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PLEDGE AGREEMENT
AMONG
DQE, INC.
AND
___________________, AS COLLATERAL AGENT
AND
__________________,
AS SECURITIES INTERMEDIARY
AND
BANK ONE TRUST COMPANY, NA, AS PURCHASE CONTRACT AGENT
__________________________
DATED AS OF _________, 200_
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TABLE OF CONTENTS
PAGE
Section 1. Definitions........................................................2
Section 2. Pledge.............................................................6
Section 2.1 Pledge.....................................................6
Section 2.2 Control: Financing Statement...............................7
Section 2.3 Termination................................................7
Section 3. Distributions on Pledged Collateral................................7
Section 3.1 Income Distributions.......................................7
Section 3.2 Principal Payments Following Termination Event.............7
Section 3.3 Assets Not Properly Released...............................8
Section 4. Control............................................................8
Section 4.1 Establishment of Collateral Account........................8
Section 4.2 Treatment as Financial Assets..............................9
Section 4.3 Sole Control by Collateral Agent...........................9
Section 4.4 Securities Intermediary's Location.........................9
Section 4.5 No Other Claims............................................9
Section 4.6 Investment and Release.....................................9
Section 4.7 Statements and Confirmations...............................9
Section 4.8 Tax Allocations...........................................10
Section 4.9 No Other Agreements.......................................10
Section 4.10 Powers Coupled With An Interest...........................10
Section 5. Initial Deposit, Creation of Treasury Units and Recreation of
Corporate Units Other.............................................10
Section 5.1 Initial Deposit of Debt Securities........................10
Section 5.2 Creation of Treasury Units by Substitution of Treasury
Securities................................................10
Section 5.3 Recreation of Corporate Units.............................12
Section 5.4 Termination Event.........................................13
Section 5.5 Cash Settlement...........................................14
Section 5.6 Early Settlement: Merger Early Settlement.................16
Section 5.7 Optional Remarketing......................................16
Section 5.8 Application of Proceeds in Settlement: Remarketing........17
Section 6. Voting Rights.....................................................21
Section 7. Rights and Remedies...............................................21
Section 7.1 Rights and Remedies of the Collateral Agent...............21
Section 7.2 Substitutions.............................................22
Section 8. Representations and Warranties: Covenants.........................22
Section 8.1 Representations and Warranties............................22
Section 8.2 Covenants.................................................23
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Section 9. The Collateral Agent and the Securities Intermediary..............23
Section 9.1 Appointment, Powers and Immunities........................23
Section 9.2 Instructions of the Company...............................24
Section 9.3 Reliance by Collateral Agent and Securities Intermediary..25
Section 9.4 Rights in Other Capacities................................25
Section 9.5 Non-Reliance on Collateral Agent and Securities
Intermediary..............................................26
Section 9.6 Compensation and Indemnity................................26
Section 9.7 Failure to Act............................................26
Section 9.8 Resignation of Collateral Agent and Securities
Intermediary .............................................27
Section 9.9 Right to Appoint Agent or Advisor.........................28
Section 9.10 Survival .................................................29
Section 9.11 Exculpation ..............................................29
Section 10. Amendment.........................................................29
Section 10.1 Amendment Without Consent of Holders......................29
Section 10.2 Amendment with Consent of Holders.........................30
Section 10.3 Execution of Amendments...................................30
Section 10.4 Effect of Amendments......................................31
Section 10.5 Reference to Amendments...................................31
Section 11. Merger, Consolidation, Sale or Conveyance.........................31
Section 11.1 When Company May Merge, Etc...............................31
Section 11.2 Successor Corporation Substituted.........................31
Section 11.3 Limitation................................................32
Section 12. Miscellaneous.....................................................32
Section 12.1 No Waiver.................................................32
Section 12.2 Governing Law; Jurisdiction and Venue.....................32
Section 12.3 Notices...................................................33
Section 12.4 Successors and Assigns....................................33
Section 12.5 Counterparts..............................................34
Section 12.6 Effect of Headings and Table of Contents..................34
Section 12.7 Severability..............................................34
Section 12.8 Expenses, etc.............................................34
Section 12.9 Security Interest Absolute................................35
EXHIBITS
EXHIBIT A Instruction from Purchase Contract Agent to Collateral
Agent (Creation of Treasury Units).........................A-1
EXHIBIT B Instruction from Collateral Agent to Securities
Intermediary (Creation of Treasury Units) .................B-1
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PAGE
EXHIBIT C Instruction from Purchase Contract Agent to Collateral
Agent (Recreation of Corporate Units) .....................C-1
EXHIBIT D Instruction from Collateral Agent to Securities
Intermediary (Recreation of Corporate Units) ..............D-1
EXHIBIT E Notice of Cash Settlement from the Securities
Intermediary to the Purchase Contract Agent................E-1
EXHIBIT F Instruction from Holder of Separated Debt Securities
to Collateral Agent Regarding Remarketing..................F-1
EXHIBIT G Instruction from Purchase Contract Agent to
Collateral Agent...........................................G-1
EXHIBIT H Agency and Custody Account Direction for Cash Balances.....H-1
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PLEDGE AGREEMENT, dated as of __________, 200_, among DQE, INC., a
Pennsylvania corporation (the "Company"), ____________________, not individually
but solely as collateral agent (in such capacity, together with its successors
in such capacity, the "Collateral Agent"), ____________________, not
individually but solely in its capacity as "Securities Intermediary" (in such
capacity, together with its successors in such capacity, the "Securities
Intermediary") as defined in Section 8-102(a)(14) of the UCC (as hereinafter
defined) with respect to the Collateral Account (as hereinafter defined), and
Bank One Trust Company, NA, not individually but solely as purchase contract
agent and as attorney-in-fact of the Holders from time to time of the Units (in
such capacity, together with its successors in such capacity, the "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 amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"Purchase Contract Agreement"), pursuant to which there are being issued
__________ Units (or up to __________, if the Underwriters' over-allotment
option pursuant to the Underwriting Agreement is exercised in full) (the
"Units"), all of which will initially be Corporate Units.
Each Corporate Unit consists of a unit comprised of (a) one stock purchase
contract (a "Purchase Contract") under which the Holder will purchase from the
Company and the Company will be required to sell to such Holder not later than
the Purchase Contract Settlement Date, for an amount equal to $50 (the "Stated
Amount"), a number of shares of Common Stock of the Company equal to the
Settlement Rate or Early Settlement Rate, as the case may be, then in effect and
(b) either beneficial ownership of (1) a Debt Security or (2) following the
Remarketing of the Debt Security in accordance with the Purchase Contract
Agreement and the Remarketing Agreement, the Treasury Portfolio Interest,
subject to the termination or settlement of the Purchase Contracts.
In accordance with the terms of the Purchase Contract Agreement, a Holder
of Corporate Units may separate the Debt Securities from the related Purchase
Contracts by substituting on or before the Election Date, for such Debt
Securities, Treasury Securities that will pay on maturity in the aggregate an
amount equal to the aggregate Stated Amount of such Corporate Units. Upon such
substitution, the Corporate Units will become Treasury Units in accordance with
the terms of the Purchase Contract Agreement. Each Treasury Unit will be
comprised of (a) a Purchase Contract under which the holder will purchase from
the Company not later than the Purchase Contract Settlement Date, for the Stated
Amount, a number of shares of Common Stock of the Company equal to the
Settlement Rate or Early Settlement Rate, as the case may be, then in effect,
and (b) a 1/20 undivided beneficial interest in a Treasury Security, subject to
the termination or settlement of the Purchase Contracts.
Pursuant to the terms of the Purchase Contract Agreement and the Purchase
Contracts, the Holders, from time to time, of the Units have irrevocably
authorized the Purchase Contract Agent, as attorney-in-fact of such Holders,
among other things, to execute and deliver this Agreement on behalf of such
Holders and to grant the pledge provided herein of the Collateral Account to
secure the Obligations.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact of the Holders from time to time of the Units, agree as
follows:
Section 1 Definitions For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Section have the meanings assigned
to them in this Section 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
Section, Exhibit or other section;
(c) the following terms which are defined in the UCC shall have
the meanings set forth therein: "certificated security," "control," "financial
asset," "entitlement order," "securities account" and "security entitlement";
(d) capitalized terns used and not defined in this Agreement
shall have the meanings set forth in the Purchase Contract Agreement; and
(e) the following terms have the meanings given to them in this
Section 1(e):
"Account Direction" means the Agency and Custody Account Direction for
Cash Balances in the form of Exhibit H attached hereto, as executed and
delivered to the Collateral Agent by the Company from time to time.
"Agreement" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time in accordance with the terms thereof.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Collateral" means the collective reference to:
(1) the Collateral Account;
(2) all investment property and other financial assets and other
property and credit balances from time to time credited to the Collateral
Account, including, without limitation, (A) any Debt Securities or any
Treasury Portfolio Interest which are then a component of the Corporate
Units and, in each case, security entitlements relating thereto, (B) any
Treasury Securities and security entitlements relating thereto delivered
from time to time upon establishment of Treasury Units in accordance with
Section 5.2 hereof and (C) payments made by Holders pursuant to Section
5.5 hereof;
(3) all Proceeds of any of the foregoing (whether such Proceeds
arise before or after the commencement of any proceeding under any
applicable bankruptcy, insolvency or other similar law, by or against the
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pledgor or with respect to the pledgor); and
(4) all powers and rights now owned or hereafter acquired under or
with respect to the Collateral Account.
"Collateral Account" means the Securities Account No.__________
entitled "__________" maintained by the Securities Intermediary for the
Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders.
"Collateral Agent" means the Person named as the "Collateral Agent" in the
first paragraph of this instrument until a successor shall have become such in
accordance with the terms of this Agreement, and thereafter "Collateral Agent"
shall mean such successor.
"Collateral Substitution" means the substitution of Treasury Securities
for a Holder's Debt Securities, pursuant to Section 3.13 of the Purchase
Contract Agreement and Section 5.2 of this Agreement, and the substitution of a
Holder's Debt Securities for Treasury Securities, pursuant to Section 3.14 of
the Purchase Contract Agreement and Section 5.3 of this Agreement.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such in accordance with
the terms of this Agreement, and thereafter "Company" shall mean such successor.
"Custodian" has the meaning set forth in Section 5.2(c).
"Final Remarketing" has the meaning set forth in the Remarketing
Agreement.
"Final Remarketing Date" has the meaning set forth in the Remarketing
Agreement.
"Initial Remarketing" has the meaning set forth in the Remarketing
Agreement.
"Initial Remarketing Date" has the meaning set forth in Remarketing
Agreement.
"Obligations" means, with respect to each Holder, the collective reference
to all obligations and liabilities of such Holder under such Holder's Purchase
Contract and this Agreement or any other document made, delivered or given in
connection herewith or therewith, in each case whether on account of principal,
interest (including, without limitation, interest accruing before and after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Holder, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
fees, indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Company or the Collateral Agent or
the Securities Intermediary that are required to be paid by the Holder pursuant
to the terms of any of the foregoing agreements).
"Permitted Investments" means any one of the following which shall mature
not later than the Purchase Contract Settlement Date:
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(1) any evidence of indebtedness with an original maturity of 365
days or less issued, or directly and fully guaranteed or insured, by the
United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America
is pledged in support of the timely payment thereof or such indebtedness
constitutes a general obligation of it);
(2) deposits, certificates of deposit or acceptances with an
original maturity of 365 days or less of any institution which is a member
of the Federal Reserve System having combined capital and surplus and
undivided profits of not less than $200,000,000 at the time of deposit,
which may include the Collateral Agent or any of its affiliates;
(3) investments with an original maturity of 365 days or less of any
Person that are fully and unconditionally guaranteed by a bank referred to
in clause (2);
(4) repurchase agreements and reverse repurchase agreements relating
to marketable direct obligations issued or unconditionally guaranteed by
the United States Government or issued by any agency thereof and backed as
to timely payment by the fall faith and credit of the United States
Government;
(5) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated
under the laws of the United States or any State thereof, which commercial
paper has a rating at the time of purchase at least equal to "____" by
Standard & Poor's Ratings Services, Inc. ("S&P") or at least equal to
"____" by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"); and
(6) investments in money market funds registered under the
Investment Company Act of 1940, as amended, rated in the highest
applicable rating category by S&P or Moody's, which may include such money
market funds offered, administered or serviced by the Collateral Agent or
any of its affiliates.
"Pledge" means the lien and security interest created by this Agreement.
"Pledged Debt Securities" means the Debt Securities, which shall be in
certificated form, and security entitlements with respect thereto from time to
time credited to the Collateral Account and not then released from the Pledge.
"Pledged Treasury Portfolio Interest" means the Treasury Portfolio
Interest and security entitlements with respect thereto from time to time
credited to the Collateral Account and not then released from the Pledge.
"Pledged Treasury Securities" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.
"Proceeds" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, Cash, instruments, securities,
financial assets (as defined in ss. 8-102(a)(9) of the UCC) and other property
received, receivable or otherwise distributed upon the sale, exchange,
4
collection or disposition of any financial assets from time to time held in the
Collateral Account.
"Purchase Contract Agent" means the Person named as the "Purchase Contract
Agent" in the first paragraph of this instrument until a successor shall have
become such in accordance with the terms of the Purchase Contract Agreement, and
thereafter "Purchase Contract Agent" shall mean such successor.
"Purchase Contract Agreement" has the meaning specified in the paragraph
preceding the recitals of this Agreement.
"Purchase Contract Settlement Date" means _______________, 200_.
"Remarketing" means the remarketing of the Remarketing Debt Securities
pursuant to the Remarketing Procedures.
"Remarketing Date" has the meaning set forth in the Purchase Contract
Agreement.
"Remarketing Fee" has the meaning set forth in Section 5.8(a).
"Remarketing Procedures" means, collectively, the procedures and
requirements relating to the Remarketing and the determination of the Reset Rate
as set forth in the Indenture, the Purchase Contract Agreement, this Agreement
and the Remarketing Agreement.
"Remarketing Debt Securities" has the meaning set forth in Section 5.8(a).
"Remarketing Settlement Date" has the meaning set forth in Section 5.8(a).
"Reset Rate" has the meaning set forth in the Indenture.
"Securities Intermediary" means the Person named as the "Securities
Intermediary" in the first paragraph of this instrument until a successor shall
have become such in accordance with the terms of this Agreement, and thereafter
"Securities Intermediary" shall mean such successor.
"Separated Debt Securities" means any Debt Securities that are not Pledged
Debt Securities.
"Stated Amount" has the meaning specified in the second paragraph of the
recitals of this Agreement.
"Subsequent Remarketing" has the meaning specified in the Remarketing
Agreement.
"Subsequent Remarketing Date" has the meaning specified in the Remarketing
Agreement.
"Successful Final Remarketing" has the meaning set forth in Section
5.8(b).
"Successful Initial Remarketing" has the meaning set forth in Section
5.8(a).
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"Successful Remarketing" has the meaning specified in the Remarketing
Agreement.
"Successful Subsequent Remarketing" has the meaning set forth in Section
5.8(a).
"TRADES" means the Treasury/Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.
"TRADES Regulations" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, an amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations are
used herein as therein defined.
"Transfer" means:
(1) in the case of certificated securities in registered form,
delivery as provided inss. 8-301(a) of the UCC, indorsed to the transferee
or in blank by an effective indorsement
(2) in the case of Treasury Securities, registration of the
transferee as the owner of such Treasury Securities on TRADES; and
(3) in the case of security entitlements, including, without
limitation, security entitlements with respect to Treasury Securities, a
securities intermediary indicating by book entry that such security
entitlement has been credited to the transferee's securities account.
"Treasury Security" means a zero-coupon U.S. Treasury Security that has a
principal amount at maturity of $1,000 and matures on or prior to the. Business
Day prior to the Purchase Contract Settlement Date.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York from time to time.
"Units" has the meaning specified in the paragraph preceding the recitals
of this Agreement.
"Value" means, with respect to any item of Collateral on any date, as to
(i) Cash, the face amount thereof, (ii) Debt Securities, the aggregate principal
amount thereof due at maturity and (iii) Treasury Securities, the aggregate
principal amount thereof due at maturity and (iv) Treasury Portfolio Interest,
the aggregate principal amount thereof due at maturity.
Section 2. Pledge.
Section 2.1 Pledge.
Each Holder, acting through the Purchase Contract Agent as such
Holder's attorney-in-fact, hereby pledges and grants to the Collateral Agent, as
agent of and for the benefit of the Company, a continuing first priority
security interest in and to, and a lien upon and right of set off against, all
of such Holder's right, title and interest in and to the Collateral to secure
6
the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations. The Collateral Agent
shall have all of the rights, remedies and recourses with respect to the
Collateral afforded a secured party by the UCC, in addition to, and not in
limitation of, the other rights, remedies and recourses afforded to the
Collateral Agent by this Agreement.
Section 2.2 Control: Financing Statement.
(a) The Collateral Agent shall have control of the Collateral
Account pursuant to the provisions of Section 4.3 of this Agreement.
(b) On the date of initial issuance of the Units, the Company shall
file in the Office of the Secretary of State of the State of New York, a
financing statement identifying the Purchase Contract Agent, as attorney in-fact
for the Holders, as debtors, and the Collateral Agent, as the secured party, and
describing the Collateral.
Section 2.3 Termination.
As to each Holder, this Agreement and the Pledge created hereby
shall terminate upon the satisfaction in full, discharge or termination of such
Holder's Obligations. Upon satisfaction in full, discharge or termination of
such Holder's Obligations and written notice thereof from the Company, the
Purchase Contract Agent or holders of at least 10% of the outstanding Units to
the Securities Intermediary, the Securities Intermediary shall, Transfer any
remaining Collateral to the Purchase Contract Agent for distribution to such
Holder in accordance with its interest, free and clear of any lien, pledge or
security interest created hereby.
Section 3. Distributions on Pledged Collateral.
Section 3.1 Income Distributions.
All income distributions, including interest payments received by
the Securities Intermediary or the Collateral Agent on account of the Pledged
Debt Securities, the Pledged Treasury Portfolio Interest or Permitted
Investments from time to time held in the Collateral Account, if any, shall be
distributed to the Purchase Contract Agent for the benefit of the applicable
Holders in whose names the Corporate Units or Treasury Units are registered at
the close of business on the Record Date (as specified in the Purchase Contract
Agreement) preceding the date of such distribution as provided in the Purchase
Contract Agreement. Notwithstanding the foregoing, income distributions,
including interest payments received by the Securities Intermediary or the
Collateral Agent on account of the Treasury Portfolio Interest shall not exceed
the Treasury Portfolio Return.
Section 3.2 Principal Payments Following Termination Event.
All payments received by the Collateral Agent or the Securities
Intermediary following a Termination Event with respect to (1) the Pledged Debt
Securities or security entitlement with respect thereto, (2) the Pledged
Treasury Portfolio Interest or security entitlement with respect thereto or (3)
the Pledged Treasury Securities or security entitlement with respect thereto
shall, in each case, be distributed to the Purchase Contract Agent for the
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benefit of the applicable Holders in whose names the Corporate Units or Treasury
Units are registered at the close of business on the Record Date (as specified
in the Purchase Contract then such payment shall be made no later than 10:30
a.m. (New York City time), on the next succeeding Business Day.
Section 3.3 Assets Not Properly Released.
If the Purchase Contract Agent or any Holder shall receive any
payments on account of financial assets credited to the Collateral Account and
not released therefrom in accordance with this Agreement, the Purchase Contract
Agent or such Holder shall hold the same as trustee of an express trust for the
benefit of the Company and, upon receipt of an Officers' Certificate so
directing, promptly deliver the same to the Securities Intermediary for credit
to the Collateral Account or to the Company for application to the obligations
of the Holders under the related Purchase Contracts, and the Purchase Contract
Agent and Holders shall acquire no right, title or interest in any such payments
of amounts so received.
Section 4. Control.
Section 4.1 Establishment of Collateral Account.
The Securities Intermediary hereby confirms that:
(1) the Securities Intermediary has established the Collateral
Account;
(2) the Collateral Account is a securities account;
(3) subject to the terms of this Agreement, the Securities
Intermediary shall treat the Purchase Contract Agent as entitled to
exercise the rights that comprise any financial asset credited to the
Collateral Account;
(4) upon delivery to the Securities Intermediary of any property,
including Cash, pursuant to this Agreement, the Purchase Contract
Agreement or the Indenture, the Securities Intermediary will promptly
indicate by book-entry that such property has been credited to the
Collateral Account; and
(5) except with respect to the Pledged Debt Securities, which shall
be registered in the name of the Purchase Contract Agent, all securities,
securities entitlements or other property underlying any financial assets
credited to the Collateral Account shall be registered in the name of the
Securities Intermediary, indorsed to the Securities Intermediary, or in
blank or credited to another securities account maintained in the name of
the Securities Intermediary, and in no case will any financial asset or
other property credited to the Collateral Account be registered in the
name of the Purchase Contract Agent or any Holder, payable to the order of
the Purchase Contract Agent or any Holder or specially indorsed to. the
Purchase Contract. Agent or any Holder.
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Section 4.2 Treatment as Financial Assets.
Each item of property (whether investment property, financial asset,
security, security entitlement, instrument or Cash) credited to the Collateral
Account shall be treated as a financial asset under Article 8 of the UCC.
Section 4.3 Sole Control by Collateral Agent.
Except as provided in Section 6, at all times prior to the
termination of the Pledge, the Collateral Agent shall have sole control of the
Collateral Account, and the Securities Intermediary shall take instructions and
directions with respect to the Collateral Account solely from the Collateral
Agent. If at any time the Securities Intermediary shall receive an entitlement
order issued by the Collateral Agent and relating to the Collateral Account, the
Securities Intermediary shall comply with such entitlement order without farther
consent by the Purchase Contract Agent or any Holder or any other Person. Until
termination of the Pledge, the Securities Intermediary will not comply with any
entitlement orders issued by the Purchase Contract Agent or any Holder.
Section 4.4 Securities Intermediary's Location.
The Collateral Account and the rights and obligations of the
Securities Intermediary, the Collateral Agent, the Purchase Contract Agent and
the Holders with respect thereto shall be governed by the laws of the State of
New York. Regardless of any provision in any other agreement, for purposes of
the UCC, New York shall be deemed to be the Securities Intermediary's location.
Section 4.5 No Other Claims.
Except for the claims and interest of the Collateral Agent, the
Company, the Purchase Contract Agent and the Holders in the Collateral Account,
the Securities Intermediary does not know of any claim to, or interest in, the
Collateral Account or in any financial asset credited thereto. If any Person
asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process) against the
Collateral Account or in any financial asset carried therein, the Securities
Intermediary, upon receiving written notice thereof, will promptly notify the
Collateral Agent, the Purchase Contract Agent and the Company.
Section 4.6 Investment and Release.
All proceeds of financial assets from time to time deposited in the
Collateral Account shall be invested and reinvested as provided in this
Agreement. At all times prior to termination of the Pledge, no property shall be
released from the Collateral Account except in accordance with this Agreement or
upon written instructions of the Collateral Agent.
Section 4.7 Statements and Confirmations.
The Securities Intermediary will promptly send copies of all
statements, confirmations and other correspondence concerning the Collateral
Account and any financial assets credited thereto simultaneously to each of the
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Collateral Agent, the Purchase Contract Agent and the Company at their addresses
for notices under this Agreement.
Section 4.8 Tax Allocations.
The Company shall report all items of income, gain, expense and loss
recognized in the Collateral Account to the internal Revenue Service and all
state and local taxing authorities under the names and taxpayer identification
numbers of the Holders that are the beneficial owners thereof. None of the
Collateral Agent, the Securities Intermediary or the Purchase Contract Agent
shall have any responsibility for such tax reporting.
Section 4.9 No Other Agreements.
The Securities Intermediary has not entered into, and prior to the
termination of the Pledge will not enter into, any agreement with any other
Person relating to the Collateral Account or any financial assets credited
thereto, including, without limitation, any agreement to-comply with entitlement
orders of any Person other than the Collateral Agent.
Section 4.10 Powers Coupled With An Interest.
The rights and powers granted in this Section 4 to the Collateral
Agent have been granted in order to perfect its security interests in the
Collateral Account, are powers coupled with an interest and will be affected
neither by the bankruptcy of the Purchase Contract Agent or any Holder nor by
the lapse of time. The obligations of the Securities Intermediary under this
Section 4 shall continue in effect until the termination of the Pledge.
Section 5. Initial Deposit, Creation of Treasury Units and Recreation of
Corporate Units Other.
Section 5.1 Initial Deposit of Debt Securities.
Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Corporate Units, shall Transfer to the Securities Intermediary, and the
Securities Intermediary shall accept, for credit to the Collateral Account, the
Debt Securities or security entitlements relating to such Debt Securities, and
the Securities Intermediary shall indicate by book entry that a security
entitlement with respect to such Debt Securities has been credited to the
Collateral Account.
Section 5.2 Creation of Treasury Units by Substitution of Treasury
Securities.
(a) A Holder of Corporate Units may separate the Debt Securities
from the related Purchase Contracts in respect of such Holder's Corporate
Units by substituting for such Debt Securities Treasury Securities or
security entitlements thereto in an aggregate principal amount equal to
the aggregate principal amount of such Debt Securities, at any time from
and after the date of this Agreement until 5:00 p.m. (New York City time),
on the Election Date by:
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(1) providing notice to the Purchase Contract Agent, substantially
in the form of Exhibit C to the Purchase Contract Agreement, of such
Holder's intention to create Treasury Units;
(2) for each group of 20 Corporate Units from which such Holder
wishes to create Treasury Units, transferring a Treasury Security to the
Securities Intermediary which shall then (y) deposit the Treasury Security
with the Collateral Agent in the Collateral Account under this Agreement
and instruct the Collateral Agent to hold such Treasury Security as
Collateral under this Agreement and (z) instruct the Collateral Agent to
release to the Purchase Contract Agent, on behalf of such Holder, $1,000
principal amount of Debt Securities formerly subject to the Pledge;
(3) transferring the related Corporate Units to the Purchase
Contract Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit D to the Purchase Contract Agreement,
stating that the Holder has transferred the relevant amount of Treasury
Securities to the Securities Intermediary and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release the Debt
Securities 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; and
(4) paying to the Collateral Agent any fees or expenses incurred in
connection with the Collateral Substitution;
provided that, Holders may make Collateral Substitutions only in integral
multiples of 20 Corporate Units. Under no circumstances may a Holder of
Corporate Units create Treasury Units after 5:00 p.m. (New York City time) on
the Election Date.
Upon receipt from the Purchase Contract Agent of a notice
substantially in the form of Exhibit A hereto, confirmation from the Securities
Intermediary that Treasury Securities. have been credited to the Collateral
Account and receipt of payment for any fees or expenses incurred in connection
with the Collateral Substitution, the Collateral Agent shall instruct the
Securities Intermediary by a notice, substantially in the form of Exhibit B
hereto, to release such Pledged Debt Securities from the Pledge by Transfer the
Purchase Contract Agent for distribution to such Holder thereof, free and clear
of any lien, pledge or security interest created hereby.
(b) Upon credit to the Collateral Account of Treasury Securities or
security entitlements thereto delivered by a Holder of Corporate Units and
receipt of the related instruction from the Collateral Agent, the Securities
Intermediary shall release the Debt Securities specified in such instruction and
shall promptly Transfer the same to the Purchase Contract Agent for distribution
to such Holder, free and clear of any lien, pledge or security interest created
hereby.
A Holder may elect not to participate in the Remarketing by creating
Treasury Units as specified in this Section and Section 5.3(e) of the Purchase
Contract Agreement at any time until 5:00 p.m. (New York City time) on the
Election Date.
11
(c) Notwithstanding any provision herein to the contrary, the
release and Transfer of the Pledged Debt Securities in connection with the
Collateral Substitution pursuant to this Section 5.2 shall be evidenced by an
endorsement by the Collateral Agent on the Pledged Debt Security held by the
Collateral Agent reflecting a reduction in the principal amount of such Pledged
Debt Security equal in amount to the principal amount of such Separated Debt
Security. The Collateral Agent shall confirm any such reduced principal amount
by telecopying or otherwise delivering a photocopy of such endorsement made on
the Pledged Debt Security evidencing such reduced principal amount to the
Trustee. Upon receipt of such confirmation, the Trustee shall instruct the
Custodian (as defined in the Indenture Officers' Certificate) to increase the
principal amount of the Debt Securities issued in global form held by the
Custodian in an amount equal to the reduced principal amount by an endorsement
made the Custodian on such global Debt Security to reflect such increase.
Section 5.3 Recreation of Corporate Units.
(a) A Holder of a Treasury Unit may recreate a Corporate Unit at
any time until 5:00 p.m. (New York City time) on the Election Date by:
(1) providing notice to the Purchase Contract Agent; substantially
in the form of Exhibit C of the Purchase Contract Agreement, of such
Holder's intention to create Corporate Units;
(2) for each Treasury Unit such Holder wishes to substitute,
transferring 20 Debt Securities to the Securities Intermediary which shall
then (y) deposit such Debt Securities in the Collateral Account under this
Agreement and instruct the Collateral Agent to hold such Debt Securities
as Collateral and (z) instruct the Collateral Agent to release to such
Holder one (1) Treasury Security formerly subject to the Pledge;
(3) transferring the related Treasury Units to the Purchase
Contract Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit D of the Purchase Contract Agreement,
(i) stating that the Holder has transferred the relevant amount of Debt
Securities to the Securities Intermediary and (ii) requesting that the
Purchase Contract Agent instruct the Collateral Agent to release the
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 C hereto; and
(4) paying to the Collateral Agent any fees or expenses incurred in
connection with the recreation of Corporate Units;
provided that, Holders of Treasury Units may recreate Corporate Units in
integral multiples of 20 Treasury Units for 20 Corporate Units. Under no
circumstance may a Holder of Treasury Units recreate Corporate Units after 5:00
p.m. (New York City time) on the Election Date.
Upon receipt from the Purchase Contract Agent of a notice
substantially in the form of Exhibit C hereto, confirmation that Debt Securities
or security entitlements thereto have been credited to the Collateral Account as
described in such notice and receipt of payment for, any fees or expenses
incurred in connection with the recreation of Corporate Units, the Collateral
12
Agent shall instruct the Securities Intermediary by a notice, substantially in
the form provided in Exhibit D hereto, to release such Pledged Treasury
Securities from the Pledge by Transfer to the Holder thereof.
(b) Upon credit to the Collateral Account of Debt Securities or
security entitlements thereto and receipt of the related instruction from the
Collateral Agent, the Securities Intermediary shall release the applicable
Treasury Securities specified in such instruction and shall promptly Transfer
the same to such Holder, free and clear of any lien, pledge or security interest
created hereby.
(c) Notwithstanding any provision herein to the contrary, the
Transfer of the Debt Securities in connection with the recreation of Corporate
Units pursuant to this Section 5.3 shall be evidenced by an endorsement by the
Collateral Agent on the Pledged Debt Security held by the Collateral Agent
reflecting an increase in the principal amount of such Pledged Debt Security
equal in amount to the principal amount of such Debt Security. The Collateral
Agent shall confirm any such increased principal amount by telecopying or
otherwise delivering a photocopy of such endorsement made on the Pledged Debt
Security evidencing such increased principal amount to the Trustee. Upon receipt
of such confirmation, the Trustee shall instruct the Custodian (as defined in
the Indenture Officers' Certificate) to decrease the principal amount of Debt
Securities issued in global form held by the Custodian in an amount equal to the
increased principal amount by an endorsement made by the Custodian on such
global Debt Security to reflect such decrease.
Section 5.4 Termination Event.
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that a Termination Event has occurred,
the Collateral Agent shall release all Collateral from the Pledge and shall
promptly Transfer any Pledged Debt Securities or security entitlement with
respect thereto, any Pledged Treasury Portfolio Interest or security entitlement
with respect thereto and any Pledged Treasury Securities or security entitlement
with respect thereto to the Purchase Contract Agent for the benefit of the
Holders, for distribution to such Holders in accordance with their respective
interests, free and clear of any lien, pledge or security interest or other
interest created hereby.
(b) If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code, and if the Collateral Agent shall
for any reason fail promptly to effectuate the release and Transfer of all
Pledged Debt Securities, the Pledged Treasury Portfolio Interest or the Pledged
Treasury Securities or security entitlements with respect thereto, as the case
may be, as provided by this Section 5.4, the Purchase Contract Agent shall:
(1) request an opinion letter of a nationally recognized law firm
reasonably acceptable to the Collateral Agent to the effect that, as a
result of the Company's being the debtor in such a bankruptcy case, the
Collateral Agent will not be prohibited from releasing or Transferring the
Collateral as provided in this Section 5.4, and shall deliver such opinion
to the Collateral Agent within ten days after the occurrence of such
Termination Event, and if (A) the Purchase Contract Agent shall be unable
to obtain such opinion within ten days after the occurrence of such
Termination Event or (B) the Collateral Agent shall continue, after
13
delivery of such opinion, to refuse to effectuate the release and Transfer
of all Pledged Debt Securities, all Pledged Treasury Portfolio Interest,
all Pledged Treasury Securities or the Proceeds of any of the foregoing,
as the case may be, as provided in this Section 5.4, then the Purchase
Contract Agent shall within thirty days after the occurrence of such
Termination Event commence an action or proceeding in the court having
jurisdiction of the Company's case under the Bankruptcy Code seeking an
order requiring the Collateral Agent to effectuate the release and
transfer of all Pledged Debt Securities, all Pledged Treasury Portfolio
Interest or all the Pledged Treasury Securities or security entitlements
with respect thereto, as the case may be, as provided by this Section 5.4;
or
(2) commence an action or proceeding like that described in Section
5.4(b)(1)(B) hereof within ten days after the occurrence of such
Termination Event.
The Purchase Contract Agent shall be deemed to have complied with Section
5.4(b)(1), and shall not be required to commence any action or proceeding
referred to therein, if it shall have either obtained such an opinion letter or
requested such an opinion from three such nationally recognized law firms
reasonably acceptable to the Collateral Agent..
Section 5.5 Cash Settlement.
(a) Unless a Holder has effected an Early Settlement or a Merger
Early Settlement or a Successful Remarketing has occurred, in the case of
Corporate Units, and unless a Termination Event has occurred prior to dates
required for notice to elect the Cash Settlement right specified in the Purchase
Contract Agreement and the Collateral Agent has received written notice from the
Company, the Purchase Contract Agent or, in the case of a Termination Event,
from the holders of at least 10% of the outstanding Units of such Early
Settlement, Merger Early Settlement, Successful Remarketing or Termination
Event, as the case may be, upon receipt by the Collateral Agent of (1) a notice
from the Purchase Contract Agent (including a copy of such notice received from
the Holder substantially in the form of Exhibit F to the Purchase Contract
Agreement) promptly after the receipt by the Purchase Contract Agent of a notice
from a Holder of a Corporate Units or a Treasury Units that it has elected, in
accordance with the procedures specified in Section 5.8(a)(i) or (b)(i) of the
Purchase Contract Agreement, respectively, to effect a Cash Settlement and (2)
payment by such Holder by deposit in the Collateral Account on or prior to 11:00
am. (New York City time), on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date in the case of Corporate Units, and the
Business Day immediately preceding the Purchase Contract Settlement Date in the
case of the Treasury Units, of the Purchase Price in lawful money of the United
States by certified or cashiers' check or wire transfer, in each case of
immediately available fiends payable to or upon the order of the Securities
Intermediary, then the Collateral Agent shall upon receipt of written directions
from the Company:
(1) instruct the Securities Intermediary promptly to invest any such
Cash in Permitted Investments;
14
(2) release from the Pledge (i) in the case of a Holder of Corporate
Units, the related Pledged Debt Securities, or (ii) in the case of a
Holder of Treasury Units, the related Pledged Treasury Securities, with a
principal amount or principal amount at maturity, as the case may be,
equal to the product of (x) the Stated Amount times (y) the number of
Purchase Contracts as to which such Holder has elected to effect a Cash
Settlement; and
(3) instruct the Securities Intermediary to Transfer all such
Pledged Debt Securities -or Pledged Treasury Securities, as the case may
be, to the Purchase Contract Agent for the benefit of such Holders, in
each case free and clear of the Pledge created hereby, for distribution to
such Holder.
The Company shall instruct the Securities Intermediary as to the
type of Permitted Investments in which any such Cash shall be invested;
provided, however, that if the Company fails to deliver such instructions by
10:00 a.m. (New York City time), the Securities Intermediary shall invest such
Cash in the Permitted Investments described in clause 6 of the definition of
Permitted Investments and identified by the Company in the Account Direction.
Upon receipt of the proceeds upon the maturity of the Permitted Investments on
the Purchase Contract Settlement Date, the Collateral Agent shall (A) instruct
the Securities Intermediary to pay the portion of such proceeds and deliver any
certified or cashier's checks received, in an aggregate amount equal to the
Purchase Price, to the Company on the Purchase Contract Settlement Date, and (B)
instruct the Securities Intermediary to release any amounts in respect of the
interest earned from such Permitted Investments to the Purchase Contract Agent
for distribution to such Holder.
(b) If a Holder of a Corporate Units notifies the Purchase Contract
Agent as provided in Section 5.8(a)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by Section 5.8(a)(ii) of the Purchase Contract Agreement, such Holder
shall be deemed to have consented to (A) to the disposition of the Pledged Debt
Securities on the third Business Day prior to the Purchase Contract Settlement
Date in connection with the Final Remarketing in accordance with Section 5.3 of
the Purchase Contract Agreement or, (B) if a Failed Remarketing occurs, the
Collateral Agent, for the benefit of the Company, and upon written direction of
the Company as provided in this Agreement, exercising all of its rights as a
secured party with respect to any Pledged Debt Securities under this Agreement
and, subject to applicable law, by either (i) retaining such Debt Securities in
full satisfaction of such Holder's obligations under the related Purchase
Contracts or (ii) selling such Debt Securities in one or more public or private
sales.
(c) If a Holder of a Treasury Units notifies the Purchase Contract
Agent as provided in Section 5.8(b)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by Section 5.8(b)(ii) of the Purchase Contract Agreement, such Holder
shall be deemed to have elected to pay the Purchase Price in accordance with
Section 5.8(b) hereof.
(d) Prior to 3:00 p.m. (New York City time), on the fourth Business
Day immediately preceding the Purchase Contract Settlement Date, the Securities
Intermediary shall deliver' to the Purchase Contract Agent a notice,
substantially in the form of Exhibit E hereto, stating the amount of cash that
15
it has received with respect to the Cash Settlement of Corporate Units.
(e) Prior to 3:00 p.m. (New York City time), on the Business Day
immediately preceding the Purchase Contract Settlement Date, the Securities
Intermediary shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit E hereto, stating the amount of cash that
it has received with respect to the Cash Settlement of Treasury Units.
Section 5.6 Early Settlement: Merger Early Settlement.
Unless a Termination Event has occurred and the Collateral Agent has
received from the Company or the Purchase Contract Agent or holders of at least
10% of the outstanding Units written notice of such Termination Event, upon
receipt by the Collateral Agent of a notice from the Purchase Contract Agent
that a Holder of Units has elected to effect Early Settlement or Merger Early
Settlement of its obligations under the Purchase Contracts forming a part of
such Units in accordance with the terms of the Purchase Contracts and the
Purchase Contract Agreement (which notice shall set forth the number of such
Purchase Contracts as to which such Holder has elected to erect Early Settlement
or Merger Early Settlement), and that the Purchase Contract Agent has received
from such Holder, and paid to the Company as confirmed in writing by the
Company, the related Early Settlement Amounts or Merger Early Settlement
Amounts, as applicable, pursuant to the terms of the Purchase Contract Agreement
and all conditions to such Early Settlement or Merger Early Settlement, as
applicable, have been satisfied, then the Collateral Agent shall release from
the Pledge, (1) Pledged Debt Securities, or Pledged Treasury Portfolio Interest,
as the case may be, in the case of a Holder of Corporate Units, or (2) Pledged
Treasury Securities, in the case of a Holder of Treasury Units, with a Value
equal to the product of (i) the Stated Amount times (ii) the number of Purchase
Contracts as to which such Holder has elected to effect Early Settlement or
Merger Early Settlement, as applicable, and shall instruct the Securities
Intermediary to Transfer all such Pledged Debt Securities, Pledged Treasury
Portfolio Interest or Pledged Treasury Securities, as the case may be, to the
Purchase Contract Agent for the benefit of such Holder, in each case free and
clear of the Pledge created hereby, for distribution to such Holder.
Notwithstanding anything to the contrary contained herein, Holders
may not effect Early Settlement after 5:00 p.m. (New York City time) on the
Election Date and Holders may effect Merger Early Settlement of Units only in
integral multiples of 20 Corporate Units or 20 Treasury Units.
Section 5.7 Optional Remarketing.
Pursuant to the indenture and the Remarketing Agreement, on or prior
to 5:00 p.m. (New York City time) on the Election Date, registered holders of
Separated Debt Securities may elect to have their Separated Debt Securities
remarketed by Transferring their Separated Debt Securities, together with a
notice of such election, substantially in the form of Exhibit F hereto and
Exhibit B to the Indenture Officers' Certificate, to the Collateral Agent and
the Trustee, respectively, whereupon, the Collateral Agent shall hold such
Separated Debt Securities in an account separate from the Collateral Account and
cause such Separated Debt Securities to be included in any Remarketing pursuant
16
to the Indenture and the Remarketing Procedures. Once such holder of such
Separated Debt Securities delivers such notice and Separated Debt Securities as
specified in the preceding sentence, such election may not be withdrawn and may
not be conditioned upon the level at which the Reset Rate is established in the
Remarketing; provided, however, that if such a holder delivers only such a
notice but not the Separated Debt Securities subject to the notice, then none of
such holders' Separated Debt Securities shall be included in the Remarketing.
If a Failed Remarketing occurs, the Remarketing Agent shall notify
by telephone the Company, the Depositary, the Purchase Contract Agent, the
Collateral Agent and the Trustee that a Failed Remarketing has occurred and
shall Transfer to the Collateral Agent, by the third Business Day following the
Failed Remarketing, such Separated Debt Securities, whereupon the Collateral
Agent shall promptly Transfer such Separated Debt Securities to the holders
entitled thereto.
Section 5.8 Application of Proceeds in Settlement: Remarketing.
(a) Unless a Termination Event has occurred or a Holder has effected
an Early Settlement or a Merger Early Settlement, Early Settlement or Merger
Early Settlement and the Collateral Agent has received written notice of such
Termination Event, Early Settlement, or Merger Early settlement from the Company
or the Purchase Contract Agent or, in the case of a Termination, Holders of at
least 10% of the Outstanding Units, (i) the Purchase Contract Agent shall
provide notice, substantially in the form of Exhibit G to the Purchase Contract
Agreement by 11:00 a.m. (New York City time), on the Business Day immediately
preceding the Initial Remarketing Date, to the Remarketing Agent, the Collateral
Agent, the Trustee and the Company of the aggregate principal amount of Pledged
Debt Securities comprising part of Corporate Units to be remarketed, other than
those Pledged Debt Securities of Holders that have elected not to participate in
the Remarketing pursuant to paragraph 19(i)(B) of the Indenture Officers'
Certificate and Section 5.3(e) of the Purchase Contract Agreement (of which the
Purchase Contract Agent has delivered written notice thereof to the Collateral
Agent, substantially in the form of Exhibit G hereto), and (ii) the Collateral
Agent shall notify, by 11:00 a.m. (New York City time), on the Business Day
immediately preceding the Initial Remarketing Date, the Remarketing Agent, the
Trustee and the Company of the aggregate principal amount of Separated Debt
Securities of holders of Separated Debt Securities that have elected to
participate in the Remarketing (the Debt Securities described in clauses (i) and
(ii) collectively being referred to . as the "Remarketing Debt Securities") and,
concurrently therewith, the Collateral Agent shall, without any further
instruction from any holder of the Remarketing Debt Securities, present all
Remarketing Debt Securities to the Remarketing Agent for Remarketing.
If there has been a successful Initial Remarketing (a "Successful
Initial Remarketing") or a successful Subsequent Remarketing (a "Successful
Subsequent Remarketing"), the Remarketing Agent will on the Remarketing Date of
such Remarketing (i) deduct and retain for itself as a remarketing fee an amount
not exceeding 25 basis points (0.25%) of the principal amount of each remarketed
Remarketing Debt Security (the "Remarketing Fee"), (ii) use the remaining
Proceeds with respect to the Pledged Debt Securities from such Successful
Remarketing to purchase the Treasury Portfolio and, on or prior to the third
Business Day following the Remarketing Date (such date of settlement of the
Remarketing, the "Remarketing Settlement Date"), and deliver such Treasury
17
Portfolio to the Collateral Agent, along with notification thereof, which shall
thereupon, for the benefit of the Company, apply such Treasury Portfolio, to
secure the obligation of all Holders of Corporate Units to purchase Common Stock
under the Purchase Contracts constituting a part of such Corporate Units, in
substitution for the Pledged Debt Securities, (iii) if any Separated Debt
Securities were remarketed, remit to the Collateral Agent, along with
notification thereof, for payment to the holders of such Separated Debt
Securities sold in the Remarketing the remaining proceeds from such Successful
Remarketing equal to the amounts described in clauses (1)(ii) and (2)(ii) of the
definition of Remarketing Value and (iv) if there then remains any proceeds from
such Successful Remarketing, after the application of such proceeds as set forth
in clauses (i) through (iii) above, then remit, along with notification thereof,
any such remaining proceeds attributable to the remarketed Pledged Debt
Securities to the Purchase Contract Agent for the benefit of the holders of such
Pledged Debt Securities and to the Collateral Agent for benefit of the holders
of any remarketed Separate Debt Securities, on a pro rata basis, provided,
however, that if such Successful Remarketing is consummated after 4:30 p.m. (New
York City time) on such Remarketing Date and, despite using its commercially
reasonable efforts, the Remarketing Agent cannot cause the applications of the
proceeds specified above to occur on such Remarketing Date, then the Remarketing
Agent may make such applications and remittances on the next succeeding Business
Day. Holders of the Remarketing Debt Securities that are so remarketed will not
otherwise be responsible for the payment of any remarketing fee or expenses in
connection with the Remarketing. Following the delivery of the Treasury
Portfolio to the Collateral Agent as set forth above in this paragraph, the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Treasury Portfolio as it had in respect of the Pledged Debt
Securities, as provided herein.
In the event that any portion of the Pledged Treasury Portfolio
Interest matures before the Purchase Contract Settlement Date, the Collateral
Agent shall invest the Cash Proceeds therefrom in Permitted Investments in
clause 6 of the definition of Permitted Investments, and identified by the
Company in the Account Direction, unless the Company shall otherwise instruct
the Securities Intermediary and the Collateral Agent as to the type of Permitted
Investments in which any such Cash Proceeds shall be invested. The Collateral
Agent shall cause the Securities Intermediary to remit, on the Purchase Contract
Settlement Date, a portion of the Cash Proceeds of the maturing Pledged Treasury
Portfolio Interest and of the investment earnings from the related investment in
Permitted Investments, in an aggregate amount equal to the Treasury Portfolio
Return to the Purchase Contract Agent for the benefit of the Holders of the
related Corporate Units when received. Without receiving any instruction from
any such Holder of Corporate Units, the Collateral Agent shall apply, on the
Purchase Contract Settlement Date, the Cash Proceeds of the maturing Pledged
Treasury Portfolio Interest and of the investment earnings from the related
investment in Permitted Investments, in an aggregate amount equal to the
aggregate Purchase Price applicable to such Corporate Units to satisfy in full
such Holder's obligations to pay the Purchase Price to purchase the shares of
Common Stock under the related Purchase Contracts on the Purchase Contract
Settlement Date. In the event the sum of the Proceeds from the related Pledged
Treasury Portfolio Interest and the investment earnings from the related
investment in Permitted Investments exceeds the sum of the related Treasury
Portfolio Return and the aggregate Purchase Price of the Purchase Contracts
being settled thereby, the Collateral Agent shall instruct the Securities
Intermediary to distribute such excess, when received, to the Purchase Contract
18
Agent for distribution to the Holders whose Purchase Contracts were settled with
such Proceeds, on a pro rata basis.
If, by 4:00 p.m. (New York City time), on the ninth Business Day
preceding the Purchase Contract Settlement Date, the Remarketing Agent, despite
using its commercially reasonable efforts, has been and is unable to remarket
all of the Remarketing Debt Securities tendered for purchase at a price equal to
at least the Remarketing Value, the Remarketing Agent shall Transfer to the
Collateral Agent, along with notification thereof, by the sixth Business Day
preceding the Purchase Contract Settlement Date, the Pledged Debt Securities
that were to be remarketed in the Initial or Subsequent Remarketing, whereupon
the Collateral Agent shall, for the benefit of the Company, apply such Pledged
Debt Securities, to secure the obligation of the related Holders of Corporate
Units to purchase Common Stock under the related Purchase Contracts.
(b) Unless a Termination Event has occurred or a Holder has effected
a Cash Settlement, an Early Settlement or a Merger Early Settlement, or a
Successful Initial Remarketing or a Successful Subsequent Remarketing has
occurred, such Holder shall be deemed to have consented to the Remarketing of
its Pledged Debt Securities in the Final Remarketing on the Final Remarketing
Date, in a Remarketing in accordance with Section 5.3(c) of the Purchase
Contract Agreement. Upon notice of such event from the Purchase Contract Agent,
the Collateral Agent shall, by 11:00 a.m. (New York City time), on the Business
Day immediately preceding the Final Remarketing Date, without any instruction
from such Holders of Corporate Units, Transfer the Remarketing Debt Securities
to the Remarketing Agent for Remarketing. Upon receiving such Remarketing Debt
Securities, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement, will use its commercially reasonable efforts to remarket such
Remarketing Debt Securities on the Final Remarketing Date.
If the Final Remarketing is successful (a "Successful Final
Remarketing"), the Remarketing Agent will on the Remarketing Date (i) deduct and
retain for itself the Remarketing Fee pursuant to the Remarketing Agreement,
(ii) cause the remaining Proceeds of the Remarketing with respect to the Pledged
Debt Securities in an amount equal to the aggregate principal amount of such
Debt Securities to be delivered to the Purchase Contract Agent, on the
Remarketing Settlement Date, (iii), if any Separated Debt Securities were
remarketed, remit to the Collateral Agent, along with notification thereof, for
payment to the holders of such Separated Debt Securities sold in the Remarketing
the remaining proceeds from such Successful Remarketing attributable to the
Separated Debt Securities in an amount equal to the principal amount of such
Debt Securities and (iv) if there then remains any proceeds from such Successful
Remarketing, after the application of such proceeds as set forth in clauses (i)
through (iii) above, remit, along with notification thereof, any excess Proceeds
of the Remarketing to the Purchase Contract Agent for the benefit of the Holders
of Corporate Units whose Pledged Debt Securities were remarketed and to the
Collateral Agent for the benefit of the holders of any remarketed Separated Debt
Securities, on a pro rata basis. Holders of the Remarketing Debt Securities that
are so remarketed will not otherwise be responsible for the payment of any
remarketing fee or expenses in connection with the Remarketing. The Purchase
Contract Agent shall give written directions to the Collateral Agent, and the
Collateral Agent shall instruct the Securities Intermediary, to apply a portion
of the Proceeds with respect to the Pledged Debt Securities from such
Remarketing, on the Purchase Contract Settlement Date, equal to the aggregate
principal amount of such Pledged Debt Securities to satisfy in full the
19
obligations of such Holders of Corporate Units to pay the Purchase Price to
purchase the shares of Common Stock under the related Purchase Contracts.
If a Failed Remarketing occurs, the Collateral Agent, having
received notice of such Failed Remarketing from the Remarketing Agent pursuant
to the Remarketing Agreement, shall, on the written direction of the Company,
exercise for the benefit of the Company, its rights as a secured creditor with
respect to the Pledged Debt Securities related to this Corporate Units
Certificate and, subject to applicable law, may (i) retain such Pledged Debt
Securities in full satisfaction of the Holders' obligations under the Purchase
Contracts or (ii) sell such Pledged Debt Securities in one or more public or
private sales, the proceeds, if any, of such sale to constitute full
satisfaction of the Holders' obligations under the Purchase Contracts.
(c) Unless a Termination Event has occurred or a Holder has effected
a Cash Settlement, an Early Settlement or a Merger Early Settlement, if a
Successful. Initial Remarketing or a Successful Subsequent Remarketing has
occurred, a 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
Pledged Treasury Portfolio, in the case of Holders of Corporate Units, and the
related Pledged Treasury Securities, in the case of Holders of Treasury Units.
(d) In the event that all or any portion of the Pledged Treasury
Securities matures before the Purchase Contract Settlement Date, the Collateral
Agent shall invest the Cash Proceeds therefrom in Permitted Investments in
clause 6 of the definition of Permitted Investments and identified by the
Company in the Account Direction, unless the Company shall otherwise instruct
the Securities Intermediary and the Collateral Agent as to the type of Permitted
Investments in which any such Cash Proceeds shall be invested.
(e) Without receiving any instruction from any such Holder of
Treasury Units, the Collateral Agent shall apply, on the Purchase Contract
Settlement Date, the Cash Proceeds of the maturing Pledged Treasury Securities
and of the investment earnings from the related investment in Permitted
Investments, in each case, in an amount equal to the aggregate Purchase Price
applicable to such Treasury Units to satisfy in full such Holder's obligations
to pay the Purchase Price to purchase the shares of Common Stock under the
related Purchase Contracts on the Purchase Contract Settlement Date. In the
event the sum ofthe Proceeds from the related Pledged Treasury Securities and
the investment earnings from the related investment in Permitted Investments
exceeds the aggregate Purchase Price of the Purchase Contracts being settled
thereby, the Collateral Agent shall instruct the Securities Intermediary to
distribute such excess, when received, to the Purchase Contract Agent for
distribution to the Holders whose Purchase Contracts were settled with such
Proceeds, on a pro rata basis.
(f) Notwithstanding the Pledge and, if applicable, the delivery of
Separated Debt Securities to the Collateral Agent for Remarketing, in each case,
as set forth herein, the Company's obligation to pay interest, including any
accrued and unpaid, on all outstanding Debt Securities (whether then comprising
a part of Corporate Units or as Separated Debt Securities) pursuant to the
Indenture shall remain.
20
Section 6. Voting Rights.
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 in accordance with the terms of the
Purchase Contract Agreement. The Purchase Contract Agent shall give the Company
and the Collateral Agent at least five calendar 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 the Debt Securities are entitled to vote or solicitation of
consents, waivers or proxies of holders of the Debt Securities, the Collateral
Agent shall use its 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.
Section 7. Rights and Remedies.
Section 7.1 Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies specified in Section 5.5
hereof or otherwise available at law or in equity, after an event of default (as
specified in Section 7.1 (b) below) hereunder, the Collateral Agent shall have
all of the rights and remedies with respect to the Collateral of a secured party
under the UCC (whether or not the UCC is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Without limiting the generality of the foregoing, such remedies may
include, to the extent permitted by applicable law, (i) retention of the Pledged
Debt Securities, Pledged Treasury Portfolio Interest or Pledged Treasury
Securities in full satisfaction of the Holders' obligations under the Purchase
Contracts or (ii) sale of the Pledged Debt Securities, Pledged Treasury
Portfolio Interest or Pledged Treasury Securities in one or more public or
private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of principal payments of any Pledged
Treasury Securities or on account of any Pledged Treasury Portfolio Interest as
provided in Section 3 hereof, in satisfaction of the Obligations of the Holder
of the Units of which such Pledged Treasury Securities or Pledged Treasury
Portfolio Interest are a part under the related Purchase Contracts, the
inability to make such payments shall constitute an event of default hereunder
and the Collateral Agent shall have and may exercise, with reference to such
Pledged Treasury Securities or Pledged Treasury Portfolio Interest, as
applicable, any and all of the rights and remedies available to a secured party
under the UCC and the TRADES Regulations after default by a debtor, and as
otherwise granted herein or under any other law.
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(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of
the Pledged Debt Securities, (ii) the principal amount of the Pledged Treasury
Securities and (iii) the principal amount of the Pledged Treasury Portfolio
Interest, subject, in each case, to the provisions of Section 3 hereof, and as
otherwise granted herein.
(d) Subject to Section 9.1, the Purchase Contract Agent and each
Holder of Units agrees that, from time to time, upon the written request of the
Collateral Agent, the Purchase Contract Agent or such Holder shall execute and
deliver such further documents and do such other acts and things as the
Collateral Agent may reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the Collateral
Agent hereunder. The Purchase Contract Agent shall have no liability to any
Holder for executing any documents or taking any such acts requested by the
Collateral Agent hereunder, except for liability for its own grossly negligent
acts, its own grossly negligent failure to act or its own willful misconduct.
Section 7.2 Substitutions.
Whenever a Holder has the right to substitute Treasury Securities,
Debt Securities or security entitlements to either of them for financial assets
held in the Collateral Account, such substitution shall not constitute a
novation of the security interest created hereby.
Section 8. Representations and Warranties: Covenants.
Section 8.1 Representations and Warranties.
Each Holder from time to time, acting through the Purchase Contract
Agent as attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any representation or warranty made by or on behalf of a
Holder), hereby represents and warrants to the Collateral Agent (with respect to
its interest in the Collateral), which representations and warranties shall be
deemed repeated on each day a Holder Transfers Collateral that:
(1) such Holder has the power to grant a security interest in and
lien on the Collateral;
(2) such Holder is the sole beneficial owner of the Collateral and,
in the case of Collateral delivered in physical form, is the sole holder
of such Collateral and is the sole beneficial owner of, or has the right
to Transfer, the Collateral it Transfers to the Securities Intermediary
for credit to the Collateral Account, free and clear of any security
interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under
Section 2 hereof,
(3) upon the Transfer of the Collateral to the Securities
Intermediary for credit to the Collateral Account, the Collateral Agent,
for the benefit of the Company, will have a valid and perfected first
priority security interest therein (assuming that any central clearing
operation or any Securities Intermediary or other entity not within the
control of the Holder involved in the Transfer of the Collateral,
including the Collateral Agent and the Securities Intermediary, gives the
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notices and takes the action required of it hereunder and under applicable
law for perfection of that interest and assuming the establishment and
exercise of control pursuant to Section 4 hereof); and
(4) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security
interest, lien or other encumbrance on the Collateral other than the
security interest and lien granted under Section 2 hereof or violate any
provision of any existing law or regulation applicable to it or of any
mortgage, charge, pledge, indenture, contract or undertaking to which it
is a party or which is binding on it or any of its assets.
Section 8.2. Covenants.
The Purchase Contract Agent and the Holders from time to time,
acting through the Purchase Contract Agent as their attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any covenant
made by or on behalf of a Holder), hereby covenant to the Collateral Agent that
for so long as the Collateral remains subject to the Pledge:
(1) neither the Purchase Contract Agent nor such Holders will create
or purport to create or allow to subsist any mortgage, charge, lien,
pledge or any other security interest whatsoever over the Collateral or
any part of it other than pursuant to this Agreement; and
(2) neither the Purchase Contract Agent nor such Holders will sell
or otherwise dispose (or attempt to dispose) of the Collateral or any part
of it except for the beneficial interest therein, subject to the Pledge
hereunder, transferred in connection with the Transfer of the Units.
Section 9. The Collateral Agent and the Securities Intermediary.
It is hereby agreed as follows:
Section 9.1 Appointment, Powers and Immunities.
The Collateral Agent and the Securities Intermediary shall each act
solely as agent for the Company hereunder and not in its individual capacity
with such powers as are specifically vested in the Collateral Agent or the
Securities Intermediary, as the case may be, by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. The
Collateral Agent and the Securities Intermediary shall:
(1) have no duties or responsibilities except those expressly set
forth in this Agreement and no implied covenants or obligations shall be
inferred from this Agreement against the Collateral Agent or the
Securities Intermediary, nor shall the Collateral Agent or the Securities
Intermediary be bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof;
(2) not be responsible for, and neither the Collateral Agent nor the
Securities Intermediary makes any representation or warranty with respect
to, any recitals contained in this Agreement, or in any certificate or
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other document referred to or provided for in, or received by it under,
this Agreement, the Units or the Purchase Contract Agreement, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement (other than as against the Collateral Agent or the
Securities Intermediary, as the case may be), the Units or the Purchase
Contract Agreement or any other document referred to or provided for
herein or therein or for any failure by the Company or any other Person
(except the Collateral Agent or the Securities Intermediary, as the case
may be) to perform any of its obligations hereunder or thereunder or for
the due creation, perfection, priority or, except, in the case of the
Collateral Agent, as expressly required hereby, maintenance of any
security interest created hereunder;
(3) not be required to initiate or conduct any litigation or
collection proceedings hereunder (except, in the case of the Collateral
Agent, pursuant to directions furnished under Section 9.2 hereof, subject
to Section 9.6 hereof);
(4) not be responsible for any action taken or omitted to be taken
by it hereunder or under any other document or instrument referred to or
provided for herein or in connection herewith or therewith, except for its
own gross negligence or willful misconduct; and
(5) not be required to advise any party as to selling or retaining,
or taking or refraining from taking any action with respect to, any
securities or other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. Notwithstanding the foregoing, each
of the Collateral Agent and the Securities Intermediary in its individual
capacity hereby waives any right of setoff, bankers' lien, liens or perfection
rights as Securities Intermediary or any counterclaim with respect to any of the
Collateral.
Section 9.2 Instructions of the Company.
The Company shall have the right, by one or more instruments in
writing executed and delivered to the Collateral Agent, to direct the time,
method and place of conducting any proceeding for the realization of any right
or remedy available to the Collateral Agent, or of exercising any power
conferred on the Collateral Agent, or to direct the taking or refraining from
taking of any action authorized by this Agreement; provided, however, that (i)
such direction shall not conflict with the provisions of any law or of this
Agreement and (ii) the Collateral Agent shall be adequately indemnified as
provided herein. Nothing contained in this Section 9.2 shall impair the right of
the Collateral Agent in its discretion to take any action or omit to take any
action which it deems proper and which is not inconsistent with such direction.
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In the event the Collateral Agent or the Securities Intermediary is
uncertain as to the application of any provision in this Agreement or any other
agreement relating to the transactions contemplated hereby, or such provision is
ambiguous as to its application or is, or appears to be, in conflict with any
other applicable provision hereof, or in the event this Agreement permits any
determination by the Collateral Agent or the Securities Intermediary or is
silent or incomplete as to the course of action the Collateral Agent or the
Securities Intermediary is required to take with respect to a particular set of
facts, the Collateral Agent or the Securities Intermediary may seek instructions
from the Company and shall not be liable to any Person to the extent that it
acts in good faith in accordance with the instructions of the Company; provided,
that, if the Collateral Agent or the Securities Intermediary shall not have
received instructions from the Company pursuant to its request within twenty
(20) days after the date of such request, until instructed otherwise by the
Company, the Collateral Agent or the Securities Intermediary may, but shall be
under no duty to, take or refrain from taking such action as it shall deem
advisable in the best interests of the Company.
Section 9.3 Reliance by Collateral Agent and Securities Intermediary.
Each of the Securities Intermediary and the Collateral Agent shall
be entitled to rely upon, and shall not incur any liability to anyone in acting
upon, any certification, order, judgment, opinion, notice, instructions 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 or matter
stated therein) and upon advice and statements of legal counsel and other
experts selected by the Collateral Agent or the Securities Intermediary, as the
case may be. As to any matters riot expressly provided for by this Agreement,
the Collateral Agent and the Securities Intermediary shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with Section 9.2 of this
Agreement.
Section 9.4 Rights in Other Capacities.
The Collateral Agent and the Securities Intermediary and their
affiliates may. (without having to account therefor to the Company) accept
deposits from, lend money to, make their investments in and generally engage in
any kind of banking, trust or other business with the Purchase Contract Agent or
the Securities Intermediary, as the case may be, any other Person interested
herein and any Holder of Units (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent or the Securities
Intermediary, as the case may be, and the Collateral Agent, the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent and any Holder of Units without having to account
for the same to the Company; provided that each of the Securities Intermediary
and the Collateral Agent covenants and agrees with the Company that it shall not
accept, receive or permit there to be created in favor of itself and shall take
no affirmative action to permit there to be created in favor of any other
Person, any security interest, lien or other encumbrance of any kind in or upon
the Collateral other than the lien created by the Pledge.
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Section 9.5 Non-Reliance on Collateral Agent and Securities
Intermediary.
Neither the Securities Intermediary nor the Collateral Agent shall
be required to keep itself informed as to the performance or observance by the
Purchase Contract Agent or any Holder of Units of this Agreement, the Purchase
Contract Agreement, the Units 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 Units. Neither the Collateral Agent nor the Securities
Intermediary shall have any duty or responsibility to provide the Company with
any credit or other information concerning the affairs, financial condition or
business of the Purchase Contract Agent `or any Holder of Units (or any of their
respective affiliates) that may come into the possession of the Collateral Agent
or the Securities Intermediary or any of their respective affiliates.
Section 9.6 Compensation and Indemnity.
The Company agrees to:
(1) pay the Collateral Agent and the Securities Intermediary from
time to time such compensation as shall be agreed in writing between the
Company and the Collateral Agent or the Securities Intermediary, as the
case may be, for all services rendered by. them hereunder-, and
(2) indemnify the Collateral Agent and the Securities Intermediary
for, and to hold each of them harmless from and against, any loss,
liability or reasonable out-of-pocket expense incurred without gross
negligence, willful misconduct or bad faith on its part, arising out of or
in connection with the acceptance or administration of its powers and
duties under this Agreement, including the reasonable costs and expenses
(including reasonable fees and expenses of counsel) of defending itself
against any claim or liability in connection with the exercise or
performance of such powers and duties.
Section 9.7 Failure to Act.
Subject to Section 9.2 of this Agreement, in the event of any
dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent and the Securities Intermediary shall be entitled, after prompt
notice to the Company and the Purchase Contract Agent, at its sole option, to
refuse to comply with any and all claims, demands or instructions with respect
to such property or funds so long as such dispute or conflict shall continue,
and the Collateral Agent and the Securities Intermediary shall not be or become
liable in any way to any of the parties hereto for its failure or refusal to
comply with such conflicting claims, demands or instructions. The Collateral
Agent and the Securities Intermediary shall be entitled to refuse to act until
either:
(1) such conflicting or adverse claims or demands shall have been
finally determined by a court of competent jurisdiction or settled by
agreement between the conflicting parties as evidenced in a writing
satisfactory to the Collateral Agent or the Securities Intermediary; or
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(2) the Collateral Agent or the Securities Intermediary shall have
received security or an indemnity satisfactory to it sufficient to save it
harmless from and against any and all loss, liability or reasonable
out-of-pocket expense which it may incur by reason of its acting.
The Collateral Agent and the Securities Intermediary may in addition elect to
commence an interpleader action or seek other judicial relief or orders as the
Collateral Agent or the Securities Intermediary may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor the Securities Intermediary shall be required to take any
action that is in its opinion contrary to law or to the terms of this Agreement,
or which would in its opinion subject it or any of its officers, employees or
directors to liability.
Section 9.8 Resignation of Collateral Agent and Securities Intermediary.
(a) Subject to the appointment and acceptance of a successor
Collateral Agent as provided below:
(1) the Collateral Agent may resign at any time by giving notice
thereof to the Company, the Purchase Contract Agent as attorney-in-fact
for the Holders of Units and the Trustee;
(2) the Collateral Agent may be removed at anytime by the Company;
and
(3) if the Collateral Agent fails to perform any of its material
obligations hereunder in any material respect for a period of not less
than 20 days after receiving written notice of such failure by the
Purchase Contract Agent and such failure shall be continuing, the
Collateral Agent may be removed by the Purchase Contract Agent; provided,
however, that neither this provision nor any other provision of this
Agreement or the Purchase Contract Agreement shall require the Purchase
Contract Agent to keep itself informed as to or to monitor the performance
or observance by the Collateral Agent or the Securities Intermediary of
their obligations hereunder.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Collateral Agent pursuant to clause (3) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall have the right
to appoint a successor Collateral Agent. If no successor Collateral Agent shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's giving of notice of resignation or such
removal, then the retiring Collateral Agent may petition any court of competent
jurisdiction for the appointment of a successor Collateral Agent. The Collateral
Agent shall be a bank which has an office in __________ with a combined capital
and surplus of at least $50,000,000 and shall not be the Purchase Contract Agent
or any of its affiliates. Upon the acceptance of any appointment as Collateral
Agent hereunder by a successor Collateral Agent, such successor Collateral Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent, and the retiring
Collateral Agent shall take all appropriate action to transfer any money and
property held by it hereunder (including the Collateral) to such successor
Collateral Agent. The retiring Collateral Agent shall, upon such succession, be
discharged from its duties and obligations as Collateral Agent hereunder. After
27
any retiring Collateral Agent's resignation hereunder as Collateral Agent, the
provisions of this Section 9 shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as the
Collateral Agent. Any resignation or removal of the Collateral Agent hereunder
shall be deemed for all purposes of this Agreement as the simultaneous
resignation or removal, as the case maybe, of the Securities Intermediary.
(b) Subject to the appointment and acceptance of a successor
Securities Intermediary as provided below:
(1) the Securities Intermediary may resign at any time by giving
notice thereof to the Company, the Purchase Contract Agent as
attorney-in-fact for the Holders of Units and the Trustee;
(2) the Securities Intermediary maybe removed at anytime by the
Company; and
(3) if the Securities Intermediary fails to perform any of its
material obligations hereunder in any material respect for a period of not
less than 20 days after receiving written notice of such failure by the
Purchase Contract Agent and such failure shall be continuing, the
Securities Intermediary may be removed by the Purchase Contract Agent.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Securities Intermediary pursuant to clause (3) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall have the right
to appoint a successor Securities Intermediary. If no successor Securities
Intermediary shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Securities Intermediary's giving
of notice of resignation or such removal, then the retiring Securities
Intermediary may petition any court of competent jurisdiction for the
appointment of a successor Securities Intermediary. The Securities Intermediary
shall be a bank which has an office in __________ with a combined capital and
surplus of at least $50,000,000 and shall not be the Purchase Contract Agent or
any of its affiliates. Upon the acceptance of any appointment as Securities
Intermediary hereunder by a successor Securities Intermediary, such successor
Securities Intermediary shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Securities
Intermediary, and the retiring Securities Intermediary shall take all
appropriate action to transfer any money and property held by it hereunder
(including the. Collateral) to such successor Securities Intermediary. The
retiring Securities Intermediary shall, upon such succession, be discharged from
its duties and obligations as Securities Intermediary hereunder. After any
retiring Securities Intermediary's resignation hereunder as Securities
Intermediary, the provisions of this Section 9 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Securities Intermediary.
Section 9.9 Right to Appoint Agent or Advisor.
The Collateral Agent shall have the right to appoint agents or
advisors in connection with any of its duties hereunder, and the Collateral
Agent shall not be liable for any action taken or omitted by, or in reliance
upon the advice of, such agents or advisors selected in good faith. The
28
appointment of agents pursuant to this Section 9.9 shall be subject to prior
consent of the Company, which consent shall not be unreasonably withheld.
Section 9.10 Survival.
The provisions of this Section 9 shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent or the
Securities Intermediary.
Section 9.11 Exculpation.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Collateral Agent or the Securities
Intermediary or their officers, directors, employees or agents be liable under
this Agreement to any third party for indirect, special, punitive or
consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent or the Securities Intermediary, or any of them, incurred without any act
or deed that is found to be attributable to gross negligence or willful
misconduct on the part of the Collateral Agent or the Securities Intermediary.
Any and all exculpatory provisions, immunities and indemnities in favor of the
Collateral Agent or the Securities Intermediary under this Agreement shall inure
to the benefit of the Collateral Agent or the Securities Intermediary, as
applicable, in its individual capacity or as a party to any agreement referred
to herein or therein, whether or not expressly so provided.
Section 10. Amendment.
Section 10.1 Amendment Without Consent of Holders.
Without the consent of any Holders, the Company (when authorized by
a Board Resolution), the Collateral Agent, the Securities Intermediary and the
Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent, the
Securities Intermediary and the Purchase Contract Agent, to:
(1) evidence the succession of another Person to the Company, and
the assumption to by any such successor of the covenants of the Company;
(2) evidence and provide for the acceptance of appointment hereunder
by a successor Collateral. Agent, Securities Intermediary or Purchase
Contract Agent;
(3) add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company, provided such covenants or such surrender do not adversely affect
the validity, perfection or priority of the Pledge created hereunder; or
(4) cure any ambiguity (or formal defect), to corrector 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.
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Section 10.2 Amendment with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of said Holders delivered to
the Company, the Purchase Contract Agent, the Securities Intermediary and the
Collateral Agent, the Company, when duly authorized by a Board Resolution, the
Purchase Contract Agent, the Securities Intermediary and the Collateral Agent
may amend this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the rights of the Holders in respect of the
Units; provided, however, that no such supplemental agreement shall, without the
unanimous consent of the Holders of each Outstanding Units adversely affected
thereby, other than as expressly contemplated by the Agreement,
(1) change the amount or type of Collateral underlying a Units,
impair the right of the Holder of any Units to receive distributions on
the underlying Collateral or otherwise adversely affect the Holder's
rights in or to such Collateral;
(2) otherwise effect any action that would require the consent of
the Holder of each Outstanding Units affected thereby pursuant to the
Purchase Contract Agreement if such action were effected by an agreement
supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment;
provided that if any amendment or proposal referred to above would adversely
affect only the Corporate Units or only the Treasury Units after Units of such
class are created and remain Outstanding, then only the affected class of Holder
as of the record date for the Holders entitled to vote thereon will be entitled
to vote on such amendment or proposal, and such amendment or proposal shall not
be effective except with the consent of Holders of not less than a majority of
such class; provided, further, that the unanimous consent of the Holders of each
outstanding Purchase Contract of such class affected thereby shall be required
to approve any amendment or proposal specified in clauses (1) through (3) above.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 10.3 Execution of Amendments.
In executing any amendment permitted by this Section, the Collateral
Agent, the Securities Intermediary and the Purchase Contract Agent shall be
entitled to receive and (subject to Section ?.1 of the Purchase Contract
Agreement with respect to the Purchase Contract Agent) shall be fully protected
in relying upon, an Opinion of Counsel (as defined in the Purchase Contract
Agreement) 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.
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Section 10.4 Effect of Amendments.
Upon the execution of any amendment under this Section, this
Agreement shall be modified in accordance therewith, and such amendment shall
form a part of this Agreement for all purposes; and every Holder of Certificates
theretofore or thereafter authenticated, executed on behalf of the Holders and
delivered under the Purchase Contract Agreement shall be bound thereby.
Section 10.5 Reference to Amendments.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any amendment pursuant to this Section may, and
shall if required by the Collateral Agent or the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent and the Collateral
Agent as to any matter provided for in such amendment. If the Company shall so
determine, new Security Certificates so modified as to conform, in the opinion
of the Collateral Agent, the Purchase Contract Agent and the Company, to any
such amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement in exchange for Outstanding
Units Certificates.
Section 11. Merger, Consolidation, Sale or Conveyance.
Section 11.1 When Company May Merge, Etc.
The Company shall not consolidate with or merge into, or sell, lease
(for a term extending beyond the last stated maturity of the Units and the Debt
Securities then Outstanding) or convey all or substantially all of its. assets
to, any Person or group of Affiliated Persons in one transaction or a series of
related transactions, unless the Company shall be the continuing corporation, or
the successor or transferee Person expressly assumes by one or more supplemental
agreements, in form satisfactory to the Collateral Agent, all the obligations of
the Company with respect to this Agreement, and the Company or the successor or
transferee Person, as the case may be, (i) shall be a Corporation organized and
existing under the laws of one of the states in the United States and (ii) shall
not, immediately after such consolidation or merger or sale, lease or
conveyance, be in default in the performance or any covenant or condition
hereunder. The Company shall deliver to the Collateral Agent an Officers'
Certificate (as defined in the Original Indenture) and an Opinion of Counsel (as
defined in the Original Indenture), each stating that such consolidation, merger
sale, lease or conveyance and such supplemental agreement comply with this
Agreement and that all conditions precedent to the consummation of any such
consolidation, or merger, or any sale,, lease or conveyance have been met.
Section 11.2 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, lease or conveyance
of all or substantially all of the assets of the Company in accordance with
Section 11.1, the successor corporation or the transferee corporation formed by
such consolidation or into which the Company is merged or to which such transfer
is made shall succeed to, and be substituted for, and may exercise every right
31
and power of, the Company under this Agreement with the same effect as if such
successor corporation had been named as the Company herein.
Such successor or transferee Person thereupon may cause to be
signed, and may issue either in its own name or in the name of DQE, Inc., any or
all of the Certificates evidencing Units issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Purchase Contract
Agent; and, upon the order of such successor or such transferee Person, instead
of the Company, and subject to all the terms, conditions and limitations in this
Agreement prescribed, the Purchase Contract Agent shall authenticate and execute
on behalf of the Holders and deliver any Certificates which previously shall
have been signed and delivered by the officers of the Company to the Purchase
Contract Agent for authentication and execution, and any Certificate evidencing
Units which such successor corporation or transferee corporation thereafter
shall cause to be signed and delivered to the Purchase Contract Agent for that
purpose. All the Certificates issued shall in all respects have the same legal
rank and benefit under this Agreement as the Certificates theretofore or
thereafter issued in accordance with the terms of this Agreement as though all
of such Certificates had been issued at the date of the execution hereof.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing Units
thereafter to be issued as may be appropriate.
Section 11.3 Limitation.
Nothing in this Agreement shall be deemed to prevent or restrict;
(a) any consolidation or merger after the consummation of which the Company
would be the surviving or resulting entity or any conveyance or other transfer
or lease of any part of the properties of the Company which does not constitute
the entirety, or substantially the entirety, thereof; or (b) the approval by the
Company of, or the consent by the Company to, any consolidation or merger to
which any Restricted Subsidiary (as defined in the Original Indenture) or any
other subsidiary or affiliate of the Company may be a party or any conveyance,
transfer or lease by any Subsidiary (as defined in the Original Indenture) or
any such other subsidiary or affiliate of any of its assets.
Section 12. Miscellaneous.
Section 12.1 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 12.2 Governing Law; Jurisdiction and Venue.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
32
The Company, the Collateral Agent, the Securities Intermediary, the
Purchase Contract Agent and the Holders from time to time of the Units, acting
through the Purchase Contract Agent as their attorney-in-fact, hereby submit to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent, the Securities Intermediary and the Holders from time to time
of the Units, 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 12.3 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 specified
below. 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.
If to the Company:
DQE, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (__) ___-____
Attention: __________
If to the Collateral Agent or the Securities Intermediary:.
________________________
________________________
________________________
Telecopier No.: (___) ____-____
Attention: __________
If to the Purchase Contract Agent or the Trustee:
Bank One Trust Company, NA
________________________
________________________
Telecopier No.: (___) ____-____
Attention: __________
33
Section 12.4 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Securities Intermediary and the Purchase Contract Agent, and the Holders from
time to time of the Units, by their acceptance of the same, shall be deemed to
have agreed to be bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the Purchase Contract
Agent.
Section 12.5 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 12.6 Effect of Headings and Table of Contents.
The headings and table of contents contained in this Agreement shall
not constitute a part, or to effect the meaning or interpretation of, this
Agreement.
Section 12.7 Severability.
If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
Section 12.8 Expenses. etc.
The Company agrees to reimburse the Collateral Agent and the
Securities Intermediary for:
(1) all reasonable costs and expenses of the Collateral Agent and
the Securities Intermediary (including, without limitation, the reasonable
fees and expenses of counsel to the Collateral Agent and the Securities
Intermediary), in connection with (i) the negotiation, preparation,
execution and delivery or performance of this Agreement and (ii) any
modification, supplement or waiver of any of the terms of this Agreement;
(2) all reasonable costs and expenses of the Collateral Agent and
the Securities Intermediary (including, without limitation, reasonable
fees and expenses of counsel) in connection with (i) any enforcement or
proceedings resulting or incurred in connection with causing any Holder of
Units to satisfy its obligations under the Purchase Contracts forming a
part of the Units and (ii) the enforcement of this Section 12.,8; and
(3) 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
34
costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
Section 12.9 Security Interest Absolute.
All rights of the Collateral Agent and security interests hereunder,
and all obligations of the Holders from time to time hereunder, shall be
absolute and unconditional irrespective of
(1) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Units or any other agreement or instrument
relating thereto;
(2) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the
obligations of Holders of the Units under the related Purchase Contracts,
or any other amendment or waiver of any term of, or any consent to any
departure from any requirement of, the Purchase Contract Agreement or any
Purchase Contract or any other agreement or instrument relating thereto;
or
(3) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
35
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and. year first above written.
DQE, INC.
By:______________________________________
Name:
Title:
BANK ONE TRUST COMPANY, NA, not
individually but solely as Purchase
Contract Agent and as attorney-in-fact of
the Holders from time to time of the
Units
By:______________________________________
Name:
Title
___________________, as Collateral
Agent
By:______________________________________
Name:
Title
____________________, as Securities
Intermediary
By:______________________________________
Name:
Title:
EXHIBIT A
NOTICE
FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
(Creation of Treasury Units)
___________________, as Collateral Agent
____________________
____________________
____________________
Attention:
Fax:
Re: Units of DQE, Inc.
Reference is made to the Pledge Agreement dated as of __________, 200_
(the "Pledge Agreement"), among DQE, Inc. (the "Company"), you, as Collateral
Agent and as Securities Intermediary, and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Units from time to time.
Capitalized terms used herein but not defined shall have the meanings
attributable to them in the Pledge Agreement.
We hereby notify you that, in accordance with Section 5.2 of the Pledge
Agreement and Section 3.13 of the Purchase Contract Agreement, the holder of
securities named below (the "Holder") has elected to substitute $______ Value of
Treasury Securities (CUSIP No. ) in exchange for an equal Value of Pledged Debt
Securities and has delivered to the undersigned Purchase Contract Agent a notice
stating that the Holder has Transferred such Treasury Securities to the
Securities Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities have been credited to the Collateral
Account, to release by Transfer to the undersigned Purchase Contract Agent, on
behalf of the undersigned Holder an equal Value of Pledged Debt Securities in
accordance with Section 5.2 of the Pledge Agreement.
Bank One Trust Compay, NA,
as Purchase Contract Agent
By:______________________________________
Name:
Title:
Date:
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements thereto for the Pledged Debt Securities:
_________________________________________________
Name of Holder
_________________________________________________
TRADES Account No.
_________________________________________________
Social Security or Taxpayer Identification Number
_________________________________________________
Address
EXHIBIT B
NOTICE
FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY
(Creation of Treasury Units)
___________________, as Collateral Agent
____________________
____________________
____________________
Attention:
Fax:
Re: Units of DQE, Inc.
Securities Account No. __________ entitled "___________"
(the "Collateral Account")
Reference is made to the Pledge Agreement, dated as of __________, 200_
(the "Pledge Agreement"), among DQE, Inc. (the "Company"), you, as Securities
Intermediary, _______________, as Purchase Contract Agent and as
attorney-in-fact for the holders of Units from time to time, and the
undersigned, as Collateral Agent. Capitalized terms used herein but not defined
shall have the meanings attributable to them in the Pledge Agreement.
When you have confirmed that $____________ Value of Treasury Securities
(CUSIP No. ) has been credited to the Collateral Account by or for the benefit
of _________, as Holder of Units (the "Holder"), you are hereby instructed to
release from the Collateral Account an equal Value of Debt Securities by
Transfer to the Purchase Contract Agent in accordance with Section 5.2 of the
Pledge Agreement.
____________________, as Collateral
Agent
By:______________________________________
Name:
Title:
Date:
Please print name and address of Holder:
_________________________________________________
Name of Holder
_________________________________________________
TRADES Account No.
_________________________________________________
Social Security or Taxpayer Identification Number
_________________________________________________
Address
EXHIBIT C
NOTICE
FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
(Recreation of Corporate Units)
___________________, as Collateral Agent
____________________
____________________
____________________
Attention:
Fax:
Re: Units of DQE, Inc.
Reference is made to the Pledge Agreement, dated as of __________, 200_
(the "Pledge Agreement"), among DQE, Inc. (the "Company"), you, as Collateral
Agent and as Securities Intermediary, and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Units from time to time.
Capitalized terms used herein but not defined shall have the meanings
attributable to them in the Pledge Agreement.
We hereby notify you that, in accordance with Section 5.3 of the Pledge
Agreement and Section 3.14 of the Purchase Contract Agreement, the holder of
securities listed below (the "Holder") has elected to substitute $____________
Value of Debt Securities in exchange for $___________ Value of Pledged Treasury
Securities and has delivered to the undersigned a notice stating that the Holder
has Transferred such Debt Securities or security entitlements thereto to the
Securities Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Debt Securities have been credited to the Collateral
Account, to release to the undersigned Holder an equal Value of Treasury
Securities or security entitlements thereto related to _______ Treasury Units of
such Holder in accordance with Section 5.3 of the Pledge Agreement and Section
3.14 of the Purchase Contract Agreement.
Bank One Trust Company, NA,
as Purchase Contract Agent
By:______________________________________
Name:
Title:
Date:
Please print name and address of Holder electing to substitute Pledged Debt
Securities or security entitlements thereto for Pledged Treasury Securities:
_________________________________________________
Name of Holder
_________________________________________________
DTC Participant No
_________________________________________________
Social Security or Taxpayer Identification Number
_________________________________________________
Address
EXHIBIT D
NOTICE
FROM COLLATERAL, AGENT TO SECURITIES INTERMEDIARY
(Recreation of Corporate Units)
___________________, as Collateral Agent
____________________
____________________
____________________
Attention:
Fax:
Re: Units of DQE, Inc.
Securities Account No.__________ entitled _________________"
Reference is made to the Pledge Agreement, dated as of ___________, 200_
(the "Pledge Agreement"), among DQE, Inc. (the "Company"), you, as Securities
Intermediary, Bank One Trust Company, NA, as Purchase Contract Agent and as
attorney-in-fact for the holders of Units from time to time, and the
undersigned, as Collateral Agent. Capitalized terms used herein but not defined
shall have the meanings attributable to them in the Pledge Agreement.
When you have confirmed that $_________ Value of Debt Securities has been
credited to the Collateral Account by or for the benefit of __________, as
Holder of Units (the "Holder"), you are hereby instructed to release from the
Collateral, Account $____________Value of Treasury Securities (CUSIP No. ) or
security entitlements thereto by Transfer to the undersigned Holder in
accordance with Section 5.3 of the Pledge Agreement.
____________________,
as Collateral Agent
By:______________________________________
Name:
Title:
Date:
Please print name and address of Holder:
_________________________________________________
Name of Holder
_________________________________________________
DTC Participant No.
_________________________________________________
Social Security or Taxpayer Identification Number
_________________________________________________
Address
EXHIBIT E
NOTICE OF CASH SETTLEMENT
FROM SECURITIES INTERMEDIARY TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
___________________, as Collateral Agent
____________________
____________________
____________________
Attention:
Fax:
Re: Units of DQE, Inc.
Reference is made to the Pledge Agreement, dated as of __________, 200_
(the "Pledge Agreement'), among DQE, Inc. (the "Company"), you, as Purchase
Contract Agent and as attorney-in-fact for the holders of Units from time to
time, as Collateral Agent and the undersigned, as Securities Intermediary.
Capitalized terms used herein but not defined shall have the meanings
attributable to them in the Pledge Agreement.
In accordance with Section [5.5(d)] [5.5(e)] of the Pledge Agreement, we
hereby notify you that as of 11:00 a.m. (New York City time), [on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date] [on
the Business Day immediately preceding the Purchase Contract Settlement Date],
we have received [$_________ in immediately available funds paid in an aggregate
amount equal to the Purchase Price to the Company on the Purchase Contract
Settlement Date with respect to ________ Corporate Units] [$__________ in
immediately available funds paid in an aggregate amount equal to the Purchase
Price to the Company on the Purchase Contract Settlement Date with respect to
___________ Treasury Units.]
____________________________,
as Securities Intermediary
By:________________________________
Name:
Title:
Date:
EXHIBIT F
NOTICE FROM HOLDER OF SEPARATED SENIOR NOTES TO
COLLATERAL AGENT REGARDING REMARKETING
___________________, as Collateral Agent
____________________
____________________
____________________
Attention:
Fax:
Re: Debt Securities of DQE, Inc.
Reference is made to the Pledge Agreement, dated as of __________, 200_
(the "Pledge Agreement"), among DQE, Inc. (the "Company"), you, Collateral
Agent, and as Securities Intermediary, and Bank One Trust Company, NA, as
Purchase Contract Agent and as attorney-in-fact for the holders of Units from
time to time. Capitalized terms used herein but not defined shall have the
meanings attributable to them in the Pledge Agreement.
The undersigned hereby notifies you in accordance with Section 5.7 of the
Pledge Agreement, that the undersigned elects to have $___________ principal
amount of Debt Securities for delivery to the Remarketing Agent on the Business
Day immediately preceding the Initial Remarketing Date for such Debt Securities
to be included in any Remarketing. The undersigned will, upon request of the
Remarketing Agent, promptly 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 which are the
subject of this notice.
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 below under "Payment
Instructions." The undersigned hereby instructs you, in the event of a
unsuccessful Remarketing, upon receipt of the Debt Securities tendered herewith
from the Remarketing Agent, to deliver the Debt Securities to the person(s) and
at the address(es) indicated below under "Delivery Instructions" The undersigned
acknowledges and agrees that the Collateral Agent and the Remarketing Agent may
withhold from the Proceeds such amounts as they may determine to be appropriate
in respect of taxes which may be applicable.
With this notice, the undersigned hereby (i) represents and wan-ants that
the undersigned has full power and authority to tender, sell, assign and
transfer the Notes tendered hereby and that the undersigned is the record owner
of any Notes tendered herewith in physical form or a participant in The
Depository Trust Company ("DTC") and the beneficial owner of any Notes tendered
herewith by book-entry transfer to your account at DTC and (ii) agrees to be
bound. by the terms and conditions of the Pledge Agreement.
Date:
By:_________________________________
Name:
Title:
Signature Guarantee:
Please print name and address of Holder:
_________________________________________________
Name
_________________________________________________
Social Security or Taxpayer Identification Number
_________________________________________________
Address
HOLDER'S INSTRUCTIONS
A. PAYMENT INSTRUCTIONS B. DELIVERY INSTRUCTIONS
Proceeds of the remarketing should In the event of a failed remarketing,
be paid by check in the name of the Debt Securities which are in physical
person(s) set forth below and form should be delivered to the
mailed to the address set forth person(s) set forth below and
below mailed to the address set forth below.
Name(s) Name(s)
___________________________ _____________________________
(Please Print) (Please Print)
Address Address
___________________________ ______________________________
(Please Print) (Please Print)
___________________________ ______________________________
___________________________ ______________________________
(Zip Code) (Zip Code)
___________________________ ______________________________
(Tax Identification or Social Number) Tax Identification or Social
If a DTC Participant, add wire In the event of a Failed
transfer instructions and DTC Remarketing, Debt Securities
Account No. which are in book-entry form
should be credited to the
account at The Depository Trust
Company set forth below.
__________________________ ________________________________
Wire transfer instructions DTC Account Number
__________________________
DTC Account Number Name of Account Party:_________
EXHIBIT G
NOTICE FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
___________________, as Collateral Agent
____________________
____________________
____________________
Attention:
Fax:
Re: Debt Securities of DQE, Inc.
Reference is made to the Pledge Agreement, dated as of __________, 200_
(the "Pledge Agreement"), among DQE, Inc. (the "Company"), you, as Collateral
Agent and Securities Intermediary, and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Units from time to time.
Capitalized terms used herein but not defined shall have the meanings
attributable to them in the Pledge Agreement.
The undersigned hereby notifies you, in accordance with paragraph 19(i)(B)
of the Indenture Officers' Certificate and Section 5.8 of the Pledge Agreement,
that the undersigned has received notice from the Holder named below (the
"Holder") that the Holder has elected not to participate in the Remarketing
through compliance with the procedures for creating Treasury Units set forth in
Section 3.13 of the Purchase Contract Agreement and Section 5.2 of the Pledge
Agreement.
Accordingly, the undersigned hereby notifies you in accordance with
Section 3.13 of the Purchase Contract Agreement and Section 5.2 of the Pledge
Agreement that the Holder has elected to substitute $______________ Value of
Treasury Securities in exchange for an equal Value of Pledged Debt Securities
and has delivered to the undersigned a notice stating that the Holder has
Transferred such Treasury Securities to the Securities Intermediary, for credit
to the Collateral Account.
The undersigned hereby requests that you as the Collateral Agent, upon
confirmation from the Securities Intermediary that such Treasury Securities have
been credited to the Collateral Account, release to us for delivery to such
Holder ___________ principal amount of the Pledged Debt Security in accordance
with Section. 5.2 of the Pledge Agreement.
Bank One Trust Company, NA,
as Purchase Contract Agent
By:______________________________________
Name:
Title:
Date:
EXHIBIT H
AGENCY AND CUSTODY ACCOUNT DIRECTION
FOR CASH BALANCES
Direction to use __________ for Cash Balances for the following account(s):
Account Names: ___________________
Account Number(s): __________
You are hereby directed to invest, as indicate below or as I shall, direct
further from time to time; all cash in the Account in the following money market
portfolio of __________ (the "Fund") (Check One):
[ ] ___________________________
[ ] ___________________________
[ ] ___________________________
[ ] ___________________________
I acknowledge that I have received, at my request, and reviewed the Fund's
prospectus and have determined that the Fund is an appropriate investment for
the Account.
I understand from reading the Fund's prospectus that ___________________,
("______________") serves as investment advisor, custodian and transfer agent
for the Fund; I also understand that _______________ will be paid, and its bank
affiliates may be paid, fees for services to the Fund and that those fees may
include Processing Organization fees as described in the Fund's prospectus.
I understand that you will not exclude amounts invested in the Fund from Account
assets subject to fees under the Account agreement between us.
I understand that investments in the Fund are not obligations of, or endorsed or
guaranteed by, ______________ or its affiliates and are not insured by the
Federal Deposit Insurance Corporation.
I acknowledge that I have full power to direct investments of the Account.
I understand that I may change this direction at anytime and that it shall
continue in effect until revoked or modified by me by written notice to you.
________________________________________
Signature
________________________________________
Date