Exhibit 4.10
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PLEDGE AGREEMENT
among
KANSAS CITY SOUTHERN INDUSTRIES, INC.,
THE CHASE MANHATTAN BANK
as Collateral Agent, Custodial Agent
and Securities Intermediary
and
THE BANK OF NEW YORK
as Purchase Contract Agent
Dated as of ____________, 2001
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Definitions
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
SECTION 2.01. The Pledge
SECTION 2.02. Control and Perfections
ARTICLE III
DISTRIBUTIONS ON PLEDGED COLLATERAL
Distributions on Pledged Collateral
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES
SECTION 4.01. Substitution for Notes and the
Creation of Treasury Units
SECTION 4.02. Substitution of Treasury Securities and
the Recreation of Corporate Units
SECTION 4.03. Termination Event
SECTION 4.04. Cash Settlement
SECTION 4.05 Early Settlement; Merger Early Settlement
SECTION 4.06. Application of Proceeds; Settlement
ARTICLE V
VOTING RIGHTS--NOTES
Voting Rights--Notes
ARTICLE VI
RIGHTS AND REMEDIES; TAX EVENT REDEMPTION
SECTION 6.01. Rights and Remedies of the Collateral
Agent
SECTION 6.02. Tax Event Redemption
SECTION 6.03. Initial Remarketing
SECTION 6.04. Substitutions
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.01. Representations and Warranties
SECTION 7.02. Covenants
ARTICLE VIII
THE COLLATERAL AGENT
SECTION 8.01. Appointment, Powers and Immunities
SECTION 8.02. Instructions of the Company
SECTION 8.03. Reliance
SECTION 8.04. Rights in Other Capacities
SECTION 8.05. Non-Reliance
SECTION 8.06. Compensation and Indemnity
SECTION 8.07. Failure to Act
SECTION 8.08. Resignation
SECTION 8.09. Right to Appoint Agent or Advisor
SECTION 8.10 Survival
SECTION 8.11 Exculpation
ARTICLE IX
AMENDMENT
SECTION 9.01. Amendment Without Consent of Holders
SECTION 9.02. Amendment With Consent of Holders
SECTION 9.03. Execution of Amendments
SECTION 9.04. Effect of Amendments
SECTION 9.05. Reference to Amendments
ARTICLE X
MISCELLANEOUS
SECTION 10.01. No Waiver
SECTION 10.02. Governing Law
SECTION 10.03. Notices
SECTION 10.04. Successors and Assigns
SECTION 10.05 Counterparts
SECTION 10.06 Severability
SECTION 10.07 Expenses, etc.
SECTION 10.08 Security Interest Absolute
PLEDGE AGREEMENT, dated as of , 2001 (this
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"AGREEMENT"), among KANSAS CITY SOUTHERN INDUSTRIES, INC., a Delaware
corporation (the "COMPANY"), THE CHASE MANHATTAN BANK, a New York
banking corporation, not individually but solely as collateral agent
(in such capacity, together with its successors in such capacity, the
"COLLATERAL AGENT"), as custodial agent (in such capacity, together
with its successors in such capacity, the "CUSTODIAL AGENT") and as
"securities intermediary" as defined in Section 8-102(a)(14) of the
Code (as defined herein) (in such capacity, together with its
successors in such capacity, the "SECURITIES INTERMEDIARY"), and THE
BANK OF NEW YORK, not individually but solely as purchase contract
agent and as attorney-in-fact of the Holders (as defined in the
Purchase Contract Agreement) from time to time of the Securities (as
hereinafter defined) (in such capacity, together with its successors
in such capacity, the "PURCHASE CONTRACT AGENT") under the Purchase
Contract Agreement (as hereinafter defined).
RECITALS
WHEREAS the Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "PURCHASE CONTRACT
AGREEMENT"), pursuant to which there may be issued 4,600,000 Mandatory
Convertible Units of the Company (or 5,290,000 Mandatory Convertible Units if
the Underwriters' overallotment option is exercised in full), having a stated
amount of $25 (the "STATED AMOUNT") per Mandatory Convertible Unit;
WHEREAS the Mandatory Convertible Units will initially consist of 4,600,000
(or 5,290,000 if the underwriters' overallotment option is exercised in full)
units referred to as "CORPORATE UNITS" with a stated amount, per Corporate Unit,
equal to the Stated Amount. Each Corporate Unit will initially consist of (a) a
stock purchase contract (the "PURCHASE CONTRACT") under which the holder will
purchase from the Company not later than August 17, 2004 (the "PURCHASE CONTRACT
SETTLEMENT DATE"), for an amount of cash equal to the Stated Amount, a number of
newly issued shares of common stock, $0.01 par value per share (the "COMMON
STOCK"), of the Company equal to the Settlement Rate (as defined below) and (b)
either beneficial ownership of a Note (as defined below) or, following a
Successful Initial Remarketing or a Tax Event Redemption, the Applicable
Ownership Interest of the Treasury Portfolio;
WHEREAS if Holders of Corporate Units substitute collateral as contemplated
by Section 4.01, each unit created thereby (collectively referred to as
"TREASURY UNITS" and, together with the Corporate Units, the "SECURITIES") will
initially consist of (a) a Purchase Contract under which the Holder will
purchase from the Company on the Purchase Contract Settlement Date, for an
amount in cash equal to the Stated Amount, a number of newly issued shares of
Common Stock of the Company, equal to the Settlement Rate, and (b) a 1/40, or
2.5%, undivided beneficial interest in a zero-coupon U.S. Treasury Security
(CUSIP No. ▇▇▇▇▇▇▇▇▇ having a principal amount at maturity equal to $1,000 and
maturing on or prior to August 16, 2004 (the "TREASURY SECURITIES");
WHEREAS, pursuant to the terms of the Indenture (as defined below) The
Kansas City Southern Railway Company ("KCSR") a wholly owned subsidiary of the
Company, will issue $115,000,000 aggregate principal amount of [ ]% Senior Notes
due 2007 (or $132,250,000 if the Underwriters' overallotment option is
exercised) (the "NOTES"), each having a principal amount per Note equal to $25;
WHEREAS, pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Notes, any
Applicable Ownership Interest in the Treasury Portfolio and the Treasury
Securities to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof; and
WHEREAS, upon such pledge, the Pledged Notes or the Applicable Ownership
Interests in the Treasury Portfolio, as the case may be, and the Pledged
Treasury Securities will be beneficially owned by the Holders but will be owned
of record by the Purchase Contract Agent subject to the Pledge hereunder.
NOW THEREFORE, in consideration of the foregoing premises, the Company, the
Collateral Agent, the Securities Intermediary, the Custodial Agent and the
Purchase Contract Agent, on its own behalf and as attorney-in-fact of the
Holders from time to time of the Securities, agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
(b) the words "HEREIN", "HEREOF" and "HEREUNDER" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision;
(c) initially capitalized terms used but not otherwise defined herein have
the meanings assigned to such terms in the Purchase Contract Agreement; and
(d) the following terms have the meanings assigned to them in this Article:
"AGREEMENT" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"BANKRUPTCY CODE" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or any other
day on which banking institutions in The City of New York (in the State of New
York) are permitted or required by any applicable law to close.
"CASH" means any coin or currency of the United States as at the time shall
be legal tender for payment of public and private debts.
"CODE" has the meaning specified in Section 6.01 hereof.
"COLLATERAL" has the meaning specified in Section 2.01 hereof.
"COLLATERAL ACCOUNT" means the securities account [number] maintained at [
] in the name "[ ], as Purchase Contract Agent on behalf of the holders of
certain securities of Kansas City Southern Industries, Inc., Collateral Account
subject to the security interest of The Chase Manhattan Bank, as Collateral
Agent, for the benefit of Kansas City Southern Industries, Inc., as pledgee and
any successor account.
"COLLATERAL AGENT" has the meaning specified in the first paragraph of this
instrument.
"COMMON STOCK" has the meaning specified in the Recitals.
"COMPANY" means the Person named as the "COMPANY" in the first paragraph of
this instrument until a successor shall have become such, and thereafter
"COMPANY" shall mean such successor.
"CUSTODIAL AGENT" has the meaning specified in the first paragraph of this
instrument.
"KCSR" has the meaning specified in the Recitals.
"NOTE TRUSTEE" means The Bank of New York, as trustee under the Indenture
until a successor is appointed thereunder, and thereafter means such successor
trustee.
"NOTES" has the meaning specified in the Recitals.
"INTERMEDIARY" means any entity that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"PERMITTED INVESTMENTS" means any one of the following which shall mature
not later than the next succeeding Business Day (a) any evidence of indebtedness
with an original maturity of 365 days or less issued, or directly and fully
guaranteed or insured, by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof or such indebtedness constitutes
a general obligation of it); (b) deposits, certificates of deposit or
acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US $200.0 million at the time of
deposit; (c) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (b); (d) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which commercial paper has a
rating at the time of purchase at least equal to "A-1" by Standard & Poor's
Ratings Services ("S&P") or at least equal to "P-1" by ▇▇▇▇▇'▇ Investors
Service, Inc. ("MOODY'S"); and (v) investments in money market funds registered
under the Investment Company Act of 1940, as amended, rated in the highest
applicable rating category by S&P or Moody's.
"PERSON" and "person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PLEDGE" has the meaning specified in Section 2.01 hereof.
"PLEDGED NOTES" has the meaning specified in Section 2.01 hereof.
"PLEDGED TREASURY SECURITIES" has the meaning specified in Section 2.01
hereof.
"PRIMARY TREASURY DEALER" means a primary U.S. government securities dealer
in The City of New York.
"PROCEEDS" means all interest, dividends, cash, instruments, securities,
financial assets (as defined in Section 8-102(a)(9) of the Code) and other
property from time to time received, receivable or otherwise distributed upon
the sale, exchange, maturity, collection or disposition of the Collateral or any
proceeds thereof.
"PURCHASE CONTRACT" has the meaning specified in the Recitals.
"PURCHASE CONTRACT AGENT" has the meaning specified in the first paragraph
of this Agreement.
"PURCHASE CONTRACT AGREEMENT" has the meaning specified in the Recitals.
"PURCHASE CONTRACT SETTLEMENT DATE" has the meaning specified in the
Recitals.
"SECURITIES" has the meaning specified in the Recitals.
"SECURITIES INTERMEDIARY" has the meaning specified in the first paragraph
of this Agreement.
"SECURITY ENTITLEMENT" has the meaning set forth in Section 8-102 (a)(17)
of the Code.
"SEPARATE NOTES" means any Notes that are not Pledged Notes.
"STATED AMOUNT" has the meaning specified in the Recitals.
"SUPPLEMENTAL REMARKETING AGREEMENT" means the Supplemental Remarketing
Agreement, as defined in the Remarketing Agreement.
"TAX EVENT REDEMPTION DATE" means the date upon which a Tax Event
Redemption is to occur.
"TRADES" means the Treasury/Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.
"TRADES REGULATIONS" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations are
used herein as therein defined.
"TRANSFER" means, except as otherwise expressly provided herein, with
respect to the Collateral and in accordance with the instructions of the
Collateral Agent, the Purchase Contract Agent or the Holder, as applicable:
(a) in the case of Collateral consisting of securities which cannot be
delivered by book-entry or which the parties agree are to be delivered in
physical form, delivery in appropriate physical form to the recipient
accompanied by any duly executed instruments of transfer, assignments in
blank, transfer tax stamps and any other documents necessary to constitute
a legally valid transfer to the recipient; and
(b) in the case of Collateral consisting of securities maintained in
book-entry form by causing a "SECURITIES INTERMEDIARY" (as defined in
Section 8-102(a)(14) of the Code) to (i) credit a "SECURITY ENTITLEMENT"
(as defined in Section 8-102(a)(17) of the Code) with respect to such
securities to a "SECURITIES ACCOUNT" (as defined in Section 8-501(a) of the
Code) maintained by or on behalf of the recipient and (ii) to issue a
confirmation to the recipient with respect to such credit. In the case of
Collateral to be delivered to the Collateral Agent, the Securities
Intermediary shall be the securities intermediary and the securities
account shall be the Collateral Account.
"TREASURY SECURITIES" has the meaning specified in the Recitals.
"VALUE" with respect to any item of Collateral on any date means, as to (a)
a Note, the principal amount thereof, (b) Cash, the face amount thereof and (c)
Treasury Securities, the aggregate principal amount thereof at maturity.
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
SECTION 2.01. THE PLEDGE. (a) The Holders from time to time as beneficial
owners of the Collateral (as defined below) acting through the Purchase Contract
Agent, as their attorney-in-fact, and the Purchase Contract Agent, as nominal
owner of the Collateral, each hereby pledge and grant to the Collateral Agent,
for the benefit of the Company, as collateral security for the performance when
due by such Holders of their respective obligations under the related Purchase
Contracts, a security interest in all of the right, title and interest of the
Purchase Contract Agent and such Holders (i) in the Notes constituting a part of
the Securities and any Treasury Securities delivered in exchange for any Notes,
any Notes delivered in exchange for any Treasury Securities, in accordance with
Article IV hereof, in each case that have been Transferred to or received by the
Collateral Agent and not released by the Collateral Agent to such Holders under
the provisions of this Agreement; (ii) in payments made by Holders pursuant to
Section 4.04; (iii) in the Collateral Account and all securities, financial
assets, Cash and other property credited thereto and all Security Entitlements
related thereto; (iv) in the Treasury Portfolio purchased on behalf of the
Holders of Corporate Units by the Collateral Agent upon the occurrence of a
Successful Initial Remarketing or a Tax Event Redemption as provided in Article
VI, or otherwise, and (v) all Proceeds of the foregoing (all of the foregoing,
collectively, the "COLLATERAL").
Prior to or concurrently with the execution and delivery of this Agreement,
the Purchase Contract Agent, on behalf of the initial Holders of the Securities,
shall cause the Notes comprising a part of the Corporate Units to be Transferred
to the Collateral Agent for the benefit of the Company. Such Notes shall be
Transferred by physically delivering such Notes to the Securities Intermediary
indorsed in blank (or accompanied by a stock or bond power indorsed in blank)
and causing the Securities Intermediary to credit the Collateral Account with
such Notes such that security entitlements with respect to such Notes are
credited to the Collateral Account. In the event a Holder of Corporate Units so
elects, such Holder may Transfer Treasury Securities to the Collateral Agent for
the benefit of the Company as provided in Section 4.01 hereof in exchange for
the release by the Collateral Agent on behalf of the Company of Notes with an
aggregate principal amount equal to the aggregate principal amount of the
Treasury Securities so Transferred to the Purchase Contract Agent on behalf of
such Holder. In the event that a Holder of Treasury Units so elects, such Holder
may Transfer Notes to the Collateral Agent for the benefit of the Company as
provided in Section 4.2 hereof in exchange for the release by the Collateral
Agent on behalf of the Company of Treasury Securities with an aggregate
principal amount at maturity equal to the aggregate principal amount of the
Notes so transferred to the Purchase Contract Agent on behalf of such Holder.
Treasury Securities shall be Transferred to the Collateral Account maintained by
the Collateral Agent at the Securities Intermediary by book-entry transfer to
the Collateral Account in accordance with the TRADES Regulations and other
applicable law and by the notation by the Securities Intermediary on its books
that a Security Entitlement with respect to such Treasury Securities has been
credited to the Collateral Account.
(b) For purposes of perfecting the Pledge under applicable law, including,
to the extent applicable, the TRADES Regulations or the Uniform Commercial Code
as adopted and in effect in any applicable jurisdiction, the Collateral Agent
shall be the agent of the Company as provided herein. The pledge provided in
this Section 2.01 is herein referred to as the "PLEDGE" and the Notes or
Treasury Securities subject to the Pledge, excluding any Notes that are
delivered pursuant to Section 6.02 hereof or Treasury Securities released from
the Pledge as provided in Article IV hereof, are hereinafter referred to as
"PLEDGED NOTES" or the "PLEDGED TREASURY SECURITIES," respectively. Subject to
the Pledge and the provisions of Section 2.02 hereof, the Holders from time to
time shall have full beneficial ownership of the Collateral. Whenever directed
by the Collateral Agent acting on behalf of the Company, the Securities
Intermediary shall have the right to reregister the Notes or any other
securities held in physical form in its name.
Except as may be required in order to release Notes in connection with a
Holder's election to convert its investment from a Corporate Unit to a Treasury
Unit, or except as otherwise required to release Notes as specified herein,
neither the Collateral Agent nor the Securities Intermediary shall relinquish
physical possession of any certificate evidencing a Note prior to the
termination of this Agreement, except Notes may be held in any clearing
corporation in an account including only assets of customers of the Collateral
Agent or Securities Intermediary. If it becomes necessary for the Securities
Intermediary to relinquish physical possession of a certificate in order to
release a portion of the Notes evidenced thereby from the Pledge, the Securities
Intermediary shall use its best efforts to obtain physical possession of a
replacement certificate evidencing any Notes remaining subject to the Pledge
hereunder registered to it or indorsed in blank (or accompanied by a stock or
bond power indorsed in blank) within 15 days of the date it relinquished
possession. The Securities Intermediary shall promptly notify the Company and
the Collateral Agent of the Securities Intermediary's failure to obtain
possession of any such replacement certificate as required hereby.
SECTION 2.02. CONTROL AND PERFECTION. (a) In connection with the Pledge
granted in Section 2.01, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, and the Purchase Contract Agent each hereby authorize
and direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent on behalf of the Company may give in writing with respect to
the Collateral Account, the Collateral credited thereto and any Security
Entitlements with respect to any thereof. Such instructions and entitlement
orders may, without limitation, direct the Securities Intermediary to transfer,
redeem, sell, liquidate, assign, deliver or otherwise dispose of the Notes, the
Treasury Securities, the Treasury Portfolio, and any Security Entitlements with
respect thereto and to pay and deliver any income, proceeds or other funds
derived therefrom to the Company. The Holders from time to time acting through
the Purchase Contract Agent hereby further authorize and direct the Collateral
Agent, as agent of the Company, to itself issue instructions and entitlement
orders, and to otherwise take action, with respect to the Collateral Account,
the Collateral credited thereto and any security entitlements with respect
thereto, pursuant to the terms and provisions hereof, all without the necessity
of obtaining the further consent of the Purchase Contract Agent or any of the
Holders. The Collateral Agent shall be the agent of the Company and shall act as
directed in writing by the Company. Without limiting the generality of the
foregoing, the Collateral Agent shall issue entitlement orders to the Securities
Intermediary when and as directed by the Company.
(b) The Securities Intermediary hereby confirms and agrees that: (i) all
securities or other property underlying any financial assets credited to the
Collateral Account shall be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in blank or credited to
another collateral account maintained in the name of the Securities Intermediary
and in no case will any financial asset credited to the Collateral Account be
registered in the name of the Purchase Contract Agent, the Collateral Agent, the
Company or any Holder, payable to the order of, or specially indorsed to, the
Purchase Contract Agent, the Collateral Agent, the Company or any Holder except
to the extent the foregoing have been specially indorsed to the Securities
Intermediary or in blank; (ii) all property delivered to the Securities
Intermediary pursuant to this Pledge Agreement (including, without limitation,
any Notes, the Treasury Portfolio or Treasury Securities) will be promptly
credited to the Collateral Account; (iii) the Collateral Account is an account
to which financial assets are or may be credited, and the Securities
Intermediary shall, subject to the terms of this Agreement, treat the Purchase
Contract Agent as entitled to exercise the rights of any financial asset
credited to the Collateral Account; (iv) the Securities Intermediary has not
entered into, and until the termination of this Agreement will not enter into,
any agreement with any other person relating to the Collateral Account and/or
any financial assets credited thereto pursuant to which it has agreed to comply
with entitlement orders (as defined in Section 8-102(a)(8) of the Code) of such
other person; and (v) the Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into, any agreement with
the Company, the Collateral Agent or the Purchase Contract Agent purporting to
limit or condition the obligation of the Securities Intermediary to comply with
entitlement orders as set forth in this Section 2.02 hereof.
(c) The Securities Intermediary hereby agrees that each item of property
(whether investment property, financial asset, security, instrument or cash)
credited to the Collateral Account shall be treated as a "FINANCIAL ASSET"
within the meaning of Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes and appoints
the Collateral Agent and the Company, with full power of substitution, as the
Purchase Contract Agent's attorneys-in-fact to take on behalf of, and in the
name, place and stead of, the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.01. The grant of such
power-of-attorney shall not be deemed to require of the Collateral Agent any
specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder.
ARTICLE III
DISTRIBUTIONS ON PLEDGED COLLATERAL
So long as the Purchase Contract Agent is the registered owner of the
Pledged Notes, it shall receive all payments thereon. If the Pledged Notes are
reregistered, such that the Collateral Agent becomes the registered holder, all
payments of principal on the Pledged Notes or, if applicable, the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, or interest payments on the Pledged Notes
or on the appropriate Applicable Ownership Interest (as specified in clause (B)
of the definition of such term) of the Treasury Portfolio, as the case may be,
and all payments of the principal of, or cash distributions on, any Pledged
Treasury Securities received by the Collateral Agent that are properly payable
hereunder shall be paid by the Collateral Agent by wire transfer in same day
funds:
(a) in the case of (i) interest payments with respect to the Pledged Notes
or the appropriate Applicable Ownership Interest (as specified in clause (B) of
the definition of such term) of the Treasury Portfolio, as the case may be, and
(ii) any payments of principal or, if applicable, the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio with respect to any Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
that have been released from the Pledge pursuant to Section 4.01 or 4.03 hereof,
to the Purchase Contract Agent, for the benefit of the relevant Holders of
Securities, to the account designated by the Purchase Contract Agent for such
purpose, no later than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
or after 12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day);
(b) in the case of any principal payments with respect to any Treasury
Securities that have been released from the Pledge pursuant to Section 4.02 or
4.03 hereof, to the Purchase Contract Agent, for the benefit of the Holders of
the Treasury Units, to the accounts designated by the Purchase Contract Agent in
writing for such purpose, no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral Agent (PROVIDED that in
the event such payment is received by the Collateral Agent on a day that is not
a Business Day or after 12:30 p.m., New York City time, on a Business Day, then
such payment shall be made no later than 10:30 a.m., New York City time, on the
next succeeding Business Day); and
(c) in the case of payments of the Proceeds of any Pledged Notes or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, or the
Proceeds of any Pledged Treasury Securities, to the Company on the Purchase
Contract Settlement Date to the extent of the Purchase Price in accordance with
the procedure set forth in Section 4.06(a) or 4.06(b) hereof, in full
satisfaction of the respective obligations of the Holders under the related
Purchase Contracts and, to the extent such Proceeds exceed the Purchase Price,
to the Purchase Contract Agent for the benefit of the Holders.
All payments received by the Purchase Contract Agent as provided herein
shall be applied by the Purchase Contract Agent pursuant to the provisions of
the Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the principal amount of the Note
or, if applicable, the appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) on account of any Pledged Note or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
applicable, that, at the time of such payment, is subject to the Pledge, or a
Holder of a Treasury Unit shall receive any payments of principal on account of
any Treasury Securities that, at the time of such payment, are Pledged Treasury
Securities, the Purchase Contract Agent or such Holder shall hold the same as
trustee of an express trust for the benefit of the Company (and promptly deliver
the same over to the Company) for application to the obligations of the Holders
under the related Purchase Contracts, and the Holders shall acquire no right,
title or interest in any such payments of principal so received.
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND
SETTLEMENT OF NOTES
SECTION 4.01. SUBSTITUTION FOR NOTES AND THE CREATION OF TREASURY UNITS.
Unless a Successful Initial Remarketing or a Tax Event Redemption has occurred,
at any time on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, a Holder of Corporate Units shall have the
right to substitute Treasury Securities for the Pledged Notes securing such
Holder's obligations under the Purchase Contract(s) comprising a part of its
Corporate Units in integral multiples of 40 Corporate Units by (a) Transferring
to the Collateral Agent Treasury Securities having a Value equal to the
aggregate principal amount of the Pledged Notes to be released and transferring
the related Corporate Units to the Purchase Contract Agent, accompanied by a
notice, substantially in the form of Exhibit B hereto, to the Purchase Contract
Agent stating that such Holder has Transferred the relevant Treasury Securities
to the Collateral Agent pursuant to clause (a) above (stating the Value of the
Treasury Securities Transferred by such Holder) and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release from the Pledge the
Pledged Notes related to such Corporate Units. The Purchase Contract Agent shall
instruct the Collateral Agent in the form provided in Exhibit A. Upon receipt of
Treasury Securities from a Holder of Corporate Units and the related instruction
from the Purchase Contract Agent, the Collateral Agent shall release the Pledged
Notes and shall promptly Transfer to the securities account specified by the
Purchase Contract Agent such Pledged Notes free and clear of any lien, pledge or
security interest created hereby. All items Transferred and/or substituted by
any Holder pursuant to this Section 4.01, Section 4.02 or any other Section of
this Agreement shall be Transferred and/or substituted free and clear of all
liens, claims and encumbrances.
SECTION 4.02. SUBSTITUTION FOR TREASURY SECURITIES AND THE RECREATION OF
CORPORATE UNITS. Unless a Successful Initial Remarketing or a Tax Event
Redemption has occurred, at any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, a Holder of
Treasury Units shall have the right to recreate Corporate Units in integral
multiples of 40 Corporate Units by (a) Transferring to the Collateral Agent
Notes having a Value equal to the Value of the Pledged Treasury Securities to be
released and (b) delivering the related Treasury Units to the Purchase Contract
Agent, accompanied by a notice, substantially in the form of Exhibit B hereto,
to the Purchase Contract Agent stating that such Holder has transferred the
relevant amount of Notes to the Collateral Agent pursuant to clause (a) above
and requesting that the Purchase Contract Agent instruct the Collateral Agent to
release from the Pledge the Pledged Treasury Securities underlying such Treasury
Units. The Purchase Contract Agent shall instruct the Collateral Agent in the
form provided in Exhibit A. Upon receipt of the Notes from such Holder and the
instruction from the Purchase Contract Agent, the Collateral Agent shall release
the Treasury Securities having a corresponding Value from the Pledge and shall
promptly Transfer such Treasury Securities, free and clear of any lien, pledge
or security interest created hereby, to the Purchase Contract Agent.
SECTION 4.03. TERMINATION EVENT. Upon receipt by the Collateral Agent of
written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall promptly Transfer any Pledged Notes (or the Applicable
Ownership Interest of the Treasury Portfolio if a Tax Event Redemption or a
Successful Initial Remarketing has occurred) and Pledged Treasury Securities to
the Purchase Contract Agent for the benefit of the Holders of the Corporate
Units and the Treasury Units, respectively, free and clear of any lien, pledge
or security interest or other interest created hereby.
If such Termination Event shall result from the Company's becoming a debtor
under the Bankruptcy Code, and if the Collateral Agent shall for any reason fail
promptly to effectuate the release and Transfer of all Pledged Notes, the
Treasury Portfolio or of the Pledged Treasury Securities, as the case may be, as
provided by this Section 4.03, the Purchase Contract Agent shall (a) use
reasonable efforts to obtain an opinion of a nationally recognized law firm
reasonably acceptable to the Collateral Agent to the effect that, as a result of
the Company's being the debtor in such a bankruptcy case, the Collateral Agent
will not be prohibited from releasing or Transferring the Collateral as provided
in this Section 4.03, and shall deliver such opinion to the Collateral Agent
within 10 days after the occurrence of such Termination Event, and if (i) the
Purchase Contract Agent shall be unable to obtain such opinion within 10 days
after the occurrence of such Termination Event or (ii) the Collateral Agent
shall continue, after delivery of such opinion, to refuse to effectuate the
release and Transfer of all Pledged Notes, the Treasury Portfolio or the Pledged
Treasury Securities, as the case may be, as provided in this Section 4.03, then
the Purchase Contract Agent shall within 15 days after the occurrence of such
Termination Event commence an action or proceeding in the court with
jurisdiction of the Company's case under the Bankruptcy Code seeking an order
requiring the Collateral Agent to effectuate the release and transfer of all
Pledged Notes, the Treasury Portfolio or of the Pledged Treasury Securities, as
the case may be, as provided by this Section 4.03 or (b) commence an action or
proceeding like that described in Subsection (a)(ii) hereof within 10 days after
the occurrence of such Termination Event.
SECTION 4.04. CASH SETTLEMENT. (a) Unless a Successful Initial Remarketing
or a Tax Event Redemption has occurred, upon receipt by the Collateral Agent of
(i) a notice from the Purchase Contract Agent promptly after the receipt by the
Purchase Contract Agent of such notice that a Holder of a Corporate Unit has
elected, in accordance with the procedures specified in Section 5.04(a)(i) of
the Purchase Contract Agreement to settle its Purchase Contract with Cash and
(ii) payment of the amount required to settle such Purchase Contract by such
Holder prior to 11:00 a.m., New York City time, on the Business Day immediately
preceding the Purchase Contract Settlement Date in lawful money of the United
States by certified or cashier's check or wire transfer in immediately available
funds payable to or upon the order of the Company, then the Collateral Agent
shall, at the written direction of the Company, promptly invest any Cash
received from a Holder in connection with a Cash Settlement in Permitted
Investments. Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Purchase Contract Settlement Date, the Collateral Agent shall
pay the portion of such proceeds and deliver any certified or cashiers' checks
received and any funds so wired, in an aggregate amount equal to the Purchase
Price, to the Company on the Purchase Contract Settlement Date, and shall
distribute any funds in respect of the interest earned from the Permitted
Investments to the Purchase Contract Agent for payment to the relevant Holders.
(b) If a Holder of a Corporate Unit fails to notify the Purchase Contract
Agent of its intention to make a Cash Settlement in accordance with Section
5.04(a)(i) of the Purchase Contract Agreement, such failure shall constitute an
event of default under the Purchase Contract Agreement and hereunder, and the
Holder shall be deemed to have consented to the disposition of the Pledged Notes
pursuant to the remarketing as described in Section 5.04(b) of the Purchase
Contract Agreement, which is incorporated herein by reference. If a Holder of a
Corporate Unit does notify the Purchase Contract Agent as provided in Section
5.04(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
5.04(a)(ii) of the Purchase Contract Agreement, the Pledged Notes of such a
Holder will not be remarketed but instead the Collateral Agent, for the benefit
of the Company, will exercise its rights as a secured party with respect to such
Notes at the direction of the Company to retain or dispose of the Collateral in
accordance with applicable law. In addition, in the event of a Failed Secondary
Remarketing as described in Section 5.04(b) of the Purchase Contract Agreement,
such Failed Secondary Remarketing shall constitute an additional event of
default hereunder by such Holder and the Collateral Agent, for the benefit of
the Company, will also exercise its rights as a secured party with respect to
such Pledged Notes at the direction of the Company to retain or dispose of the
Collateral in accordance with applicable law.
SECTION 4.05. EARLY SETTLEMENT; MERGER EARLY SETTLEMENT. (a) Unless a
Successful Initial Remarketing or a Tax Event Redemption has occurred, upon
written notice to the Collateral Agent by the Purchase Contract Agent that one
or more Holders of Securities have elected to effect Early Settlement of their
respective obligations under the Purchase Contracts forming a part of such
Securities in accordance with the terms of the Purchase Contracts and the
Purchase Contract Agreement (setting forth the number of such Purchase Contracts
as to which such Holders have elected to effect Early Settlement), and that the
Purchase Contract Agent has received from such Holders, and paid to the Company
as confirmed in writing by the Company, the related Early Settlement Amounts
pursuant to the terms of the Purchase Contracts and the Purchase Contract
Agreement and that all conditions to such Early Settlement have been satisfied,
then the Collateral Agent shall release from the Pledge, (a) Pledged Notes in
the case of a Holder of Corporate Units or (b) Pledged Treasury Securities in
the case of a Holder of Treasury Units, as the case may be, in each case with an
aggregate principal amount, as the case may be, equal to the product of (i) the
Stated Amount times (ii) the number of such Purchase Contracts as to which such
Holders have elected to effect Early Settlement and shall Transfer all such
Pledged Notes or the Pledged Treasury Securities, as the case may be, free and
clear of the Pledge created hereby, to the Purchase Contract Agent for the
benefit of such Holders.
(b) Upon written notice to the Collateral Agent by the Purchase Contract
Agent that one or more Holders of Securities have elected to effect Merger Early
Settlement of their respective obligations under the Purchase Contracts forming
a part of such Securities in accordance with the terms of the Purchase Contracts
and the Purchase Contract Agreement (setting forth the number of such Purchase
Contracts as to which such Holders have elected to effect Merger Early
Settlement), and that the Purchase Contract Agent has received from such
Holders, and paid to the Company as confirmed in writing by the Company, the
related Merger Early Settlement Amounts pursuant to the terms of the Purchase
Contracts and the Purchase Contract Agreement and that all conditions to such
Merger Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio in the case of a Holder of
Corporate Units or (b) Pledged Treasury Securities in the case of a Holder of
Treasury Units, as the case may be, in each case with an aggregate principal
amount, as the case may be, equal to the product of (i) the Stated Amount times
(ii) the number of such Purchase Contracts as to which such Holders have elected
to effect Merger Early Settlement and shall Transfer all such Pledged Notes, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or the
Pledged Treasury Securities, as the case may be, free and clear of the Pledge
created hereby, to the Purchase Contract Agent for the benefit of such Holders.
SECTION 4.06. APPLICATION OF PROCEEDS; SETTLEMENT. (a) In the event a
Holder of Corporate Units (unless a Tax Event Redemption or a Successful Initial
Remarketing has occurred) has not elected to make an effective Cash Settlement
by notifying the Purchase Contract Agent (with a copy to the Collateral Agent)
in the manner provided for in paragraph 5.04(a)(i) in the Purchase Contract
Agreement and has not made an Early Settlement or Merger Early Settlement of the
Purchase Contracts underlying its Corporate Units, such Holder shall be deemed
to have elected to pay for the shares of Common Stock to be issued under such
Purchase Contracts from the Proceeds of the related Pledged Notes. The
Collateral Agent shall, by 10:00 a.m., New York City time, on the fourth
Business Day immediately preceding the Purchase Contract Settlement Date,
without any instruction from such Holder of Corporate Units, present the related
Pledged Notes to the Remarketing Agent for remarketing. Upon receiving such
Pledged Notes, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement and the Supplemental Remarketing Agreement, will use its commercially
reasonable best efforts to remarket such Pledged Notes on such date at the Reset
Rate. After deducting as the Remarketing Fee an amount not exceeding 25 basis
points (.25%) of the aggregate Value of the remarketed Pledged Notes from any
amount of such Proceeds in excess of the aggregate Value of the remarketed
Pledged Notes, the Remarketing Agent will remit the entire amount of the
Proceeds of such remarketing to the Collateral Agent. On the Purchase Contract
Settlement Date, the Collateral Agent shall apply that portion of the Proceeds
from such remarketing equal to the aggregate Value of such remarketed Pledged
Notes to satisfy in full the obligations of such Holders of Corporate Units to
pay the Purchase Price to purchase the Common Stock under the related Purchase
Contracts. The remaining portion of such Proceeds, if any, shall be remitted by
the Collateral Agent to the Purchase Contract Agent for payment to the Holders.
If the Remarketing Agent advises the Collateral Agent in writing that it cannot
remarket the related Pledged Notes of such Holders of Corporate Units at a price
not less than 100% of the aggregate Value of such Pledged Notes or if the
remarketing shall not have occurred because a condition precedent to the
remarketing shall not have been fulfilled, thus resulting in a Failed Secondary
Remarketing and an event of default under the Purchase Contract Agreement and
hereunder, the Collateral Agent, for the benefit of the Company will, at the
written direction of the Company, retain or dispose of the Pledged Notes in
accordance with applicable law and satisfy in full, from any such disposition or
retention, such Holder's obligation to pay the Purchase Price for the Common
Stock.
(b) In the event a Holder of Treasury Units or Corporate Units (if a Tax
Event Redemption or a Successful Initial Remarketing has occurred) has not made
a Merger Early Settlement of the Purchase Contracts underlying its Treasury
Units or Corporate Units, such Holder shall be deemed to have elected to pay for
the shares of Common Stock to be issued under such Purchase Contracts from the
Proceeds of the related Pledged Treasury Securities or the appropriate
Applicable Ownership Interest (as defined in clause (A) of the definition of
such term) of the Treasury Portfolio, as the case may be. On the Business Day
immediately prior to the Purchase Contract Settlement Date, the Collateral Agent
shall, at the written direction of the Purchase Contract Agent, which written
direction shall be furnished to the Collateral Agent prior to 11:30 a.m., New
York City time, invest the Cash proceeds of the maturing Pledged Treasury
Securities or the maturing appropriate Applicable Ownership Interest (as defined
in clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, in overnight Permitted Investments. Without receiving any
instruction from any such Holder of Treasury Units or Corporate Units, the
Collateral Agent shall apply the Proceeds of the related Pledged Treasury
Securities or appropriate Applicable Ownership Interest (as defined in clause
(A) of the definition of such term) of the Treasury Portfolio to the settlement
of such Purchase Contracts on the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities or appropriate Applicable Ownership Interest (as defined in clause
(A) of the definition of such term) of the Treasury Portfolio, as the case may
be, and the investment earnings from the investment in overnight Permitted
Investments is in excess of the aggregate Purchase Price of the Purchase
Contracts being settled thereby, the Collateral Agent shall remit such excess,
when received, to the Purchase Contract Agent for the benefit of the Holders.
(c) Pursuant to the Remarketing Agreement and subject to the terms of the
Supplemental Remarketing Agreement, on or prior to the second Business Day
immediately preceding the Initial Remarketing Date or the Secondary Remarketing
Date, as applicable, but no earlier than the Payment Date immediately preceding
such date, holders of Separate Notes may elect to have their Separate Notes
remarketed by delivering their Separate Notes, together with a notice of such
election, substantially in the form of Exhibit C hereto, to the Custodial Agent.
The Custodial Agent shall hold such Separate Notes in an account separate from
the Collateral Account. A holder of Separate Notes electing to have its Separate
Notes remarketed will also have the right to withdraw such election by written
notice to the Custodial Agent, substantially in the form of Exhibit D hereto, on
or prior to 5:00P.M. on the second Business Day immediately preceding the
Initial Remarketing Date or the Secondary Remarketing Date, as applicable, upon
which notice the Custodial Agent shall return such Separate Notes to such
holder. On the Business Day immediately preceding the Initial Remarketing Date
or the Secondary Remarketing Date, as applicable, the Custodial Agent shall
notify the Remarketing Agent of the aggregate principal amount of the Separate
Notes to be remarketed and will deliver to the Remarketing Agent for remarketing
all Separate Notes delivered to the Custodial Agent pursuant to this Section
4.06(c) and not withdrawn pursuant to the terms hereof prior to such date. After
deducting the Remarketing Fee to the extent permitted under the terms of the
Remarketing Agreement, the Remarketing Agent will remit to the Custodial Agent
the remaining portion of the proceeds for the benefit of such holders. In the
event of a Failed Initial Remarketing or a Failed Secondary Remarketing, as
applicable, the Remarketing Agent will promptly return such Separate Notes to
the Custodial Agent for redelivery to such holders.
ARTICLE V
VOTING RIGHTS--NOTES
The Purchase Contract Agent may exercise, or refrain from exercising, any
and all voting and other consensual rights pertaining to the Pledged Notes or
any part thereof for any purpose not inconsistent with the terms of this
Agreement and in accordance with the terms of the Purchase Contract Agreement;
PROVIDED that the Purchase Contract Agent shall not exercise or, as the case may
be, shall not refrain from exercising, such right if, in the judgment of the
Company, such action would impair or otherwise have a material adverse effect on
the value of all or any of the Pledged Notes; and PROVIDED FURTHER that the
Purchase Contract Agent shall give the Company and the Collateral Agent at least
five days' prior written notice of the manner in which it intends to exercise,
or its reasons for refraining from exercising, any such right. Upon receipt of
any notices and other communications in respect of any Pledged Notes, including
notice of any meeting at which holders of Notes are entitled to vote or
solicitation of consents, waivers or proxies of holders of Notes, the Collateral
Agent shall use reasonable efforts to send promptly to the Purchase Contract
Agent such notice or communication, and as soon as reasonably practicable after
receipt of a written request therefor from the Purchase Contract Agent, execute
and deliver to the Purchase Contract Agent such proxies and other instruments in
respect of such Pledged Notes (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect to
the Pledged Notes.
ARTICLE VI
RIGHTS AND REMEDIES; TAX EVENT REDEMPTION
SECTION 6.01. RIGHTS AND REMEDIES OF THE COLLATERAL AGENT. (a) In addition
to the rights and remedies specified in Section 4.04 hereof or otherwise
available at law or in equity, after an event of default hereunder, the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
"CODE") (whether or not, to the extent permitted by law, the Code is in effect
in the jurisdiction where the rights and remedies are asserted) and the TRADES
Regulations and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted. Wherever reference is made in this Agreement
to any section of the Code, such reference shall be deemed to include a
reference to any provision of the Code which is a successor to, or amendment of,
such section. Without limiting the generality of the foregoing, such remedies
may include, to the extent permitted by applicable law, (i) retention of the
Pledged Notes or other Collateral in full satisfaction of the Holders'
obligations under the Purchase Contracts or (ii) sale of the Pledged Notes or
other Collateral in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio or on account of principal payments of any Pledged
Treasury Securities as provided in Article III hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities, or such appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, and such obligations of such Holder, any and all of
the rights and remedies available to a secured party under the Code and the
TRADES Regulations after default by a debtor, and as otherwise granted herein or
under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) principal and interest on
the Pledged Notes, (ii) the principal amount of the Pledged Treasury Securities,
or (iii) the appropriate Applicable Ownership Interest of the Treasury
Portfolio, subject, in each case, to the provisions of Article III, and as
otherwise granted herein.
(d) The Purchase Contract Agent, individually and as attorney-in-fact for
each Holder of Securities, agrees that, from time to time, upon the written
request of the Collateral Agent, the 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
negligent act, its own negligent failure to act or its own wilful misconduct.
SECTION 6.02. TAX EVENT REDEMPTION. Upon the occurrence of a Tax Event
Redemption prior to May 17, 2004, or if the Initial Remarketing is unsuccessful,
prior to the Purchase Contract Settlement Date, the aggregate Redemption Price
payable on the Tax Event Redemption Date with respect to the Pledged Notes shall
be delivered to the Collateral Agent by the Note Trustee on or prior to 12:00
p.m., New York City time, by check or wire transfer in immediately available
funds at such place and at such account as may be designated by the Collateral
Agent in exchange for the Pledged Notes. In the event the Collateral Agent
receives such Redemption Price, the Collateral Agent will, at the written
direction of the Company, apply an amount, out of such Redemption Price, equal
to the aggregate Redemption Amount with respect to the Pledged Notes to purchase
from the Quotation Agent the Treasury Portfolio and promptly remit the remaining
portion of such Redemption Price to the Purchase Contract Agent for payment to
the Holders of Corporate Units. The Collateral Agent shall Transfer the Treasury
Portfolio to the Collateral Account to secure the obligation of all Holders of
Corporate Units to purchase Common Stock of the Company under the Purchase
Contracts constituting a part of such Corporate Units, in substitution for the
Pledged Notes. Thereafter the Collateral Agent shall have such security
interests, rights and obligations with respect to the Treasury Portfolio as it
had in respect of the Pledged Notes as provided in Articles II, III, IV, V and
VI, and any reference herein to the Notes shall be deemed to be reference to
such Treasury Portfolio, and any reference herein to interest on the Notes shall
be deemed to be a reference to distributions on such Treasury Portfolio.
SECTION 6.03. INITIAL REMARKETING. The Collateral Agent shall, by 10:00
a.m., New York City time, on the fourth Business Day immediately preceding May
17, 2004, without any instruction from any Holder of Corporate Units, present
the related Pledged Notes to the Remarketing Agent for remarketing. Upon
receiving such Pledged Notes, the Remarketing Agent, pursuant to the terms of
the Remarketing Agreement and the Supplemental Remarketing Agreement, will use
its commercially reasonable best efforts to remarket such Pledged Notes on such
date at a price of approximately 100.25% (but not less than 100%) of the
Treasury Portfolio Purchase Price. After deducting as the Remarketing Fee an
amount not exceeding 25 basis points (.25%) of the Treasury Portfolio Purchase
Price from any amount of such Proceeds in excess of the Treasury Portfolio
Purchase Price, the Remarketing Agent will remit the entire amount of the
Proceeds of such remarketing to the Collateral Agent on or prior to 12:00 p.m.,
New York City time, by check or wire transfer in immediately available funds at
such place and at such account as may be designated by the Collateral Agent in
exchange for the Pledged Notes. In the event the Collateral Agent receives such
Proceeds, the Collateral Agent will, at the written direction of the Company,
apply an amount equal to the Treasury Portfolio Purchase Price to purchase from
the Quotation Agent the Treasury Portfolio and promptly remit the remaining
portion of such Proceeds to the Purchase Contract Agent for payment to the
Holders of Corporate Units. The Collateral Agent shall Transfer the Treasury
Portfolio to the Collateral Account to secure the obligation of all Holders of
Corporate Units to purchase Common Stock of the Company under the Purchase
Contracts constituting a part of such Corporate Units, in substitution for the
Pledged Notes. Thereafter the Collateral Agent shall have such security
interests, rights and obligations with respect to the Treasury Portfolio as it
had in respect of the Pledged Notes as provided in Articles II, III, IV, V and
VI, and any reference herein to the Notes shall be deemed to be reference to
such Treasury Portfolio, and any reference herein to interest on the Notes shall
be deemed to be a reference to distributions on such Treasury Portfolio.
SECTION 6.04. SUBSTITUTIONS. Whenever a Holder has the right to substitute
Treasury Securities or Notes, as the case may be, for Collateral held by the
Collateral Agent, such substitution shall not constitute a novation of the
security interest created hereby.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.01. REPRESENTATIONS AND WARRANTIES. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and lien on
the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and, in the
case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under Article II
hereof;
(c) upon the Transfer of the Collateral to the Collateral Account, the
Collateral Agent, for the benefit of the Company, will have a valid and
perfected first priority security interest therein (assuming that any central
clearing operation or any Intermediary or other entity not within the control of
the Holder involved in the Transfer of the Collateral, including the Collateral
Agent, gives the notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the establishment
and exercise of control pursuant to Section 2.02 hereof); and
(d) the execution and performance by the Holder of its obligations under
this Agreement will not result in the creation of any security interest, lien or
other encumbrance on the Collateral other than the security interest and lien
granted under Article II hereof or violate any provision of any existing law or
regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.
SECTION 7.02. COVENANTS. The Holders from time to time, acting through the
Purchase Contract Agent as their attorney-in-fact (it being understood that the
Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other security interest whatsoever over the Collateral or any part of it other
than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the pledge hereunder,
transferred in connection with the Transfer of the Securities.
ARTICLE VIII
THE COLLATERAL AGENT
It is hereby agreed as follows:
SECTION 8.01. APPOINTMENT, POWERS AND IMMUNITIES. The Collateral Agent
shall act as Agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. Each of
the Collateral Agent, the Custodial Agent and the Securities Intermediary: (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants or obligations shall be inferred from
this Agreement against any of them, nor shall any of them be bound by the
provisions of any agreement beyond the specific terms hereof; (b) shall not be
responsible for any recitals contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by it under, this
Agreement, the Securities or the Purchase Contract Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement (other than as against the Collateral Agent), the Securities or the
Purchase Contract Agreement or any other document referred to or provided for
herein or therein or for any failure by the Company or any other Person (except
the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be) to perform any of its obligations hereunder or thereunder or for
the perfection, priority or, except as expressly required hereby, maintenance of
any security interest created hereunder; (c) shall not be required to initiate
or conduct any litigation or collection proceedings hereunder (except in the
case of the Collateral Agent, pursuant to directions furnished under Section
8.02 hereof, subject to Section 8.06 hereof); (d) shall not be responsible for
any action taken or omitted to be taken by it hereunder or under any other
document or instrument referred to or provided for herein or in connection
herewith or therewith, except for its own negligence, bad faith or wilful
misconduct; (e) shall not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with respect to, the
Securities or other property deposited hereunder; and (f) shall not be
responsible for the acts or omissions of any clearing corporation with whom
collateral is deposited. Subject to the foregoing, during the term of this
Agreement, the Collateral Agent shall take all reasonable action in connection
with the safekeeping and preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the Value of
the Collateral. Notwithstanding the foregoing, the Collateral Agent, the
Custodial Agent, the Purchase Contract Agent and Securities Intermediary, each
in its individual capacity, hereby waive any right of setoff, bankers lien,
liens or perfection rights as securities intermediary or any counterclaim with
respect to any of the Collateral.
SECTION 8.02. INSTRUCTIONS OF THE COMPANY. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, to direct the time, method and place of conducting any proceeding
for the realization of any right or remedy available to the Collateral Agent, or
of exercising any power conferred on the Collateral Agent, the Custodial Agent
or the Securities Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this Agreement; PROVIDED,
HOWEVER, that (a) such direction shall not conflict with the provisions of any
law or of this Agreement and (b) the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall be adequately indemnified as provided herein.
Nothing in this Section 8.02 shall impair the right of the Collateral Agent in
its discretion to take any action or omit to take any action which it deems
proper and which is not inconsistent with such direction.
SECTION 8.03. RELIANCE. Each of the Securities Intermediary, the Custodial
Agent and the Collateral Agent shall be entitled conclusively to rely upon any
certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be. As to
any matters not expressly provided for by this Agreement, the Collateral Agent,
the Custodial Agent and the Securities Intermediary shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.
SECTION 8.04. RIGHTS IN OTHER CAPACITIES. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any Holder of
Securities and any holder of Separate Notes (and any of their respective
subsidiaries or affiliates) as if it were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary and their
affiliates may accept fees and other consideration from the Purchase Contract
Agent, any Holder of Securities or any holder of Separate Notes without having
to account for the same to the Company; PROVIDED that each of the Securities
Intermediary, the Custodial Agent and the Collateral Agent covenants and agrees
with the Company that it shall not accept, receive or permit there to be created
in favor of itself and shall take no affirmative action to permit there to be
created in favor of any other Person, any security interest, lien or other
encumbrance of any kind in or upon the Collateral and the Collateral shall be
segregated on the books and records of the Collateral Agent and not commingled
with any other assets of any such Person.
SECTION 8.05. NON-RELIANCE. None of the Securities Intermediary, the
Custodial Agent or the Collateral Agent shall be required to keep itself
informed as to the performance or observance by the Purchase Contract Agent or
any Holder of Securities of this Agreement, the Purchase Contract Agreement, the
Securities or any other document referred to or provided for herein or therein
or to inspect the properties or books of the Purchase Contract Agent or any
Holder of Securities. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall not have any duty or responsibility to provide the
Company or the Remarketing Agent with any credit or other information concerning
the affairs, financial condition or business of the Purchase Contract Agent, any
Holder of Securities or any holder of Separate Notes (or any of their respective
subsidiaries or affiliates) that may come into the possession of the Collateral
Agent, the Custodial Agent or the Securities Intermediary or any of their
respective affiliates.
SECTION 8.06. COMPENSATION AND INDEMNITY. The Company agrees: (a) to pay
each of the Collateral Agent and the Custodial Agent from time to time such
compensation as shall be agreed in writing between the Company and the
Collateral Agent or the Custodial Agent, as the case may be, for all services
rendered by each of them hereunder and (b) to indemnify the Collateral Agent,
the Custodial Agent and the Securities Intermediary for, and to hold each of
them harmless from and against, any loss, liability or reasonable out-of-pocket
expense incurred without gross negligence, wilful misconduct or bad faith on its
part, arising out of or in connection with the acceptance or administration of
its powers and duties under this Agreement, including the reasonable
out-of-pocket costs and expenses (including reasonable fees and expenses of
counsel) of defending itself against any claim or liability in connection with
the exercise or performance of such powers and duties. The Collateral Agent, the
Custodial Agent and the Securities Intermediary shall each promptly notify the
Company of any third-party claim which may give rise to the indemnity hereunder
and give the Company the opportunity to participate in the defense of such claim
with counsel reasonably satisfactory to the indemnified party, and no such claim
shall be settled without the written consent of the Company, which consent shall
not be unreasonably withheld.
SECTION 8.07. FAILURE TO ACT. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent and the Custodial Agent shall
be entitled, after prompt notice to the Company and the Purchase Contract Agent,
at its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and neither the Collateral Agent nor the Custodial
Agent shall be or become liable in any way to any of the parties hereto for its
failure or refusal to comply with such conflicting claims, demands or
instructions. The Collateral Agent and the Custodial Agent shall be entitled to
refuse to act until either (a) such conflicting or adverse claims or demands
shall have been finally determined by a court of competent jurisdiction or
settled by agreement between the conflicting parties as evidenced in a writing,
satisfactory to the Collateral Agent or the Custodial Agent, as the case may be,
or (b) the Collateral Agent or the Custodial Agent, as the case may be, shall
have received security or an indemnity reasonably satisfactory to the Collateral
Agent or the Custodial Agent, as the case may be, sufficient to save the
Collateral Agent or the Custodial Agent, as the case may be, harmless from and
against any and all loss, liability or reasonable out-of-pocket expense which
the Collateral Agent or the Custodial Agent, as the case may be, may incur by
reason of its acting without bad faith, wilful misconduct or negligence. The
Collateral Agent or the Custodial Agent may in addition elect to commence an
interpleader action or seek other judicial relief or orders as the Collateral
Agent or the Custodial Agent, as the case may be, may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor the Custodial Agent shall be required to take any action
that is in its opinion contrary to law or to the terms of this Agreement, or
which would in its opinion subject it or any of its officers, employees or
directors to liability.
SECTION 8.08. RESIGNATION. Subject to the appointment and acceptance of a
successor Collateral Agent or Custodial Agent as provided below, (a) the
Collateral Agent and the Custodial Agent may resign at any time by giving notice
thereof to the Company and the Purchase Contract Agent as attorney-in-fact for
the Holders of Securities, (b) the Collateral Agent and the Custodial Agent may
be removed at any time by the Company and (c) if the Collateral Agent or the
Custodial Agent fails to perform any of its material obligations hereunder in
any material respect for a period of not less than 20 days after receiving
written notice of such failure by the Purchase Contract Agent and such failure
shall be continuing, the Collateral Agent or the Custodial Agent may be removed
by the Purchase Contract Agent. The Purchase Contract Agent shall promptly
notify the Company of any removal of the Collateral Agent pursuant to clause (c)
of the immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent or
Custodial Agent, as the case may be. If no successor Collateral Agent or
Custodial Agent, as the case may be, shall have been so appointed and shall have
accepted such appointment within 30 days after the retiring Collateral Agent's
or Custodial Agent's giving of notice of resignation or such removal, then the
retiring Collateral Agent or Custodial Agent, as the case may be, may petition
any court of competent jurisdiction for the appointment of a successor
Collateral Agent or Custodial Agent, as the case may be. Each of the Collateral
Agent and the Custodial Agent shall be a bank which has an office in New York,
New York with a combined capital and surplus of at least $75,000,000. Upon the
acceptance of any appointment as Collateral Agent or Custodial Agent, as the
case may be, hereunder by a successor Collateral Agent or Custodial Agent, as
the case may be, such successor shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent or Custodial Agent, as the case may be, and the retiring Collateral Agent
or Custodial Agent, as the case may be, shall take all appropriate action to
transfer any money and property held by it hereunder (including the Collateral)
to such successor. The retiring Collateral Agent or Custodial Agent shall, upon
such succession, be discharged from its duties and obligations as Collateral
Agent or Custodial Agent hereunder. After any retiring Collateral Agent's or
Custodial Agent's resignation hereunder as Collateral Agent or Custodial Agent,
the provisions of this Article VIII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Collateral Agent or Custodial Agent. Any resignation or removal of the
Collateral Agent hereunder shall be deemed for all purposes of this Agreement as
the simultaneous resignation or removal of the Custodial Agent and the
Securities Intermediary.
SECTION 8.09. RIGHT TO APPOINT AGENT OR ADVISOR. The Collateral Agent shall
have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 8.09
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
SECTION 8.10. SURVIVAL. The provisions of this Article VIII shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent or the Custodial Agent.
SECTION 8.11. EXCULPATION. Anything in this Agreement to the contrary
notwithstanding, in no event shall any of the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, employees or agents be
liable under this Agreement to any third party for indirect, special, punitive,
or consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent, the Custodial Agent or the Securities Intermediary, or any of them,
incurred without any act or deed that is found to be attributable to gross
negligence or wilful misconduct on the part of the Collateral Agent, the
Custodial Agent or the Securities Intermediary.
ARTICLE IX
AMENDMENT
SECTION 9.01. AMENDMENT WITHOUT CONSETN OF HOLDERS. Without the consent of
any Holders or the holders of any Separate Notes, the Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent, at any time and from time to time, may amend this Agreement, in
form satisfactory to the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company;
(b) to add to the covenants of the Company for the benefit of the Holders,
or to surrender any right or power herein conferred upon the Company so long as
such covenants or such surrender do not adversely affect the validity,
perfection or priority of the security interests granted or created hereunder;
(c) to evidence and provide for the acceptance of appointment hereunder by
a successor Collateral Agent, Securities Intermediary or Purchase Contract
Agent; or
(d) to cure any ambiguity, to correct or supplement any provisions herein
which may be inconsistent with any other such provisions herein, or to make any
other provisions with respect to such matters or questions arising under this
Agreement; PROVIDED such action shall not adversely affect the interests of the
Holders.
SECTION 9.02. AMENDMENT WITH CONSENT OF HOLDERS. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; PROVIDED, HOWEVER, that no
such supplemental agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(a) change the amount or type of Collateral underlying a Security (except
for the rights of holders of Corporate Units to substitute the Treasury
Securities for the Pledged Notes or the rights of Holders of Treasury Units to
substitute Notes for the Pledged Treasury Securities), impair the right of the
Holder of any Security to receive distributions on the underlying Collateral or
otherwise adversely affect the Holder's rights in or to such Collateral;
(b) otherwise effect any action that would require the consent of the
Holder of each Outstanding Security affected thereby pursuant to the Purchase
Contract Agreement if such action were effected by an agreement supplemental
thereto;
(c) reduce the amount payable or distributable to Holders upon the
remarketing of Notes; or
(d) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment.
If any amendment referred to above would adversely affect only the
Corporate Units or the Treasury Units, then only the affected class of Holders
shall be entitled to vote on the amendment and the amendment shall not be
effective except with the consent of the Holders of not less than a majority of
the affected class. It shall not be necessary for any Act of Holders under this
Article IX to approve the particular form of any proposed amendment, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. EXECUTION OF AMENDMENTS. In executing any amendment permitted
by this Section, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent shall be entitled to receive and
(subject to Section 8.01 hereof, with respect to the Collateral Agent, and
Section 7.01 of the Purchase Contract Agreement, with respect to the Purchase
Contract Agent) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by this
Agreement and that all conditions precedent, if any, to the execution and
delivery of such amendment have been satisfied. All amendments must be in
writing, signed by all parties to this Agreement.
SECTION 9.04. EFFECT OF AMENDMENTS. Upon the execution of any amendment
under this Article IX, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
SECTION 9.05. REFERENCE TO AMENDMENTS. Security Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Article IX may, and shall if required by the
Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement and without charge or expense
to Holders in exchange for Outstanding Security Certificates.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. NO WAIVER. To the extent permitted by law, no failure on the
part of any party hereto or any of its agents to exercise, and no course of
dealing with respect to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise by any party hereto or any of its agents of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. To the extent permitted by law, the remedies
herein are cumulative and are not exclusive of any remedies provided by law.
SECTION 10.02. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting
the foregoing, the above choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent and the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account. The Company,
the Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, hereby submit to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum, as well as to trial by jury.
SECTION 10.03. NOTICES. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "ADDRESS FOR NOTICES" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
SECTION 10.04. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.
SECTION 10.05. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
SECTION 10.06. SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be construed in order to carry out the intentions of the
parties hereto as nearly as may be possible and (b) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
SECTION 10.07. EXPENSES, ETC. The Company agrees to reimburse the
Collateral Agent and the Custodial Agent for: (a) all reasonable out-of-pocket
costs and expenses of the Collateral Agent and the Custodial Agent (including,
without limitation, the reasonable fees and expenses of counsel to the
Collateral Agent and the Custodial Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.07; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
SECTION 10.08. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the Purchase
Contracts or the Securities or any other agreement or instrument relating
thereto;
(b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of Securities under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
KANSAS CITY SOUTHERN INDUSTRIES, INC.,
by:
------------------------------------
Name:
Title:
Address for Notices:
Kansas City Southern Industries, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: [Chief Financial Officer]
Telephone:
THE BANK OF NEW YORK,
as Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
by:
------------------------------------
Name:
Title:
Address for Notices:
[
---------------------------------------
----------------------------------------
----------------------------------------
New York, NY
--------------------------]
Attention:
---------------------------
Telecopy:
---------------------------
THE CHASE MANHATTAN BANK,
as Collateral Agent, Custodial Agent and
as Securities Intermediary
by
------------------------------------
Name:
Title:
Address for Notices:
[
---------------------------------------
----------------------------------------
----------------------------------------
New York, NY
--------------------------]
Attention: (Corporate Trust
Administration)
Telecopy:
---------------------------
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Kansas City Southern Industries, Inc. (the "Company")
We hereby notify you in accordance with Section [4.01] [4.02] of the Pledge
Agreement, dated as of [ ], 2001, (the "PLEDGE AGREEMENT") among the Company,
yourselves, as Collateral Agent, Custodial Agent and Securities Intermediary and
ourselves, as Purchase Contract Agent and as attorney-in-fact for the holders of
[CORPORATE UNITS] [TREASURY UNITS] from time to time, that the holder of the
Securities listed below (the "Holder") has elected to substitute $ [aggregate
principal amount of Treasury Securities] [aggregate principal amount of Notes]
in exchange for an equal Value of [Pledged Notes] [Pledged Treasury Securities]
held by you in accordance with the Pledge Agreement and has delivered to us a
notice stating that the Holder has Transferred [Treasury Securities] [Notes] to
you, as Collateral Agent. We hereby instruct you, upon receipt of such [Pledged
Treasury Securities] [Pledged Notes], and upon the payment by such Holder of any
applicable fees, to release the [Notes] [Treasury Securities] related to such
[Corporate Units] [Treasury Units] to us in accordance with the Holder's
instructions. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.
Date: THE BANK OF NEW YORK,
-------------
by
------------------------------------
Name:
Title:
Signature Guarantee:
------------------------------------
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Notes] for the [Pledged Notes] [Pledged Treasury
Securities]:
-----------------------------------------------------
Name Social Security or other
Taypayer Identification, if any
-----------------------------------------------------
Address
-----------------------------------------------------
-----------------------------------------------------
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
[address]
Re: Mandatory Convertible Units of Kansas City Southern Industries, Inc.
(the "Company")
The undersigned Holder hereby notifies you that it has delivered to [The
Chase Manhattan Bank], as Collateral Agent, [$ aggregate principal amount of
Treasury Securities] [$ aggregate principal amount of Notes] in exchange for an
equal Value of [Pledged Notes] [Pledged Treasury Securities] held by the
Collateral Agent, in accordance with Section [4.01][4.02] of the Pledge
Agreement, dated [ ], 2001 (the "PLEDGE AGREEMENT"), between you, the Company
and the Collateral Agent. The undersigned Holder has paid the Collateral Agent
all applicable fees relating to such exchange. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Notes] [Pledged Treasury Securities] related
to such [Corporate Units] [Treasury Units]. Capitalized terms used herein but
not defined shall have the meaning set forth in the Pledge Agreement.
Date:
------------- ------------------------------------
Signature
------------------------------------
Signature Guarantee:
Please print name and address of Registered Holder:
-----------------------------------------------------
Name Social Security or other
Taypayer Identification, if any
-----------------------------------------------------
Address
-----------------------------------------------------
-----------------------------------------------------
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Notes of The Kansas City Southern Railway Company
The undersigned hereby notifies you in accordance with Section 4.06(c) of
the Pledge Agreement, dated as of [ ], 2001 (the "PLEDGE AGREEMENT"), among
Kansas City Southern Industries, Inc., yourselves, as Collateral Agent,
Securities Intermediary and Custodial Agent, and The Bank of New York, as
Purchase Contract Agent and as attorney-in-fact for the Holders of Corporate
Units and Treasury Units from time to time, that the undersigned elects to
deliver $[ ] aggregate principal amount of Notes for delivery to the Remarketing
Agent on the Business Day immediately preceding the [Initial Remarketing Date]
[Secondary Remarketing Date] for remarketing pursuant to Section 4.06(c) of the
Pledge Agreement. The undersigned will, upon request of the Remarketing Agent,
execute and deliver any additional documents deemed by the Remarketing Agent or
by the Company to be necessary or desirable to complete the sale, assignment and
transfer of the Notes tendered hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of such
remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
PAYMENT INSTRUCTIONS". The undersigned hereby instructs you, in the event of a
Failed [Initial] [Secondary] Remarketing, upon receipt of the Notes tendered
herewith from the Remarketing Agent, to be delivered to the person(s) and the
address(es) indicated herein under "B. DELIVERY INSTRUCTIONS".
With this notice, the undersigned hereby (a) represents and warrants that
the undersigned has full power and authority to tender, sell, assign and
transfer the Notes tendered hereby and that the undersigned is the record owner
of any Notes tendered herewith in physical form or a participant in The
Depositary Trust Company ("DTC") and the beneficial owner of any Notes tendered
herewith by book-entry transfer to your account at DTC and (b) agrees to be
bound by the terms and conditions of Section 4.06(c) of the Pledge Agreement.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date:
----------- -------------------------------------
by
---------------------------------
Name:
Title:
Signature Guarantee:
---------------------------------
Please print name and address:
-----------------------------------------------------
Name Social Security or other
Taypayer Identification, if any
-----------------------------------------------------
Address
-----------------------------------------------------
-----------------------------------------------------
--------------------------------------------------------------------------------
A. PAYMENT INSTRUCTIONS
--------------------------------------------------------------------------------
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
--------------------------------------------------------------------------------
Name(s)
--------------------------------------------------------------------------------
(Please Print)
Address
(Please Print)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Zip Code)
--------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
--------------------------------------------------------------------------------
B. DELIVERY INSTRUCTIONS
--------------------------------------------------------------------------------
In the event of a failed remarketing, Notes which are in physical form should be
delivered to the person(s) set forth below and mailed to the address set forth
below.
--------------------------------------------------------------------------------
Name(s)
--------------------------------------------------------------------------------
(Please Print)
Address
(Please Print)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Zip Code)
--------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
--------------------------------------------------------------------------------
In the event of a failed remarketing, Notes which are in book-entry form should
be credited to the account at the Depositary Trust Company set forth below.
----------------------------------------
DTC Account Number
----------------------------------------
Name of Account Party:
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Notes of The Kansas City Southern Railway Company
The undersigned hereby notifies you in accordance with Section 4.06(c) of
the Pledge Agreement, dated as of [ ], 2001 (the "PLEDGE AGREEMENT") among
Kansas City Southern Industries, Inc., yourselves, as Collateral Agent,
Securities Intermediary and Custodial Agent and The Bank of New York, as
Purchase Contract Agent and as attorney-in-fact for the Holders of Corporate
Units and Treasury Units from time to time, that the undersigned elects to
withdraw the $[ ] aggregate principal amount of Notes delivered to the Custodial
Agent on [ ], 2001 for remarketing pursuant to Section 4.06(c) of the Pledge
Agreement. The undersigned hereby instructs you to return such Notes to the
undersigned in accordance with the undersigned's instructions. With this notice,
the undersigned hereby agrees to be bound by the terms and conditions of Section
4.06(c) of the Pledge Agreement. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date:
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by
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Name:
Title:
Signature Guarantee:
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