)(i) of the definition
of the term Applicable Ownership Interest), as the case may be, or the principal
of any Pledged Treasury Securities, to the Company on the Purchase Contract
Settlement Date in accordance with the procedure set forth in Section 4.6(a) or
4.6(b) hereof, in full satisfaction of the respective obligations of the Holders
under the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein shall be
applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent or a Holder of Corporate Units shall receive any payments of
principal on account of any Debt Security or, if applicable, the Applicable
Ownership Interest (as specified in clauses (1)(i) or (2)(i) of the definition
of such term) in the appropriate Treasury Portfolio that, at the time of such
payment, is a Pledged Debt Security or the Pledged Applicable Ownership Interest
in a Treasury Portfolio, as the case may be, or the Purchase Contract Agent or a
Holder of Treasury Units shall receive any payments of principal on account of
any Treasury Securities that, at the time of such payment, are Pledged Treasury
Securities, the Purchase Contract Agent or such Holder, as the case may be,
shall transfer the Proceeds of such payment of principal on such Pledged Debt
Security, Pledged Applicable Ownership Interest in a Treasury Portfolio or
Pledged Treasury Securities, as the case may be, to the Collateral Agent and the
Collateral Agent shall hold such Proceeds for the benefit of the Company as
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Collateral for the performance when due by such Holder of its obligations under
the related Purchase Contracts.
ARTICLE IV.
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF DEBT SECURITIES
SECTION 4.1 SUBSTITUTION FOR DEBT SECURITIES AND THE CREATION OF TREASURY
UNITS.
A Holder of a Corporate Unit may create or recreate a Treasury Unit
and separate the Debt Securities or the appropriate Applicable Ownership
Interest in a Treasury Portfolio, as applicable, from the related Purchase
Contract in respect of such Corporate Unit by substituting Treasury Securities
for all, but not less than all, of the Debt Securities or Applicable Ownership
Interest in the appropriate Treasury Portfolio that form a part of such
Corporate Unit in accordance with this Section 4.1 and 3.13 of the Purchase
Contract Agreement; provided, however, that if a Treasury Portfolio has not
replaced the Debt Securities as a component of Corporate Units as a result of a
successful remarketing or a Tax Event Redemption, such Collateral Substitutions
may be made only on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date; if a Treasury Portfolio has replaced Debt
Securities as a component of Corporate Units as a result of a successful
remarketing of the Debt Securities or a Tax Event Redemption, such Collateral
Substitutions may be made only on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date. Holders may make
Collateral Substitutions and establish Treasury Units (i) only in integral
multiples of __ Corporate Units if only Debt Securities are being substituted by
Treasury Securities, or (ii) only in integral multiples of ______ Corporate
Units if the appropriate Applicable Ownership Interests in the Treasury
Portfolio are being substituted for Treasury Securities. For example, to create
__ Treasury Units (if a Tax Event Redemption has not occurred and Debt
Securities remain components of Corporate Units), or ______ Treasury Units (if a
Tax Event Redemption has occurred or a Remarketing Treasury Portfolio has
replaced Debt Securities as components of Corporate Units as a result of a
successful remarketing of the Debt Securities), the Corporate Unit Holder shall
(a) if a Treasury Portfolio has not replaced any Debt Securities as a
component of Corporate Units as a result of a successful remarketing or a Tax
Event Redemption, on or prior to the fifth Business Day preceding the Purchase
Contract Settlement Date, deposit with the Collateral Agent a Treasury Security
having a principal amount at maturity of $[1,000]; or
(b) if a Treasury Portfolio has replaced the Debt Securities as a
component of Corporate Units as a result of a successful remarketing of the Debt
Securities or a Tax Event Redemption, on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, deposit with the
Collateral Agent Treasury Securities having an aggregate principal amount at
maturity of $_________; and
(c) in each case, transfer and surrender the related __ Corporate
Units, or, in the event a Treasury Portfolio is a component of Corporate ▇▇▇▇▇,
▇▇
______ Corporate Units, to the Purchase Contract Agent accompanied by a notice
to the Purchase Contract Agent, substantially in the form of Exhibit B hereto,
stating that the Holder has transferred the relevant amount of Treasury
Securities to the Collateral Agent and requesting that the Purchase Contract
Agent instruct the Collateral Agent to release the applicable Debt Securities or
the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, underlying such Corporate Units, whereupon the Purchase Contract
Agent shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit A hereto.
Upon receipt of the Treasury Securities described in clause (a) or (b)
above and the instructions described in clause (c) above from the Purchase
Contract Agent, the Collateral Agent shall release the Pledged Debt Securities
or the appropriate Pledged Applicable Ownership Interest in a Treasury
Portfolio, as the case may be, and shall promptly Transfer such Pledged Debt
Securities or the appropriate Pledged Applicable Ownership Interest in a
Treasury Portfolio, as the case may be, free and clear of the lien, pledge or
security interest created hereby, to the Purchase Contract Agent.
SECTION 4.2 SUBSTITUTION FOR TREASURY SECURITIES AND THE CREATION OF
CORPORATE UNITS.
A Holder of a Treasury Unit may create or recreate Corporate Units by
depositing with the Collateral Agent Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, having an
aggregate principal amount equal to the aggregate principal amount at maturity
of, and in substitution for all, but not less than all, of the Treasury
Securities comprising part of the Treasury Unit in accordance with this
Section 4.2 and 3.14 of the Purchase Contract Agreement; provided, however, that
if a Treasury Portfolio has not replaced the Debt Securities as a component of
Corporate Units as a result of a successful remarketing or a Tax Event
Redemption, such Collateral Substitutions may be made only on or prior to the
fifth Business Day immediately preceding the Purchase Contract Settlement Date;
and if a Treasury Portfolio has replaced the Debt Securities as a component of
Corporate Units as a result of a successful remarketing of the Debt Securities
or a Tax Event Redemption, such Collateral Substitutions may be made only on or
prior to the second Business Day immediately preceding the Purchase Contract
Settlement Date. Holders of Treasury Units may make such Collateral
Substitutions and establish Corporate Units (i) only in integral multiples of __
Treasury Units if Treasury Securities are being replaced by Debt Securities, or
(ii) only in integral multiples of ______ Treasury Units if any Treasury
Security is being replaced by the Applicable Ownership Interest in the Treasury
Portfolio. To create __ Corporate Units (if a Tax Event Redemption has not
occurred and the Debt Securities remain components of Corporate Units), or
______ Corporate Units (if a Tax Event Redemption has occurred or a Remarketing
Treasury Portfolio has replaced the Debt Securities as a result of a successful
remarketing of the Debt Securities), the Treasury Unit Holder shall
(a) if a Treasury Portfolio has not replaced the Debt Securities as a
component of Corporate Units as a result of a successful remarketing or a Tax
Event Redemption on or prior to the fifth Business Day preceding the Purchase
Contract Settlement Date, deposit with the Collateral Agent $[1,000] in
aggregate principal amount of Debt Securities; or
(b) if a Treasury Portfolio has replaced the Debt Securities as a
component of Corporate Units as a result of a successful remarketing of the Debt
11
Securities or a Tax Event Redemption on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, deposit with the
Collateral Agent the Applicable Ownership Interest in the appropriate Treasury
Portfolio having an aggregate principal amount at maturity of $_________; or
(c) in each case, transfer and surrender the related __ Treasury
Units, or in the event the Treasury Portfolio is a component of Corporate Units,
______ Treasury Units, to the Purchase Contract Agent accompanied by a notice to
the Purchase Contract Agent, substantially in the form of Exhibit B hereto,
stating that the Holder has transferred the relevant amount of Debt Securities
or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, to the Collateral Agent and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release the Pledged Treasury
Securities underlying such Treasury Units, whereupon the Purchase Contract Agent
shall promptly give such instruction to the Collateral Agent, substantially in
the form of Exhibit A hereto.
Upon receipt of the Debt Securities or the appropriate Applicable
Ownership Interest in the applicable Treasury Portfolio, as the case may be,
described in clause (a) or (b) above and the instructions described in
clause (c) above, from the Purchase Contract Agent, the Collateral Agent shall
release the related Pledged Treasury Securities and shall promptly Transfer such
Pledged Treasury Securities, free and clear of the lien, pledge or security
interest created hereby, to the Purchase Contract Agent.
SECTION 4.3 TERMINATION EVENT.
Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from the Pledge and
shall promptly Transfer any Pledged Debt Securities (or, if (i) a Tax Event
Redemption or (ii) a successful remarketing of the Debt Securities, as the case
may be, has occurred, the Pledged Applicable Ownership Interest in a Treasury
Portfolio) and Pledged Treasury Securities to the Purchase Contract Agent for
the benefit of the Holders of the Corporate Units and the Treasury Units,
respectively, free and clear of any lien, pledge or security interest or other
interest created hereby.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged Debt
Securities, the Pledged Applicable Ownership Interest in a Treasury Portfolio or
the Pledged Treasury Securities, as the case may be, as provided by this Section
4.3, any Holder may, and the Purchase Contract Agent shall, upon receipt from
the Holders of reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by the Purchase Contract Agent in compliance
with this paragraph, (i) use its reasonable best efforts to obtain an opinion of
a nationally recognized law firm reasonably acceptable to the Collateral Agent
to the effect that, as a result of the Company being the debtor in such a
bankruptcy case, the Collateral Agent will not be prohibited from releasing or
Transferring the Collateral as provided in this Section 4.3, and shall deliver
such opinion to the Collateral Agent within ten days after the occurrence of
such Termination Event, and if (y) any such Holder or the Purchase Contract
Agent shall be unable to obtain such opinion within ten days after the
occurrence of such Termination Event or (z) the Collateral Agent shall continue,
12
after delivery of such opinion, to refuse to effectuate the release and Transfer
of all Pledged Debt Securities, the Pledged Applicable Ownership Interest in a
Treasury Portfolio or the Pledged Treasury Securities, as the case may be, as
provided in this Section 4.3, then any Holder may, and the Purchase Contract
Agent shall, within 15 days after the occurrence of such Termination Event
commence an action or proceeding in the court with jurisdiction of the Company's
case under the Bankruptcy Code seeking an order requiring the Collateral Agent
to effectuate the release and transfer of all Pledged Debt Securities, the
Pledged Applicable Ownership Interest in a Treasury Portfolio or the Pledged
Treasury Securities, as the case may be, as provided by this Section 4.3 or (ii)
commence an action or proceeding in the court with jurisdiction of the Company's
case under the Bankruptcy Code like that described in subsection (i)(z) hereof
within ten days after the occurrence of such Termination Event.
SECTION 4.4 CASH SETTLEMENT.
(a) Upon receipt by the Collateral Agent of (i) a notice from the
Purchase Contract Agent that a Holder of a Corporate Unit or Treasury Unit has
elected, in accordance with the procedures specified in Section 5.4(a)(i) or
(d)(i) of the Purchase Contract Agreement, respectively, to settle its Purchase
Contract with Cash and (ii) payment by such Holder of the amount required to
settle the Purchase Contract prior to 11:00 a.m., New York City time, on the
Business Day immediately preceding the Purchase Contract Settlement Date in
lawful money of the United States by certified or cashiers' check or wire
transfer in immediately available funds payable to or upon the order of the
Company, then the Collateral Agent shall promptly invest any Cash received from
a Holder in connection with a Cash Settlement in Permitted Investments. Upon
receipt of the proceeds upon the maturity of the Permitted Investments on the
Purchase Contract Settlement Date, the Collateral Agent shall pay the portion of
such proceeds and deliver any certified or cashiers' checks received, in an
aggregate amount equal to the Purchase Price, to the Company on the Purchase
Contract Settlement Date, and shall distribute any funds in respect of the
interest earned from the Permitted Investments to the Purchase Contract Agent
for payment to the relevant Holder.
(b) If a Holder of a Corporate Unit (unless a Treasury Portfolio has
replaced the relevant Debt Security) fails to notify the Purchase Contract Agent
of its intention to make a Cash Settlement in accordance with Section 5.4(a)(i)
of the Purchase Contract Agreement, such failure shall constitute a default
under the related Purchase Contract and hereunder, and the Holder shall be
deemed to have consented to the disposition of the Pledged Debt Securities
pursuant to the remarketing as described in Section 5.4(b) of the Purchase
Contract Agreement, which is incorporated herein by reference and Section 4.6
hereof, and the Collateral Agent, for the benefit of the Company, will exercise
its rights as a secured party with respect to applicable Pledged Debt Securities
at the direction of the Company to cause the remarketing of such Pledged Debt
Securities. If a Holder of Corporate Units does notify the Purchase Contract
Agent as provided in Section 5.4(a)(i) of the Purchase Contract Agreement of its
intention to make a Cash Settlement, but fails to make such payment as required
by Section 5.4(a)(ii) of the Purchase Contract Agreement, such failure shall
constitute a default under the related Purchase Contracts and hereunder, and the
Pledged Debt Securities of such a Holder will not be remarketed but instead the
Collateral Agent, for the benefit of the Company, will exercise its rights as a
secured party with respect to such Debt Securities at the direction of the
Company to retain or dispose of the Collateral in accordance with applicable
law. In addition, in the event of a Failed Remarketing as described in
13
Section 5.4(b) of the Purchase Contract Agreement, such Failed Remarketing shall
constitute a default hereunder by such Holder, and the Collateral Agent, for the
benefit of the Company, will also exercise its rights as a secured party with
respect to such Debt Securities at the direction of the Company to retain or
dispose of the Collateral in accordance with applicable law.
(c) If a Holder of Treasury Units or Corporate Units (if a Treasury
Portfolio has replaced the Debt Securities) fails to notify the Purchase
Contract Agent of such Holder's intention to make a Cash Settlement in
accordance with Section 5.4(d)(i) of the Purchase Contract Agreement, or if a
Holder of Treasury Units or Corporate Units (if a Treasury Portfolio has
replaced the Debt Securities) notifies the Purchase Contract Agent as provided
in Section 5.4(d)(i) of the Purchase Contract Agreement of its intention to make
a Cash Settlement, but fails to make such payment as required by Section
5.4(d)(ii) of the Purchase Contract Agreement, such failure shall constitute a
default under the related Purchase Contracts and hereunder by such Holder and
upon the maturity of the related Pledged Treasury Securities or the Pledged
Applicable Ownership Interest in a Treasury Portfolio, if any, held by the
Collateral Agent on the Business Day immediately preceding the Purchase Contract
Settlement Date, the principal amount of such Pledged Treasury Securities or the
portion of the Pledged Applicable Ownership Interest in a Treasury Portfolio
corresponding to such Purchase Contracts received by the Collateral Agent shall,
upon written direction of the Company, be invested promptly in Permitted
Investments. On the Purchase Contract Settlement Date, an aggregate amount equal
to the Purchase Price will be remitted to the Company as payment thereof. In the
event the sum of the proceeds from the Pledged Treasury Securities or the
Pledged Applicable Ownership Interest in a Treasury Portfolio, as the case may
be, and the investment earnings earned from such investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being settled thereby, the
Collateral Agent will distribute such excess to the Purchase Contract Agent for
the benefit of the Holder of the related Treasury Units or Corporate Units when
received.
SECTION 4.5 EARLY SETTLEMENT.
Upon written notice to the Collateral Agent by the Purchase Contract
Agent that a Holder of a Security has elected to effect Early Settlement of its
entire obligation under the Purchase Contract forming a part of such Security in
accordance with the terms of the Purchase Contract and the Purchase Contract
Agreement, 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 Amount pursuant to the terms of the Purchase Contract and the
Purchase Contract Agreement and that all conditions to such Early Settlement
have been satisfied, then the Collateral Agent shall release from the Pledge,
(a) the Pledged Debt Securities or the appropriate Pledged Applicable Ownership
Interest in a Treasury Portfolio in the case of a Holder of Corporate Units or
(b) the Pledged Treasury Securities in the case of a Holder of Treasury Units,
in each case that had been components of such Security, and shall transfer such
Pledged Debt Securities or the appropriate Pledged Applicable Ownership Interest
in a Treasury Portfolio or Pledged Treasury Securities, as the case may be, free
and clear of the Pledge created hereby, to the Purchase Contract Agent for the
benefit of such Holder.
14
SECTION 4.6 APPLICATION OF PROCEEDS; SETTLEMENT.
(a) In the event a Holder of Corporate Units, unless a Treasury
Portfolio has replaced the Debt Securities, 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) of the Purchase Contract Agreement or has not made an
Early Settlement of the Purchase Contracts underlying its Corporate Units, such
Holder shall be deemed to have elected to pay for the shares of Common Stock to
be issued under such Purchase Contracts from the Proceeds of the related Pledged
Debt Securities. The Collateral Agent shall by 10:00 a.m., New York City time,
on the fourth Business Day immediately preceding the Purchase Contract
Settlement Date, without any instruction from such Holder of Corporate Units,
present the related Pledged Debt Securities to the Remarketing Agent for
remarketing. Upon receiving such Pledged Debt Securities, the Remarketing Agent,
pursuant to the terms of the Remarketing Agreement, will use its reasonable
efforts to remarket such Pledged Debt Securities on such date at a price of
approximately [100.5]% (but not less than [100]%) of the aggregate Value of such
Pledged Debt Securities, plus accrued and unpaid interest, if any, thereon.
After deducting as the Remarketing Fee an amount not exceeding ___ basis points
(.__%) of the aggregate Value of the Pledged Debt Securities from any amount of
such Proceeds in excess of the sum of (i) the aggregate Value of such Debt
Securities, plus (ii) such accrued and unpaid interest on the remarketed Pledged
Debt Securities, the Remarketing Agent will remit the entire amount of the
Proceeds of a successful remarketing to the Collateral Agent. On the Purchase
Contract Settlement Date, the Collateral Agent shall apply that portion of the
Proceeds from such remarketing equal to the aggregate Value of the Pledged Debt
Securities, to satisfy in full the obligations of such Holders of Corporate
Units to pay the Purchase Price to purchase the Common Stock under the related
Purchase Contracts. The remaining portion of such Proceeds, if any, shall be
distributed by the Collateral Agent to the Purchase Contract Agent for payment
to the Holders. If the Remarketing Agent advises the Collateral Agent in writing
that it cannot remarket the related Pledged Debt Securities of such Holders of
Corporate Units at a price not less than 100% of the aggregate Value of such
Pledged Debt Securities plus any accrued and unpaid interest, or if the
remarketing does not occur because a condition precedent to it has not been
fulfilled, thus resulting in a Failed Remarketing, the Collateral Agent will,
for the benefit of the Company, at the written direction of the Company, retain
or dispose of the Pledged Debt Securities in accordance with applicable law and
satisfy in full, from any such disposition or retention, such Holder's
obligation to pay the Purchase Price for the Common Stock under the related
Purchase Contracts.
(b) In the event a Holder of Treasury Units or, if a Treasury
Portfolio has replaced the Debt Securities, Corporate Units, has not made an
Early Settlement of the Purchase Contracts underlying its Treasury Units or
Corporate Units, as the case may be, such Holder shall be deemed to have elected
to pay for the shares of Common Stock to be issued under such Purchase Contracts
from the Proceeds of the related Pledged Treasury Securities or the related
Pledged Applicable Ownership Interest in a Treasury Portfolio, as the case may
be. On the Business Day immediately prior to the Purchase Contract Settlement
Date, the Collateral Agent shall, at the written direction of the Purchase
Contract Agent, invest the Cash proceeds of the maturing Pledged Treasury
Securities or the Pledged Applicable Ownership Interest in a Treasury Portfolio,
as the case may be, in overnight Permitted Investments. Without receiving any
instruction from any such Holder of Treasury Units or Corporate Units, the
Collateral Agent shall apply the Proceeds of the related Pledged Treasury
Securities or Pledged Applicable Ownership Interest in a Treasury Portfolio to
the settlement of the related Purchase Contracts on the Purchase Contract
Settlement Date. In the event the sum of the Proceeds from the related Pledged
Treasury Securities or related Pledged Applicable Ownership Interest in a
15
Treasury Portfolio and the investment earnings from the investment in overnight
Permitted Investments is in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby on the Purchase Contract Settlement
Date, the Collateral Agent shall distribute such excess, when received, to the
Purchase Contract Agent for the benefit of the Holders.
(c) Pursuant to the Remarketing Agreement, on or prior to the fifth
Business Day immediately preceding each Reset Date, but no earlier than the
Payment Date immediately preceding such Reset Date, holders of Separate Debt
Securities may elect to have their Separate Debt Securities remarketed by
delivering the Separate Debt Securities, together with a notice of such
election, substantially in the form of Exhibit C hereto, to the Custodial Agent.
The Custodial Agent will hold the Separate Debt Securities in an account
separate from the Collateral Account. A holder of Separate Debt Securities
electing to have its Separate Debt Securities remarketed will also have the
right to withdraw such election by written notice to the Custodial Agent,
substantially in the form of Exhibit D hereto, on or prior to the fifth Business
Day immediately preceding the applicable Reset Date, upon which notice the
Custodial Agent will return the Separate Debt Securities to such holder. On the
fourth Business Day immediately preceding the applicable Reset Date, the
Custodial Agent will deliver to the Remarketing Agent for remarketing all
Separate Debt Securities delivered to the Custodial Agent pursuant to this
Section 4.6(c) and not withdrawn pursuant to the terms hereof prior to such
date. The portion of the proceeds from such remarketing equal to the aggregate
Value of the Separate Debt Securities, plus accrued and unpaid interest, if any,
thereon, will automatically be remitted by the Remarketing Agent to the
Custodial Agent for the benefit of the holders of the Separate Debt Securities.
In addition, after deducting as the Remarketing Fee an amount not exceeding __
basis points (.__%) of the Value of the remarketed Separate Debt Securities,
from any amount of such proceeds in excess of the sum of (i) the aggregate Value
of the remarketed Separate Debt Securities plus (ii) any accrued and unpaid
interest thereon, the Remarketing Agent will remit to the Custodial Agent the
remaining portion of the proceeds, if any, for the benefit of such holders. If,
despite using its reasonable efforts, the Remarketing Agent advises the
Custodial Agent in writing that it cannot remarket the related Separate Debt
Securities of such holders, together with the remarketed Pledged Debt
Securities, at a price not less than 100% of the aggregate Value of the Separate
Debt Securities and the Pledged Debt Securities plus accrued and unpaid interest
or, if a condition to the remarketing shall not have been fulfilled, thus in
either case resulting in a Failed Remarketing, the Remarketing Agent will
promptly return the Separate Debt Securities to the Custodial Agent for
redelivery to such holders.
ARTICLE V.
VOTING RIGHTS -- DEBT SECURITIES
The Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the Pledged Debt
Securities or any part thereof for any purpose not inconsistent with the terms
of this Agreement and in accordance with the terms of the Purchase Contract
Agreement; provided, that the Purchase Contract Agent shall not exercise or, as
the case may be, shall not refrain from exercising such right if, in the
16
judgment of the Company, such action would impair or otherwise have a material
adverse effect on the value of all or any of the Pledged Debt Securities; and
provided, further, that the Purchase Contract Agent shall give the Company and
the Collateral Agent at least five days' prior written notice of the manner in
which it intends to exercise, or its reasons for refraining from exercising, any
such right. Upon receipt of any notices and other communications in respect of
any Pledged Debt Securities, including notice of any meeting at which holders of
Debt Securities are entitled to vote or solicitation of consents, waivers or
proxies of holders of Debt Securities, 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 Debt Securities (in form and substance satisfactory to the Collateral
Agent) as are prepared by the Purchase Contract Agent with respect to the
Pledged Debt Securities.
ARTICLE VI.
RIGHTS AND REMEDIES; SUBSTITUTION OF A TREASURY PORTFOLIO FOR
DEBT SECURITIES
SECTION 6.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT.
(a) In addition to the rights and remedies specified in Section 4.4
hereof or otherwise available at law or in equity, after an event of default
hereunder, the Collateral Agent shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform Commercial Code
(or any successor thereto) as in effect in the State of New York from time to
time (the "Code") (whether or not the Code is in effect in the jurisdiction
where the rights and remedies are asserted) and the TRADES Regulations and such
additional rights and remedies to which a secured party is entitled under the
laws in effect in any jurisdiction where any rights and remedies hereunder may
be asserted. Wherever reference is made in this Agreement to any section of the
Code, such reference shall be deemed to include a reference to any provision of
the Code which is a successor to, or amendment of, such section. Without
limiting the generality of the foregoing, such remedies may include, to the
extent permitted by applicable law, (i) retention of the Pledged Debt Securities
or other Collateral in full satisfaction of the Holders' obligations under the
Purchase Contracts or (ii) sale of the Pledged Debt Securities or other
Collateral in one or more public or private sales and application of the
proceeds in full satisfaction of the Holders' obligations under the Purchase
Contracts.
(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 Pledged Applicable Ownership
Interest of a Treasury Portfolio (as specified in clauses (1)(i) or (2)(i) of
the definition of the term "Applicable Ownership Interest") or on account of
principal payments of any Pledged Treasury Securities as provided in Article III
hereof in satisfaction of the obligations of the Holder of the Securities of
which such Pledged Treasury Securities, or the Pledged Applicable Ownership
Interest of a Treasury Portfolio (as specified in clauses (1)(i) or (2)(i) of
the definition of the term "Applicable Ownership Interest"), as applicable, is a
part under the related Purchase Contracts, the inability to make such payments
shall constitute a default hereunder and the Collateral Agent shall have and may
17
exercise, with reference to such Pledged Treasury Securities, or such
appropriate Pledged Applicable Ownership Interest of a Treasury Portfolio (as
specified in clauses (1)(i) or (2)(i) of the definition of the term Applicable
Ownership Interest), as applicable, and such obligations of such Holder, any and
all of the rights and remedies available to a secured party under the Code and
the TRADES Regulations after default by a debtor, and as otherwise granted
herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) principal of, or interest
on, the Pledged Debt Securities, (ii) the principal amount of the Pledged
Treasury Securities, or (iii) the appropriate Pledged Applicable Ownership
Interest in a Treasury Portfolio, subject, in each case, to the provisions of
Article III, and as otherwise provided herein.
(d) The Purchase Contract Agent individually and as attorney-in-fact
for each Holder of Securities, in the event such Holder becomes the Holder of
Corporate Units or Treasury Units, agrees that, from time to time, upon the
written request of the Collateral Agent, the Purchase Contract Agent or such
Holder, it 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 act, its own negligent failure to act or its own willful misconduct.
SECTION 6.2 SUBSTITUTION OF A TREASURY PORTFOLIO FOR DEBT SECURITIES.
(a) Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Collateral Agent will, upon the written
instruction of the Company and the Purchase Contract Agent, deliver the
Applicable Principal Amount of Pledged Debt Securities to the Indenture Trustee
for payment of the Redemption Price. The Collateral Agent shall, or in the event
the Pledged Debt Securities are registered in the name of the Purchase Contract
Agent, the Purchase Contract Agent shall, direct the Indenture Trustee to pay
the Redemption Price therefor payable on the Tax Event Redemption Date on or
prior to 12:30 p.m., New York City time, by check or wire transfer in
immediately available funds at such place and at such account as may be
designated by the Collateral Agent. In the event the Collateral Agent receives
such Redemption Price, subject to the provisions of Section 4.3 hereof, the
Collateral Agent will, at the written direction of the Company, apply an amount
equal to the Redemption Amount of such Redemption Price to purchase from the
Quotation Agent, the Tax Event Treasury Portfolio and promptly remit the
remaining portion of such Redemption Price to the Purchase Contract Agent for
payment to the Holders of Corporate Units. The Collateral Agent shall Transfer
the Tax Event Treasury Portfolio to the Collateral Account to secure the
obligation of all Holders of Corporate Units to purchase Common Stock of the
Company under the Purchase Contracts constituting a part of such Corporate
Units, in substitution for the Pledged Debt Securities. Thereafter the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Tax Event Treasury Portfolio as it had in respect of the Pledged
Debt Securities, as provided in Articles II, III, IV, V and VI hereof, and any
18
reference herein to the Pledged Debt Securities shall be deemed to be a
reference to such Tax Event Treasury Portfolio.
(b) Upon the successful remarketing of the Debt Securities on the
third Business Day immediately preceding the Initial Reset Date, the proceeds of
such remarketing (after deducting any Remarketing Fee) shall be delivered to the
Collateral Agent in exchange for the Pledged Debt Securities. Pursuant to the
terms of this Agreement, the Collateral Agent will apply an amount equal to the
Remarketing Treasury Portfolio Purchase Price to purchase on behalf of the
Holders of Corporate Units the Remarketing Treasury Portfolio and promptly remit
the remaining portion of such proceeds to the Purchase Contract Agent for
payment to the Holders of such Corporate Units. The Remarketing Treasury
Portfolio will be substituted for the outstanding Pledged Debt Securities, and
will be held by the Collateral Agent in accordance with the terms of this
Agreement to secure the obligation of each Holder of a Corporate Unit to
purchase the Common Stock of the Company on the Purchase Contract Settlement
Date under the Purchase Contract constituting a part of such Corporate Unit.
Following the successful remarketing of the Debt Securities on the third
Business Day immediately preceding the Initial Reset Date, the Holders of
Corporate Units and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Remarketing Treasury Portfolio as the
Holder of Corporate Units and the Collateral Agent had in respect of the Pledged
Debt Securities subject to the Pledge thereof as provided in Articles II, III,
IV, V and VI hereof, and any reference herein to the Pledged Debt Securities
shall be deemed to be reference to the Remarketing Treasury Portfolio.
SECTION 6.3 INITIAL REMARKETING.
The Collateral Agent shall, by 10:00 a.m., New York City time, on the
fourth Business Day immediately preceding the Initial Reset Date, without any
instruction from any Holder of Corporate Units, present the related Pledged Debt
Securities to the Remarketing Agent for remarketing. Upon receiving such Pledged
Debt Securities, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement and the Supplemental Remarketing Agreement, will use its reasonable
efforts to remarket such Pledged Debt Securities on such date at a price of
approximately [100.5]% (but not less than [100]%) of the Remarketing Treasury
Portfolio Purchase Price, plus accrued and unpaid interest, if any, on the
Pledged Debt Securities. After deducting as the Remarketing Fee an amount not
exceeding __ basis points (.__%) of the Remarketing Treasury Portfolio Purchase
Price from any amount of such Proceeds in excess of the sum of (i) Remarketing
Treasury Portfolio Purchase Price, plus (ii) the amount of accrued and unpaid
interest, if any, on the Pledged Debt Securities, the Remarketing Agent will
remit the entire amount of the Proceeds of such remarketing to the Collateral
Agent on or prior to 12:00 p.m., New York City time on the Initial Reset Date.
In the event the Collateral Agent receives such Proceeds, the Collateral Agent
will, at the written direction of the Company, apply an amount equal to the
Remarketing Treasury Portfolio Purchase Price to purchase from the Quotation
Agent the Remarketing Treasury Portfolio and remit the remaining portion of such
Proceeds, if any, to the Purchase Contract Agent for payment to the Holders of
Corporate Units. The Collateral Agent shall Transfer the Remarketing Treasury
Portfolio to the Collateral Account to secure the obligation of all Holders of
Corporate Units to purchase Common Stock of the Company under the Purchase
Contracts constituting a part of such Corporate Units, in substitution for the
Pledged Debt Securities. Thereafter the Collateral Agent shall have such
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security interests, rights and obligations with respect to the Remarketing
Treasury Portfolio as it had in respect of the Pledged Debt Securities as
provided in Articles II, III, IV, V and VI hereof, and any reference herein to
the Pledged Debt Securities shall be deemed to be a reference to such
Remarketing Treasury Portfolio, and any reference herein to interest on the Debt
Securities shall be deemed to be a reference to distributions on such
Remarketing Treasury Portfolio.
SECTION 6.4 SUBSTITUTIONS.
Whenever a Holder has the right to substitute Treasury Securities,
Debt Securities or the appropriate Applicable Ownership Interest in a Treasury
Portfolio, as the case may be, for Collateral held by the Collateral Agent, such
substitution shall not constitute a novation of the security interest created
hereby.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.1 REPRESENTATIONS AND WARRANTIES.
The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any representation or warranty made by or on
behalf of a Holder), hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each day a Holder
Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and
lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and,
in the case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under Article II
hereof;
(c) upon the Transfer of the Collateral to the Collateral Account or
physical delivery of the Debt Securities to the Collateral Agent, the Collateral
Agent, for the benefit of the Company, will have a valid and perfected first
priority security interest therein (assuming that any central clearing operation
or any Intermediary or other entity not within the control of the Holder
involved in the Transfer of the Collateral, including the Collateral Agent,
gives the notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the establishment
and exercise of control pursuant to Section 2.2 hereof); and
(d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security interest,
lien or other encumbrance on the Collateral other than the security interest and
lien granted under Article II hereof or violate any provision of any existing
law or regulation applicable to it or of any mortgage, charge, pledge,
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indenture, contract or undertaking to which it is a party or which is binding on
it or any of its assets.
SECTION 7.2 COVENANTS.
The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any covenant made by or on behalf of a Holder),
hereby covenant to the Collateral Agent that for so long as the Collateral
remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will create
or purport to create or allow to subsist any mortgage, charge, lien, pledge or
any other security interest whatsoever over the Collateral or any part of it
other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the pledge hereunder,
transferred in connection with the Transfer of the Securities.
ARTICLE VIII.
THE COLLATERAL AGENT
SECTION 8.1 APPOINTMENT, POWERS AND IMMUNITIES.
The Collateral Agent shall act as agent for the Company hereunder with
such powers as are specifically vested in the Collateral Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Each of the Collateral Agent, the Custodial Agent and the Securities
Intermediary: (a) shall have no duties or responsibilities except those
expressly set forth in or incorporated into this Agreement and no implied
covenants or obligations shall be inferred from this Agreement against any of
them, nor shall any of them be bound by the provisions of any agreement by any
party hereto beyond the specific or incorporated terms hereof; (b) shall not be
responsible for any recitals contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by it under, this
Agreement, the Securities or the Purchase Contract Agreement (except as
specifically incorporated by reference herein), or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
(other than as against the Collateral Agent, the Custodial Agent or the
Securities Intermediary), the Securities or the Purchase Contract Agreement or
any other document referred to or provided for herein (except as specifically
incorporated by reference herein) or therein or for any failure by the Company
or any other Person (except the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be) to perform any of its obligations
hereunder or thereunder or for the perfection, priority or, except as expressly
required hereby, maintenance of any security interest created hereunder; (c)
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder (except in the case of the Collateral Agent, pursuant to
directions furnished under Section 8.2 hereof, subject to Section 8.6 hereof);
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(d) shall not be responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to or provided for
herein or in connection herewith or therewith, except for its own negligence or
willful misconduct; and (e) shall not be required to advise any party as to
selling or retaining, or taking or refraining from taking any action with
respect to, the Securities or other property deposited hereunder in accordance
with the terms hereof. Subject to the foregoing, during the term of this
Agreement, the Collateral Agent shall take all reasonable action in connection
with the safekeeping and preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the Value of
the Collateral. Notwithstanding the foregoing, the Collateral Agent, the
Custodial Agent and the Securities Intermediary, each in its individual
capacity, hereby waive any right of setoff, bankers lien, liens or perfection
rights as Securities Intermediary or any counterclaim with respect to any of the
Collateral.
SECTION 8.2 INSTRUCTIONS OF THE COMPANY.
The Company shall have the right, by one or more instruments in
writing executed and delivered to the Collateral Agent, the Custodial Agent or
the Securities Intermediary, as the case may be, to direct the time, method and
place of conducting any proceeding for the realization of any right or remedy
available to the Collateral Agent, or of exercising any power conferred on the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, or to direct the taking or refraining from taking of any action
authorized by this Agreement; provided, however, that (i) such direction shall
not conflict with the provisions of any law or of this Agreement and (ii) the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall be
adequately indemnified as provided herein. Nothing in this Section 8.2 shall
impair the right of the Collateral Agent in its discretion to take any action or
omit to take any action which it deems proper and which is not inconsistent with
such direction.
SECTION 8.3 RELIANCE BY COLLATERAL AGENT.
Each of the Securities Intermediary, the Custodial Agent and the
Collateral Agent shall be entitled conclusively to rely upon any certification,
order, judgment, opinion, notice or other communication (including, without
limitation, any thereof by telephone, telecopy, telex or facsimile) believed by
it to be genuine and correct and to have been signed or sent by or on behalf of
the proper Person or Persons (without being required to determine the
correctness of any fact stated therein), and upon advice and statements of legal
counsel and other experts selected by the Collateral Agent, the Custodial Agent
or the Securities Intermediary, as the case may be. As to any matters not
expressly provided for by this Agreement, the Collateral Agent, the Custodial
Agent and the Securities Intermediary shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
given by the Company in accordance with this Agreement.
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SECTION 8.4 RIGHTS IN OTHER CAPACITIES.
The Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may (without having to account therefor to the
Company) accept deposits from, lend money to, make their investments in and
generally engage in any kind of banking, trust or other business with the
Purchase Contract Agent and any Holder of Securities (and any of their
respective subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, and the Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent and any Holder of Securities without having to
account for the same to the Company; provided that each of the Securities
Intermediary, the Custodial Agent and the Collateral Agent covenants and agrees
with the Company that it shall not accept, receive or permit there to be created
in favor of itself and shall take no affirmative action to permit there to be
created in favor of any other Person, any security interest, lien or other
encumbrance of any kind in or upon the Collateral.
SECTION 8.5 NON-RELIANCE ON COLLATERAL AGENT.
None of the Securities Intermediary, the Custodial Agent or the
Collateral Agent shall be required to keep itself informed as to the performance
or observance by the Purchase Contract Agent or any Holder of Securities of this
Agreement, the Purchase Contract Agreement, the Securities or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Purchase Contract Agent or any Holder of Securities. The Collateral
Agent, the Custodial Agent and the Securities Intermediary shall not have any
duty or responsibility to provide the Company with any credit or other
information concerning the affairs, financial condition or business of the
Purchase Contract Agent or any Holder of Securities (or any of their respective
affiliates) that may come into the possession of the Collateral Agent, the
Custodial Agent or the Securities Intermediary or any of their respective
affiliates.
SECTION 8.6 COMPENSATION AND INDEMNITY.
The Company agrees: (i) to pay each of the Collateral Agent and the
Custodial Agent from time to time such compensation as shall be agreed in
writing between the Company and the Collateral Agent or the Custodial Agent, as
the case may be, for all services rendered by each of them hereunder and (ii) to
indemnify the Collateral Agent, the Custodial Agent and the Securities
Intermediary for, and to hold each of them harmless from and against, any loss,
liability or reasonable out-of-pocket expense incurred without negligence,
willful misconduct or bad faith on its part, arising out of or in connection
with the acceptance or administration of its powers and duties under this
Agreement, including the reasonable out-of-pocket costs and expenses (including
reasonable fees and expenses of counsel) of defending itself against any claim
or liability in connection with the exercise or performance of such powers and
duties. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall each promptly notify the Company of any third party claim
which may give rise to indemnity hereunder and give the Company the opportunity
to participate in the defense of such claim with counsel reasonably satisfactory
to the indemnified party, and no such claim shall be settled without the written
consent of the Company, which consent shall not be unreasonably withheld.
23
SECTION 8.7 FAILURE TO ACT.
In the event of any ambiguity in the provisions of this Agreement or
any dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent and the Custodial Agent 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
neither the Collateral Agent nor the Custodial Agent shall be or become liable
in any way to any of the parties hereto for its failure or refusal to comply
with such conflicting claims, demands or instructions. The Collateral Agent and
the Custodial Agent shall be entitled to refuse to act until either (i) such
conflicting or adverse claims or demands shall have been finally determined by a
court of competent jurisdiction or settled by agreement between the conflicting
parties as evidenced in a writing, satisfactory to the Collateral Agent or the
Custodial Agent, as the case may be, or (ii) the Collateral Agent or the
Custodial Agent, as the case may be, shall have received security or an
indemnity satisfactory to the Collateral Agent or the Custodial Agent, as the
case may be, sufficient to save the Collateral Agent or the Custodial Agent, as
the case may be, harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which the Collateral Agent or the Custodial
Agent, as the case may be, may without negligence, willful misconduct, or bad
faith on its part incur by reason of its acting. The Collateral Agent or the
Custodial Agent may in addition elect to commence an interpleader action or seek
other judicial relief or orders as the Collateral Agent or the Custodial Agent,
as the case may be, may deem necessary. Notwithstanding anything contained
herein to the contrary, neither the Collateral Agent nor the Custodial Agent
shall be required to take any action that is in its opinion contrary to law or
to the terms of this Agreement, or which would in its opinion subject it or any
of its officers, employees or directors to liability.
SECTION 8.8 RESIGNATION OF COLLATERAL AGENT.
Subject to the appointment and acceptance of a successor Collateral
Agent or Custodial Agent as provided below, (a) the Collateral Agent and the
Custodial 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, (b) the Collateral Agent and the Custodial Agent may be removed at
any time by the Company and (c) if the Collateral Agent or the Custodial 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 or the Custodial 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 (c) of the
immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent or
Custodial Agent, as the case may be. If no successor Collateral Agent or
Custodial Agent, as the case may be, shall have been so appointed and shall have
accepted such appointment within 30 days after the retiring Collateral Agent's
or Custodial Agent's giving of notice of resignation or such removal, then the
retiring Collateral Agent or Custodial Agent, as the case may be, may petition
any court of competent jurisdiction for the appointment of a successor
Collateral Agent or Custodial Agent, as the case may be. Each of the Collateral
Agent and the Custodial Agent shall be a bank which has an office in ▇▇▇ ▇▇▇▇,
▇▇
▇▇▇ ▇▇▇▇ with a combined capital and surplus of at least $75,000,000. Upon the
acceptance of any appointment as Collateral Agent or Custodial Agent, as the
case may be, hereunder by a successor Collateral Agent or Custodial Agent, as
the case may be, such successor shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent or Custodial Agent, as the case may be, and the retiring Collateral Agent
or Custodial Agent, as the case may be, shall take all appropriate action to
transfer any money and property held by it hereunder (including the Collateral)
to such successor. The retiring Collateral Agent or Custodial Agent shall, upon
such succession, be discharged from its duties and obligations as Collateral
Agent or Custodial Agent hereunder. After any retiring Collateral Agent's or
Custodial Agent's resignation hereunder as Collateral Agent or Custodial Agent,
the provisions of this Article VIII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Collateral Agent or Custodial Agent. Any resignation or removal of the
Collateral Agent hereunder shall be deemed for all purposes of this Agreement as
the simultaneous resignation or removal of the Custodial Agent and the
Securities Intermediary.
SECTION 8.9 RIGHT TO APPOINT AGENT OR ADVISOR.
The Collateral Agent shall have the right to appoint agents or
advisors in connection with any of its duties hereunder, and the Collateral
Agent shall not be liable for any action taken or omitted by, or in reliance
upon the advice of, such agents or advisors selected in good faith. The
appointment of agents pursuant to this Section 8.9 shall be subject to prior
consent of the Company, which consent shall not be unreasonably withheld.
SECTION 8.10 SURVIVAL.
The provisions of this Article VIII shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent or the
Custodial Agent.
SECTION 8.11 EXCULPATION.
Anything in this Agreement to the contrary notwithstanding, in no
event shall any of the Collateral Agent, the Custodial Agent or the Securities
Intermediary or their officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Collateral Agent, the
Custodial Agent or the Securities Intermediary, or any of them, incurred without
any act or deed that is found to be attributable to gross negligence or willful
misconduct on the part of the Collateral Agent, the Custodial Agent or the
Securities Intermediary.
ARTICLE IX.
AMENDMENT
SECTION 9.1 AMENDMENT WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders or the holders of any Separate Debt
Securities, the Company, the Collateral Agent, the Custodial Agent, the
25
Securities Intermediary and the Purchase Contract Agent, at any time and from
time to time, may amend this Agreement, in form satisfactory to the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, for any of the following purposes:
(a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company; or
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company so
long as such covenants or such surrender do not adversely affect the validity,
perfection or priority of the security interests granted or created hereunder;
or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Custodial Agent, Securities
Intermediary or Purchase Contract Agent; or
(d) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other such provisions herein, or to
make any other provisions with respect to such matters or questions arising
under this Agreement, provided such action shall not adversely affect the
interests of the Holders.
SECTION 9.2 AMENDMENT WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of said Holders delivered to
the Company, the Purchase Contract Agent or the Collateral Agent, as the case
may be, the Company, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided, however, that no
such supplemental agreement shall, without the consent of the Holder of each
Outstanding Security adversely affected thereby,
(a) change the amount or type of Collateral underlying a Security
(subject to the rights of Holders to make Collateral Substitutions as
contemplated by Sections 4.1 and 4.2), impair the right of the Holder of any
Security to receive distributions on the underlying Collateral or otherwise
adversely affect the Holder's rights in or to such Collateral; or
(b) otherwise effect any action that would require the consent of the
Holder of each Outstanding Security affected thereby pursuant to the Purchase
Contract Agreement if such action were effected by an agreement supplemental
thereto; or
(c) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment.
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.
26
SECTION 9.3 EXECUTION OF AMENDMENTS.
In executing any amendment permitted by this Section, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent shall be entitled to receive and (subject to Section 6.1 hereof,
with respect to the Collateral Agent, and Section 7.1 of the Purchase Contract
Agreement, with respect to the Purchase Contract Agent) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such amendment have been
satisfied.
SECTION 9.4 EFFECT OF AMENDMENTS.
Upon the execution of any amendment under this Article IX, this
Agreement shall be modified in accordance therewith, and such amendment shall
form a part of this Agreement for all purposes; and every Holder of Securities
theretofore or thereafter authenticated, executed on behalf of the Holders and
delivered under the Purchase Contract Agreement shall be bound thereby.
SECTION 9.5 REFERENCE TO AMENDMENTS.
Security Certificates authenticated, executed on behalf of the Holders
and delivered after the execution of any amendment pursuant to this Article IX
may, and shall if required by the 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.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1 NO WAIVER.
No failure on the part of the Collateral Agent or any of its agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Collateral Agent or any of its
agents of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.
SECTION 10.2 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. Without limiting the foregoing, the above
27
choice of law is expressly agreed to by the Company, the Securities
Intermediary, the Custodial Agent, the Collateral Agent and the Holders from
time to time acting through the Purchase Contract Agent, as their
attorney-in-fact, in connection with the establishment and maintenance of the
Collateral Account. The Company, the Collateral Agent and the Holders from time
to time of the Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Company, the Collateral Agent and the Holders from time to time of
the Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 10.3 NOTICES.
All notices, requests, consents and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing (including,
without limitation, by telecopy) delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof (or
in the case of Holders, may be made and deemed given as provided in Sections 1.5
and 1.6 of the Purchase Contract Agreement) 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 (except as aforesaid).
SECTION 10.4 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
and the Holders from time to time of the Securities, by their acceptance of the
same, shall be deemed to have agreed to be bound by the provisions hereof and to
have ratified the agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.
SECTION 10.5 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
SECTION 10.6 SEVERABILITY.
If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
28
hereto as nearly as may be possible and (ii) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7 EXPENSES, ETC.
The Company agrees to reimburse the Collateral Agent and the Custodial
Agent for: (a) all reasonable out-of-pocket costs and expenses of the Collateral
Agent and the Custodial Agent (including, without limitation, the reasonable
fees and expenses of the necessary services of a Securities Intermediary and of
counsel to the Collateral Agent and the Custodial Agent), in connection with
(i) the negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
SECTION 10.8 SECURITY INTEREST ABSOLUTE.
All rights of the Collateral Agent and security interests hereunder,
and all obligations of the Holders from time to time hereunder, shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the obligations
of Holders of Securities under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
29
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed as of the day and year first above written.
TXU CORP.
By:
---------------------------------
Name:
Title:
Address for Notices:
TXU Corp.
Energy Plaza
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Attention:
Telecopy:
THE BANK OF NEW YORK as
Purchase Contract Agent and
as attorney-in-fact of the
Holders from time to time
of the Securities
By:
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Name:
Title:
Address for Notices:
The Bank of New York
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Attention: Corporate Trust
Administration
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30
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as Collateral Agent, Custodial
Agent and as Securities Intermediary
By:
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Name:
Title:
Address for Notices:
31
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
___________________, as Collateral Agent
Attention: _____________________
Re: Securities of TXU Corp. (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of ____________ (the "Pledge Agreement"), among the
Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the Holders of [Corporate Units] [Treasury Units] from time to time, that
the Holder of securities listed below (the "Holder") has elected to substitute
$____ [principal amount at maturity of Treasury Securities] [principal amount of
Debt Securities] [the Applicable Ownership Interest in the [Remarketing][Tax
Event] Treasury Portfolio] in exchange for an equal Value of [Pledged Debt
Securities] [the Pledged Applicable Ownership Interest in the [Remarketing] [Tax
Event] Treasury Portfolio] [Pledged Treasury Securities] held by you in
accordance with the Pledge Agreement and has delivered to us a notice stating
that the Holder has Transferred [Debt Securities] [the Applicable Ownership
Interest in the [Remarketing] [Tax Event] Treasury Portfolio] [Treasury
Securities] to you, as Collateral Agent. We hereby instruct you, upon receipt of
such [Treasury Securities] [Debt Securities] [Applicable Ownership Interest in
the [Remarketing] [Tax Event] Treasury Portfolio] so Transferred, to release the
[Pledged Debt Securities] [Pledged Applicable Ownership Interest in the
[Remarketing] [Tax Event] Treasury Portfolio] [Pledged Treasury Securities]
related to such [Corporate Units] [Treasury Units] to us in accordance with the
Holder's instructions. Capitalized terms used herein but not defined shall have
the meaning set forth or incorporated by reference in the Pledge Agreement.
Date:
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By:
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Name:
Title:
Signature Guarantee:
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Please print name and address of registered Holder electing to substitute
[Treasury Securities] [Debt Securities] [Applicable Ownership Interest in a
Treasury Portfolio] for [Pledged Debt Securities or Pledged Applicable Ownership
Interest in a Treasury Portfolio] [Pledged Treasury Securities]:
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Name Social Security or other Taxpayer
Identification Number, if any
Address
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EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
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Attention: Corporate Trust Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Re: Securities of TXU Corp. (the "Company")
The undersigned Holder hereby notifies you that it has delivered to
________, as Collateral Agent, $____ [principal amount at maturity of Treasury
Securities] [principal amount of Debt Securities] [of the appropriate Applicable
Ownership Interest in the [Remarketing] [Tax Event] Treasury Portfolio] in
exchange for an equal Value of [Pledged Debt Securities or the Pledged
Applicable Ownership Interest in the [Remarketing] [Tax Event] Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities] held by the
Collateral Agent, in accordance with Section [4.1] [4.2] of the Pledge
Agreement, dated as of_______________ (the "Pledge Agreement"), among you, the
Company and the Collateral Agent. The undersigned Holder hereby instructs you to
instruct the Collateral Agent to release to you on behalf of the undersigned
Holder the [Pledged Debt Securities or the Pledged Applicable Ownership Interest
in the [Remarketing] [Tax Event] Treasury Portfolio] [Pledged Treasury
Securities] related to such [Corporate Units] [Treasury Units]. Capitalized
terms used herein but not defined shall have the meaning set forth or
incorporated by reference in the Pledge Agreement.
Date:
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Signature Guarantee:
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Please print name and address of Registered Holder:
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Name Social Security or other Taxpayer
Identification Number, if any
Address
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EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
Re: Securities of TXU Corp. (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of ____________ (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from time
to time, that the undersigned elects to deliver $________ principal amount of
Debt Securities for delivery to the Remarketing Agent on the Business Day
immediately preceding the [Initial Remarketing Date] [Secondary Remarketing
Date] for remarketing pursuant to Section 4.6(c) of the Pledge Agreement. The
undersigned will, upon request of the Remarketing Agent, execute and deliver any
additional documents deemed by the Remarketing Agent or by the Company to be
necessary or desirable to complete the sale, assignment and transfer of the Debt
Securities tendered hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions". The undersigned hereby instructs you, in the event of
Failed Remarketing, upon receipt of the Debt Securities tendered herewith from
the Remarketing Agent, to deliver such Debt Securities to the person(s) and the
address(es) indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Debt Securities tendered hereby and that the undersigned is the
record owner of any Debt Securities tendered herewith in physical form or a
participant in The Depository Trust Company ("DTC") and the beneficial owner of
any Debt Securities tendered herewith by book-entry transfer to your account at
DTC and (ii) agrees to be bound by the terms and conditions of Section 4.6(c) of
the Pledge Agreement. Capitalized terms used herein but not defined shall have
the meaning set forth or incorporated by reference in the Pledge Agreement.
Date:
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By:
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Name:
Title:
Signature Guarantee:
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Please print name and address:
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Name Social Security or other Taxpayer
Identification Number, if any
Address
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A. PAYMENT INSTRUCTIONS B. DELIVERY INSTRUCTIONS
Proceeds of the remarketing should be In the event of a Failed Remarketing,
paid by check in the name of the Debt Securities that are in physical
person(s) set forth below and mailed to form should be delivered to the
the address set forth below. person(s) set forth below and mailed
to the address set forth below.
Name(s) Name(s)
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(Please Print) (Please Print)
Address Address
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(Please Print)
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(Please Print) --------------------------------------
(Zip Code)
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(Zip Code) --------------------------------------
(Tax Identification or
------------------------------------ Social Security Number)
(Tax Identification or Social
Security Number)
In the event of a Failed Remarketing,
Debt Securities that are in book-entry
form should be credited to the
account at The Depositary Trust
Company set forth below.
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DTC Account Number
Name of Account
Party:
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EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
______________, as Custodial Agent
Attention: _____________________
Re: Securities of TXU Corp. (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of ___________ (the "Pledge Agreement"), among
the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from time
to time, that the undersigned elects to withdraw the $_____ principal amount of
Debt Securities delivered to the Custodial Agent on ____________ for remarketing
pursuant to Section 4.6(c) of the Pledge Agreement. The undersigned hereby
instructs you to return such Debt Securities to the undersigned in accordance
with the undersigned's instructions. With this notice, the Undersigned hereby
agrees to be bound by the terms and conditions of Section 4.6(c) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth or incorporated in the Pledge Agreement.
Date:
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By:
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Name:
Title:
Signature Guarantee:
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Please print name and address:
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Name Social Security or other Taxpayer
Identification Number, if any
Address
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