EXHIBIT 7
PLEDGE AGREEMENT
DATED AS OF JUNE __, 2001
AMONG
ELECTRONIC DATA SYSTEMS CORPORATION
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
THE CHASE MANHATTAN BANK
AS PURCHASE CONTRACT AGENT
PLEDGE AGREEMENT, dated as of June __, 2001 (this "Agreement"), among
Electronic Data Systems Corporation, a Delaware corporation (the "Company"),
First Union Trust Company, National Association, a national banking association
duly incorporated under the laws of the United States of America, 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 Chase Manhattan Bank, 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 28,000,000 FELINE PRIDES of
the Company (or 32,200,000 FELINE PRIDES if the Underwriters' overallotment
option is exercised in full), having a stated amount of $50 (the "Stated
Amount") per FELINE PRIDE; and
WHEREAS, the FELINE PRIDES will initially consist of 28,000,000 units
(or 32,200,000 units if the underwriters' overallotment option is exercised in
full (referred to as "Income PRIDES") with a stated amount, per Income PRIDES,
equal to the Stated Amount. Each Income PRIDES will initially consist of (a) a
stock purchase contract (the "Purchase Contract") pursuant to 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
fraction of a newly issued share 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; and
WHEREAS, if Holders of Income PRIDES substitute collateral as
contemplated by Section 4.1, each unit created thereby (referred to as "Growth
PRIDES" and, together with the Income PRIDES, the "Securities") will initially
consist of (a) a Purchase Contract pursuant to 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 fraction of a newly issued share of Common Stock
of the Company, equal to the Settlement Rate, and (b) a 1/20, or 5.0%, undivided
beneficial ownership interest in a zero-coupon U.S. Treasury Security (CUSIP No.
_________) having a principal amount at maturity equal to $1,000 and maturing on
August 16, 2004 (the "Treasury Securities"); and
WHEREAS, pursuant to the terms of the Indenture (as defined below) the
Company will issue $1,400,000,000 aggregate principal amount of Senior Notes due
August 17,
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2006 (or $1,610,000,000 if the Underwriters' overallotment option is exercised
in full) (the "Notes"), each having a principal amount equal to $50; and
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
subsection (d); and
"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.
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"Business Day" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State of
New York) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the securities account (number ______)
maintained at [_____________] in the name "The Chase Manhattan Bank, as Purchase
Contract Agent on behalf of the holders of certain securities of Electronic Data
Systems Corporation, Collateral Account subject to the security interest of
First Union Trust Company, National Association, as Collateral Agent, for the
benefit of Electronic Data Systems Corporation, 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.
"Growth PRIDES" has the meaning specified in the recitals.
"Income PRIDES" 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.
"Notes" has the meaning specified in the Recitals.
"Note Trustee" means Chase Bank of Texas, National Association, as
trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Permitted Investments" means any one of the following which shall
mature not later than the next succeeding Business Day (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a
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general obligation of it); (ii) deposits, certificates of deposit or acceptances
with an original maturity of 365 days or less of any institution which is a
member of the Federal Reserve System having combined capital and surplus and
undivided profits of not less than US $200.0 million at the time of deposit;
(iii) investments with an original maturity of 365 days or less of any Person
that is fully and unconditionally guaranteed by a bank referred to in clause
(ii); (iv) investments in commercial paper, other than commercial paper issued
by the Company or its affiliates, of any corporation incorporated under the laws
of the United States or any State thereof, which commercial paper has a rating
at the time of purchase at least equal to "A-1" by Standard & Poor's Ratings
Services ("S&P") or at least equal to "P-1" by Xxxxx'x 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 2.1 hereof.
"Pledged Notes" has the meaning specified in Section 2.1 hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
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 ss. 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.
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"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:
(i) 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;
(ii) in the case of Collateral consisting of securities maintained in
book-entry form by causing a "securities intermediary" (as defined in
Section 8-102(a)(14) of the Code) to (i) credit a "security entitlement"
(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 (i) a Note, the principal amount thereof, (ii) Cash, the face amount thereof
and (iii) Treasury Securities, the aggregate principal amount thereof at
maturity.
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
Section 2.1 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
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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 (a) in the Notes constituting a part of the Securities and any Treasury
Securities delivered in exchange for any Notes (or, if applicable, the
Applicable Ownership Interest in the Treasury Portfolio), any Notes (or, if
applicable, the Applicable Ownership Interest in the Treasury Portfolio)
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; (b) in payments made by Holders pursuant to
Section 4.4; (c) in the Collateral Account and all securities, financial assets,
Cash and other property credited thereto and all Security Entitlements related
thereto; (d) in the Treasury Portfolio purchased on behalf of the Holders of
Income PRIDES 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 (e) all Proceeds of the foregoing (all of the foregoing,
collectively, the "Collateral").
Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Securities, shall cause the Notes comprising a part of the Income PRIDES 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 Income
PRIDES so elects, such Holder may Transfer Treasury Securities to the Collateral
Agent for the benefit of the Company as provided in Section 4.1 hereof in
exchange for the release by the Collateral Agent on behalf of the Company of
Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, with an aggregate principal amount equal to the
aggregate principal amount of the Treasury Securities so Transferred, in the
case of Notes, or with an appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio equal to the aggregate principal amount of the Treasury Securities so
transferred, in the event that a Successful Initial Remarketing or a Tax Event
Redemption has occurred, to the Purchase Contract Agent on behalf of such
Holder. In the event that a Holder of Growth PRIDES so elects, such Holder may
Transfer Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio 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 or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio so transferred to the Purchase Contract
Agent on behalf of such Holder. Treasury Securities and the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as applicable, shall be
Transferred to the Collateral Account maintained by the Collateral Agent at the
Securities Intermediary by book-entry transfer to the Collateral Account in
accordance with the TRADES Regulations and other applicable law and by the
notation by the Securities Intermediary on its books that a Security Entitlement
with respect to such Treasury Securities or appropriate Applicable Ownership
Interest of the Treasury Portfolio, has been credited to the Collateral Account.
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(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 2.1 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 6.2 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 2.2 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 an Income PRIDES to a Growth
PRIDES, 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 fifteen 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 2.2 Control and Perfection. (a) In connection with the Pledge
granted in Section 2.1, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, 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
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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 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item of
property (whether investment property, financial asset, security, instrument or
cash) credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or any
portion 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 2.1. The grant of such power-
of-attorney shall not be deemed to require of the Collateral Agent any specific
duties or obligations not otherwise assumed by the Collateral Agent hereunder.
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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:
(i) in the case of (A) 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 (B) 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 4.1 or
4.3 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);
(ii) in the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to Section
4.2 or 4.3 hereof, to the Purchase Contract Agent, for the benefit of the
Holders of the Growth PRIDES, 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
(iii) 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 4.6(a) or 4.6(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.
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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 4.1 Substitution for Notes and the Creation of Growth PRIDES.
At any time on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date (or on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, if a Tax Event
Redemption or a Successful Initial Remarketing has occurred), a Holder of Income
PRIDES shall have the right to substitute Treasury Securities for the Pledged
Notes (or, if a Tax Event Redemption or a Successful Initial Remarketing has
occurred, the appropriate Applicable Ownership Interest in the Treasury
Portfolio) securing such Holder's obligations under the Purchase Contract(s)
comprising a part of its Income PRIDES in integral multiples of 20 Income PRIDES
by (a) Transferring to the Collateral Agent Treasury Securities having a Value
equal to the aggregate principal amount of the Pledged Notes (or appropriate
Applicable Ownership Interest (as defined in clause (A) of the definition of
such term) in the Treasury Portfolio as the case may be), to be released and
transferring the related Income PRIDES 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 or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, related to
such Income PRIDES. The Purchase Contract Agent shall instruct the Collateral
Agent in the form provided in Exhibit A; provided, however, that if a Tax Event
Redemption or a Successful Initial Remarketing has occurred and the Treasury
Portfolio has become a component of the Income PRIDES, Holders of Income PRIDES
may make such substitution only in integral multiples of 32,000 Income PRIDES at
any time on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date. Upon receipt of Treasury Securities from a
Holder of Income PRIDES and the related instruction from the Purchase Contract
Agent, the Collateral Agent shall release the Pledged Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, and
shall promptly Transfer to the securities account specified by the Purchase
Contract Agent such Pledged Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, free and clear of any
lien, pledge or security interest created hereby. All items
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Transferred and/or substituted by any Holder pursuant to this Section 4.1,
Section 4.2 or any other Section of this Agreement shall be Transferred and/or
substituted free and clear of all liens, claims and encumbrances.
Section 4.2 Substitution of Treasury Securities and the Recreation of
Income PRIDES. At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (or on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date, if a
Tax Event Redemption or a Successful Initial Remarketing has occurred), a Holder
of Growth PRIDES shall have the right to recreate Income PRIDES in integral
multiples of 20 Growth PRIDES by (a) Transferring to the Collateral Agent Notes
having a Value equal to the Value of the Pledged Treasury Securities to be
released (or the appropriate Applicable Ownership Interest of the Treasury
Portfolio with the Applicable Ownership Interest (as defined in clause (A) of
the definition of such term) having Value equal to the Value of the Pledged
Treasury Securities to be released) and (b) delivering the related Growth PRIDES
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 (or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be) 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 Growth PRIDES. The Purchase
Contract Agent shall instruct the Collateral Agent in the form provided in
Exhibit A; provided, however, that if a Tax Event Redemption or a Successful
Initial Remarketing has occurred and the Treasury Portfolio has become a
component of the Income PRIDES, Holders of Growth PRIDES may make such
substitution only in integral multiples of 32,000 Growth PRIDES, at any time on
or prior to the second Business Day immediately preceding the Purchase Contract
Settlement Date. Upon receipt of the Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, from such
Holder and the instruction from the Purchase Contract Agent, the Collateral
Agent shall release the Treasury Securities having a corresponding aggregate
principal amount 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 4.3 Termination Event. Upon receipt by the Collateral Agent
of written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall promptly Transfer any Pledged 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 Income PRIDES
and the Growth PRIDES, 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 4.3, the Purchase Contract Agent shall (i)
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
12
being the debtor in such a bankruptcy case, the Collateral Agent will not be
prohibited from releasing or Transferring the Collateral as provided in this
Section 4.3, and shall deliver such opinion to the Collateral Agent within ten
days after the occurrence of such Termination Event, and if (y) the Purchase
Contract Agent shall be unable to obtain such opinion within ten days after the
occurrence of such Termination Event or (z) the Collateral Agent shall continue,
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 4.3, then the Purchase Contract
Agent shall within fifteen 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 4.3 or (ii) commence an action or proceeding like that described
in subsection (i)(z) hereof within ten days after the occurrence of such
Termination Event.
Section 4.4 Cash Settlement. (a) Upon receipt by the Collateral Agent
of (i) a notice from the Purchase Contract Agent promptly after the receipt by
the Purchase Contract Agent of such notice that a Holder of an Income PRIDES has
elected, in accordance with the procedures specified in Section 5.4(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
on or prior to 11:00 a.m., New York City time, on the Business Day immediately
preceding the Purchase Contract Settlement Date in lawful money of the United
States by certified or cashiers' check or wire transfer in immediately available
funds payable to or upon the order of the Company, then the Collateral Agent
shall, 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 an Income PRIDES (unless a Tax Event Redemption or
a Successful Initial Remarketing has occurred) fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
Section 5.4(a)(i) of the Purchase Contract Agreement, such failure shall
constitute 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 5.4(b)
of the Purchase Contract Agreement, which is incorporated herein by reference.
If a Holder of an Income PRIDES does notify the Purchase Contract Agent as
provided in Section 5.4(a)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by Section 5.4(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 5.4(b) of the Purchase
Contract Agreement, such Failed Secondary Remarketing shall constitute an
additional
13
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 4.5 Early Settlement. 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 or the appropriate Applicable
Ownership Interest of the Treasury Portfolio in the case of a Holder of Income
PRIDES or (b) Pledged Treasury Securities in the case of a Holder of Growth
PRIDES, 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, 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 4.6 Application of Proceeds; Settlement. (a) In the event a
Holder of Income PRIDES (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 5.5(a)(i) in the Purchase Contract
Agreement and has not made an Early Settlement of the Purchase Contracts
underlying its Income PRIDES, 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
Income PRIDES, 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 reasonable efforts to remarket such Pledged Notes on
such date at a price of approximately 100.5% (but not less than 100%) of the
aggregate Value of such Pledged Notes. 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 Income PRIDES 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
14
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 Income PRIDES 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 Growth PRIDES or Income PRIDES (if a Tax
Event Redemption or a Successful Initial Remarketing has occurred) has not made
an Early Settlement of the Purchase Contracts underlying its Growth PRIDES or
Income PRIDES, 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 Growth PRIDES or Income PRIDES, 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 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.
15
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
4.6(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 6.1 Rights and Remedies of the Collateral Agent. (a) In
addition to the rights and remedies specified in Section 4.4 hereof or otherwise
available at law or in equity, after an event of default hereunder, the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
"Code") (whether or not, 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
16
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 3 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 3, 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 willful misconduct.
Section 6.2 Tax Event Redemption. Upon the occurrence of a Tax Event
Redemption 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 Income PRIDES. The
17
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account
to secure the obligation of all Holders of Income PRIDES to purchase Common
Stock of the Company under the Purchase Contracts constituting a part of such
Income PRIDES, 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 6.3 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 Income PRIDES, present the
related Pledged Notes to the Remarketing Agent for remarketing. Upon receiving
such Pledged Notes, the Remarketing Agent, pursuant to the terms of the
Remarketing Agreement, will use its reasonable efforts to remarket such Pledged
Notes on such date at a price of approximately 100.5% (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 Income PRIDES. The Collateral Agent shall Transfer the Treasury
Portfolio to the Collateral Account to secure the obligation of all Holders of
Income PRIDES to purchase Common Stock of the Company under the Purchase
Contracts constituting a part of such Income PRIDES, 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 6.4 Substitutions. Whenever a Holder has the right to
substitute Treasury Securities, Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, for Collateral held by
the Collateral Agent, such substitution shall not constitute a novation of the
security interest created hereby.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 7.1 Representations and Warranties. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on
18
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 2
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 2.2 hereof); and
(d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security interest,
lien or other encumbrance on the Collateral other than the security interest and
lien granted under Article 2 hereof or violate any provision of any existing law
or regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.
Section 7.2 Covenants. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will create
or purport to create or allow to subsist any mortgage, charge, lien, pledge or
any other security interest whatsoever over the Collateral or any part of it
other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the pledge hereunder,
transferred in connection with the Transfer of the Securities.
19
ARTICLE VIII
THE COLLATERAL AGENT
It is hereby agreed as follows:
Section 8.1 Appointment, Powers and Immunities. The Collateral Agent
shall act as Agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. Each of
the Collateral Agent, the Custodial Agent and the Securities Intermediary: (a)
shall have no duties or responsibilities except those expressly set forth in
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 8.2
hereof, subject to Section 8.6 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 willful 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 8.2 Instructions of the Company. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, to direct the time, method and place of conducting any proceeding
for the realization of any right or remedy available to the Collateral Agent, or
of exercising any power conferred on the Collateral Agent, the Custodial Agent
or the
20
Securities Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this Agreement; provided,
however, that (i) such direction shall not conflict with the provisions of any
law or of this Agreement and (ii) the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall be adequately indemnified as provided herein.
Nothing in this Section 8.2 shall impair the right of the Collateral
Agent in its discretion to take any action or omit to take any action which it
deems proper and which is not inconsistent with such direction.
Section 8.3 Reliance. 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 8.4 Rights in other Capacities. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, 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 or the books and records of the Collateral Agent and not commingled
with any other assets of any such Person.
Section 8.5 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
21
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 8.6 Compensation and Indemnity. The Company agrees: (i) to
pay each of the Collateral Agent and the Custodial Agent from time to time such
compensation as shall be agreed in writing between the Company and the
Collateral Agent or the Custodial Agent, as the case may be, for all services
rendered by each of them hereunder and (ii) to indemnify the Collateral Agent,
the Custodial Agent and the Securities Intermediary for, and to hold each of
them harmless from and against, any loss, liability or reasonable out-of-pocket
expense incurred without negligence, willful misconduct or bad faith on its
part, arising out of or in connection with the acceptance or administration of
its powers and duties under this Agreement, including the reasonable out-of-
pocket costs and expenses (including reasonable fees and expenses of counsel) of
defending itself against any claim or liability in connection with the exercise
or performance of such powers and duties. The Collateral Agent, the Custodial
Agent and the Securities Intermediary shall each promptly notify the Company of
any third party claim which may give rise to 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 8.7 Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent and the Custodial Agent shall
be entitled, after prompt notice to the Company and the Purchase Contract Agent,
at its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and neither the Collateral Agent nor the Custodial
Agent shall be or become liable in any way to any of the parties hereto for its
failure or refusal to comply with such conflicting claims, demands or
instructions. The Collateral Agent and the Custodial Agent shall be entitled to
refuse to act until either (i) such conflicting or adverse claims or demands
shall have been finally determined by a court of competent jurisdiction or
settled by agreement between the conflicting parties as evidenced in a writing,
satisfactory to the Collateral Agent or the Custodial Agent, as the case may be,
or (ii) the Collateral Agent or the Custodial Agent, as the case may be, shall
have received security or an indemnity 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, willful 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.
22
Section 8.8 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 8 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Collateral Agent or Custodial Agent. Any resignation or removal of the
Collateral Agent hereunder shall be deemed for all purposes of this Agreement as
the simultaneous resignation or removal of the Custodial Agent and the
Securities Intermediary.
Section 8.9 Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
Section 8.10 Survival. The provisions of this Article 8 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
23
any third party for indirect, special, punitive, or consequential loss or damage
of any kind whatsoever, including lost profits, whether or not the likelihood of
such loss or damage was known to the Collateral Agent, the Custodial Agent or
the Securities Intermediary, or any of them, incurred without any act or deed
that is found to be attributable to gross negligence or willful misconduct on
the part of the Collateral Agent, the Custodial Agent or the Securities
Intermediary.
ARTICLE IX
AMENDMENT
Section 9.1 Amendment Without Consent of Holders. Without the consent
of any Holders or the holders of any Separate 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; or
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company so
long as such covenants or such surrender do not adversely affect the validity,
perfection or priority of the security interests granted or created hereunder;
or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or Purchase
Contract Agent; or
(d) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other such provisions herein, or to
make any other provisions with respect to such matters or questions arising
under this Agreement, provided such action shall not adversely affect the
interests of the Holders.
Section 9.2 Amendment with Consent of Holders. With the consent of
the Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, 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 Income PRIDES to substitute the
Treasury Securities for the Pledged Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, or the
rights of Holders of Growth PRIDES to substitute Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as
24
applicable, for the Pledged Treasury Securities), impair the right of the
Holder of any Security to receive distributions on the underlying
Collateral or otherwise adversely affect the Holder's rights in or to such
Collateral; or
(b) otherwise effect any action that would require the consent of the
Holder of each Outstanding Security affected thereby pursuant to the
Purchase Contract Agreement if such action were effected by 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
Income PRIDES or the Growth PRIDES, 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 9 to approve the particular form of any proposed amendment, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 9.3 Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 8.1 hereof, with respect to the Collateral
Agent, and Section 7.1 of the Purchase Contract Agreement, with respect to the
Purchase Contract Agent) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and that all conditions precedent, if any, to the execution
and delivery of such amendment have been satisfied. All amendments must be in
writing, signed by all parties to this Agreement.
Section 9.4 Effect of Amendments. Upon the execution of any amendment
under this Article 9, 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 9.5 Reference to Amendments. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Article 9 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.
25
ARTICLE X
MISCELLANEOUS
Section 10.1 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 10.2 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without
limiting the foregoing, the above 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 10.3 Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
Section 10.4 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.
26
Section 10.5 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 10.6 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be construed in order to carry out the intentions of the
parties hereto as nearly as may be possible and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
Section 10.7 Expenses, etc. The Company agrees to reimburse the
Collateral Agent and the Custodial Agent for: (a) all reasonable out-of-pocket
costs and expenses of the Collateral Agent and the Custodial Agent (including,
without limitation, the reasonable fees and expenses of counsel to the
Collateral Agent and the Custodial Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
Section 10.8 Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the obligations
of Holders of Securities under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
ELECTRONIC DATA SYSTEMS CORPORATION
By:
-------------------------------
Name:
Title:
Address for Notices:
Electronic Data Systems Corporation
0000 Xxxxxx Xxxxx
Xxxxx, Xxxxx 00000-0000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
The Chase Manhattan Bank,
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:
-------------
28
First Union Trust Company, National
Association,
as Collateral Agent, Custodial Agent
and as Securities Intermediary
By:
--------------------------------
Name:
Title:
Address for Notices:
(
----------------------------
----------------------------
)
----------------------------
Attention: (Corporate Trust
Administration)
Telecopy:
-------------------
29
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
First Union Trust Company, National Association
Re: Electronic Data Systems Corporation (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of June__, 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 [INCOME PRIDES] [GROWTH PRIDES] 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 or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] in exchange for an equal Value of [Pledged Notes
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be,] [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 or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] to you, as
Collateral Agent. We hereby instruct you, upon receipt of such [Pledged
Treasury Securities] [Pledged Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,], and upon the payment
by such Holder of any applicable fees, to release the [Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,]
[Treasury Securities] related to such [Income PRIDES] [Growth PRIDES] 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 Chase Manhattan Bank
-------------- By:
----------------------------------
Name:
Title:
Signature Guarantee:
-----------------
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Notes or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be,] for the [Pledged Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] [Pledged Treasury Securities]:
-------------------------- -------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
--------------------------
Address
--------------------------
--------------------------
30
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Chase Manhattan Bank
Re: FELINE PRIDES of Electronic Data Systems Corporation (the
"Company")
The undersigned Holder hereby notifies you that it has delivered to
[First Union Trust Company, National Association], as Collateral Agent,
[$_______ aggregate principal amount of Treasury Securities] [$_____aggregate
principal amount of Notes or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, the case may be,] in exchange for an equal Value of
[Pledged Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities] held by the
Collateral Agent, in accordance with Section [4.1][4.2] of the Pledge Agreement,
dated June__, 2001 (the "Pledge Agreement"), among 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 or the appropriate Applicable
Ownership Interest of the Treasury Portfolio] [Pledged Treasury Securities]
related to such [Income PRIDES] [Growth PRIDES]. Capitalized terms used herein
but not defined shall have the meaning set forth in the Pledge Agreement.
Dated:
--------------------- -------------------------------------
Signature
Signature Guarantee:
-----------------
Please print name and address of Registered Holder:
--------------------------- -------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
---------------------------
Address
---------------------------
---------------------------
31
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
First Union Trust Company, National Association
Re: Notes of Electronic Data Systems Corporation (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of June__, 2001 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and The Chase Manhattan Bank, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Income PRIDES and Growth PRIDES 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 4.6(c) of the Pledge Agreement. The
undersigned will, upon request of the Remarketing Agent, execute and deliver any
additional documents deemed by the Remarketing Agent or by the Company to be
necessary or desirable to complete the sale, assignment and transfer of the
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
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 (i) 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 (ii) agrees to be
bound by the terms and conditions of Section 4.6(c) of the Pledge Agreement.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date:
--------------------- -------------------------------------
By:
----------------------------------
Name:
Title:
Signature Guarantee:
-----------------
-------------------------- -------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
--------------------------
32
Address
--------------------------
--------------------------
33
-------------------------------------------------------------------------------
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)
34
-------------------------------------------------------------------------------
(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:
----------------------------------
35
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
First Union Trust Company, National Association
Re: Notes of Electronic Data Systems Corporation (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of __, 2001 (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, Securities Intermediary and Custodial
Agent and The Chase Manhattan Bank, as Purchase Contract Agent and as attorney-
in-fact for the Holders of Income PRIDES and Growth PRIDES 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 4.6(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 4.6(c) of the Pledge Agreement. Capitalized
terms used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Date:
---------------- -------------------------------------
By:
---------------------------------
Name:
Title:
Signature Guarantee:
-----------------
--------------------------- -------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
---------------------------
Address
---------------------------
---------------------------
36
