Exhibit 4.4
KEYSPAN CORPORATION
and
The Bank of New York, as Collateral Agent, Custodial Agent and Securities
Intermediary
and
JPMorgan Chase Bank, as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of May 6, 2002
TABLE OF CONTENTS
----------------------
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions...........................................3
ARTICLE 2
PLEDGE
SECTION 2.01. Pledge................................................8
SECTION 2.02. Control; Financing Statement..........................8
SECTION 2.03. Termination...........................................8
ARTICLE 3
DISTRIBUTIONS ON PLEDGED COLLATERAL
SECTION 3.01. Income Distributions..................................9
SECTION 3.02. Principal Payments Following Termination Event........9
SECTION 3.03. Principal Payments Prior to or on Purchase Contract
Settlement Date.....................................9
SECTION 3.04. Payments to Purchase Contract Agent..................10
SECTION 3.05. Assets Not Properly Released.........................10
ARTICLE 4
CONTROL
SECTION 4.01. Establishment of Collateral Account..................11
SECTION 4.02. Treatment as Financial Assets........................11
SECTION 4.03. Sole Control by Collateral Agent.....................11
SECTION 4.04. Securities Intermediary's Location...................11
SECTION 4.05. No Other Claims......................................12
SECTION 4.06. Investment and Release...............................12
SECTION 4.07. Statements and Confirmations.........................12
SECTION 4.08. Tax Allocations......................................12
SECTION 4.09. No Other Agreements..................................12
SECTION 4.10. Powers Coupled with an Interest......................12
ARTICLE 5
INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY MEDS AND
REESTABLISHMENT OF CORPORATE MEDS
SECTION 5.01. Initial Deposit of Notes.............................13
SECTION 5.02. Establishment of Treasury MEDS.......................13
SECTION 5.03. Reestablishment of Corporate MEDS....................14
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PAGE
SECTION 5.04. Termination Event....................................15
SECTION 5.05. Cash Settlement......................................17
SECTION 5.06. Early Settlement and Cash Merger Early Settlement....18
SECTION 5.07. Application of Proceeds in Settlement of Purchase
Contracts...........................................19
SECTION 5.08. Tax Event Redemption.................................21
ARTICLE 6
VOTING RIGHTS - PLEDGED NOTES
SECTION 6.01. Voting Rights........................................22
ARTICLE 7
RIGHTS AND REMEDIES
SECTION 7.01. Rights and Remedies of the Collateral Agent..........23
SECTION 7.02. Tax Event Redemption.................................24
SECTION 7.03. Initial Remarketing..................................24
SECTION 7.04. Interim Remarketing..................................25
SECTION 7.05. Substitutions........................................26
ARTICLE 8
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 8.01. Representations and Warranties.......................26
SECTION 8.02. Covenants............................................27
ARTICLE 9
THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES
INTERMEDIARY
SECTION 9.01. Appointment, Powers and Immunities...................28
SECTION 9.02. Instructions of the Company..........................29
SECTION 9.03. Reliance by Collateral Agent and Securities
Intermediary........................................29
SECTION 9.04. Rights in Other Capacities...........................29
SECTION 9.05. Non-Reliance on Collateral Agent, the Custodial
Agent and Securities Intermediary...................30
SECTION 9.06. Compensation and Indemnity...........................30
SECTION 9.07. Failure to Act.......................................31
SECTION 9.08. Resignation of Collateral Agent, the Custodial
Agent and Securities Intermediary...................32
SECTION 9.09. Right to Appoint Agent or Advisor....................33
SECTION 9.10. Survival.............................................33
SECTION 9.11. Exculpation..........................................33
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PAGE
ARTICLE 10
AMENDMENT
SECTION 10.01. Amendment Without Consent of Holders................34
SECTION 10.02. Amendment with Consent of Holders...................34
SECTION 10.03. Execution of Amendments.............................35
SECTION 10.04. Effect of Amendments................................36
SECTION 10.05. Reference of Amendments.............................36
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. No Waiver...........................................36
SECTION 11.02. Governing Law; Submission to Jurisdiction...........36
SECTION 11.03. Notices.............................................37
SECTION 11.04. Successors and Assigns..............................37
SECTION 11.05. Counterparts........................................37
SECTION 11.06. Severability........................................37
SECTION 11.07. Expenses, Etc.......................................38
SECTION 11.08. Security Interest Absolute..........................38
SECTION 11.09. Notice of Tax Event, Tax Event Redemption and
Termination Event..................................39
Exhibit A - Instruction from Purchase Contract Agent to Collateral Agent
(Establishment of Treasury MEDS)
Exhibit B - Instruction from Collateral Agent to Securities Intermediary
(Establishment of Treasury MEDS)
Exhibit C - Instruction from Purchase Contract Agent to Collateral Agent
(Reestablishment of Corporate MEDS)
Exhibit D - Instruction from Collateral Agent to Securities Intermediary
(Reestablishment of Corporate MEDS)
Exhibit E - Notice of Cash Settlement from Securities Intermediary to
Purchase Contract Agent (Cash Settlement Amounts)
Exhibit F - Instruction to Custodial Agent
(Regarding Remarketing)
Exhibit G - Instruction to Custodial Agent
(Withdrawal from Remarketing)
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of May 6, 2002, among KEYSPAN CORPORATION,
a New York corporation (the "Company"), THE BANK OF NEW YORK, a New York
banking corporation, 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 with respect
to the Collateral Account (in such capacity, together with its successors in
such capacity, the "Securities Intermediary"), and JPMORGAN CHASE BANK, a New
York banking corporation, as purchase contract agent and as attorney-in-fact
of the Holders from time to time of the Securities (as defined in the Purchase
Contract Agreement) (in such capacity, together with its successors in such
capacity, the "Purchase Contract Agent") under the Purchase Contract
Agreement.
RECITALS
The Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which 8,000,000 Corporate MEDS (as defined herein)
will be issued (9,200,000 Corporate MEDS if the over-allotment option granted
in the Underwriting Agreement (as defined herein) is exercised in full).
Each Corporate MEDS, at issuance, consists of a unit comprised of (a)
a stock purchase contract (a "Purchase Contract") under which the Holder will
purchase from the Company on the Purchase Contract Settlement Date, for an
amount equal to $50 (the "Stated Amount"), a number of shares of the Company's
common stock, par value $0.01 per share ("Common Stock"), equal to the
Settlement Rate and (b) either beneficial ownership of a Note (as defined
below) or an Applicable Ownership Interest in the Treasury Portfolio (as
defined below).
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders of the Securities have irrevocably authorized
the Purchase Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such Holders and to
grant the pledge provided herein of the Collateral (as defined herein) to
secure the Obligations (as defined herein).
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own
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behalf and as attorney-in-fact of the Holders from time to time of the
Securities, agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. 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, Exhibit or other subdivision;
(c) the following terms which are defined in the UCC shall have the
meanings set forth therein: "certificated security," "control," "financial
asset," "entitlement order," "securities account" and "security entitlement";
(d) the following terms have the meanings assigned to them in the
Purchase Contract Agreement: "Act", "Affiliate", "Applicable Ownership
Interest", "Bankruptcy Code", "Board Resolution", "Business Day", "Cash
Merger", "Cash Merger Early Settlement", "Cash Merger Early Settlement Date",
"Cash Settlement", "Certificate", "Early Settlement", "Early Settlement Date",
"Failed Initial Remarketing", "Failed Final Remarketing", "Final
Remarketing","Holder","Initial Remarketing", "Initial Remarketing Date",
"Interim Remarketing", "Interim Remarketing Date"," Notes", "Officers'
Certificate", "Opinion of Counsel", "Outstanding Securities", "Purchase
Contract", "Purchase Contract Settlement Date", "Purchase Price", "Quotation
Agent", "Redemption Amount", "Remarketing Agent", "Remarketing Agreement",
"Remarketing Fee", "Security", "Separate Notes Purchase Price", "Settlement
Rate", "Successful Initial Remarketing", "Successful Interim Remarketing",
"Tax Event", "Tax Event Redemption", "Tax Event Redemption Date", "Termination
Event", "Treasury Portfolio", "Treasury Portfolio Purchase Price" and
"Underwriting Agreement"; and
(e) the following terms have the meanings given to them in this
Section 1.01(e):
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"Agreement" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Collateral" means the collective reference to:
(i) all investment property and other financial assets from
time to time credited to the Collateral Account, including, without
limitation, (A) the Notes and security entitlements relating thereto
that are a component of the Corporate MEDS from time to time, (B) the
Applicable Ownership Interests (as specified in Clause (i) of the
definition of such term) of the Holders with respect to the Treasury
Portfolio which are a component of the Corporate MEDS from time to
time; (C) any Treasury Securities and security entitlements relating
thereto delivered from time to time upon establishment of Treasury
MEDS in accordance with Section 5.02 hereof and (E) payments made by
Holders pursuant to Section 5.05 hereof;
(ii) all Proceeds of any of the foregoing (whether such Proceeds
arise before or after the commencement of any proceeding under any
applicable bankruptcy, insolvency or other similar law, by or against
the pledgor or with respect to the pledgor); and
(iii) all powers and rights now owned or hereafter acquired
under or with respect to the Collateral.
"Collateral Account" means the securities account of The Bank of New
York, as Collateral Agent, maintained by the Securities Intermediary and
designated "The Bank of New York, as Collateral Agent of KeySpan Corporation,
as pledgee of JPMorgan Chase Bank, as the Purchase Contract Agent on behalf of
and as attorney-in-fact for the Holders".
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provisions of the Purchase Contract Agreement, and
thereafter "Company" shall mean such successor.
"Corporate MEDS" means the collective rights and obligations of a
Holder of a Corporate MEDS Certificate in respect of a Note or an appropriate
Applicable Ownership Interests of the Treasury Portfolio, as the case may be,
subject in each case to the Pledge thereof, and the related Purchase Contract;
4
provided that the appropriate Applicable Ownership Interests (as specified in
clause (ii) of the definition of such term) of the Treasury Portfolio shall
not be subject to the Pledge.
"Corporate MEDS Certificate " means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Corporate MEDS
specified on such certificate.
"Obligations" means, with respect to each Holder, the collective
reference to all obligations and liabilities of such Holder under such
Holder's Purchase Contract, the Purchase Contract Agreement and this Agreement
or any other document made, delivered or given in connection herewith or
therewith, in each case whether on account of principal, interest (including,
without limitation, interest accruing before and after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to such Holder, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Company or the Collateral Agent or
the Securities Intermediary that are required to be paid by the Holder
pursuant to the terms of any of the foregoing agreements).
"Permitted Investments" means any one of the following which shall
mature not later than the next succeeding Business Day:
(1) any evidence of indebtedness with an original maturity of
365 days or less issued, or directly and fully guaranteed or insured,
by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States
of America is pledged in support of the timely payment thereof or such
indebtedness constitutes a general obligation of it);
(2) deposits, certificates of deposit or acceptances with an
original maturity of 365 days or less of any institution which is a
member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $200.0 million at the
time of deposit (and which may include the Collateral Agent);
(3) investments with an original maturity of 365 days or less
of any Person that is fully and unconditionally guaranteed by a bank
referred to in clause (2);
5
(4) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or unconditionally
guaranteed by the United States of America or issued by any agency
thereof and backed as to timely payment by the full faith and credit
of the United States of America;
(5) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation
incorporated under the laws of the United States or any State
thereof, which commercial paper has a rating at the time of purchase
at least equal to "A-1" by Standard & Poor's Ratings Services ("S&P")
or at least equal to "P-1" by Xxxxx'x Investors Service, Inc.
("Moody's"); and
(6) investments in money market funds (including, but not
limited to, money market funds managed by the Collateral Agent or an
affiliate of the Collateral Agent) registered under the Investment
Company Act of 1940, as amended, rated in the highest applicable
rating category by S&P or Moody's.
"Person" means any legal person, including, without limitation, any
individual, corporation, estate, partnership, joint venture, association,
joint-stock company, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Pledge" means the lien and security interest created by this
Agreement.
"Pledged Applicable Ownership Interests" means the Applicable
Ownership Interests (as specified in clause (i) of the definition thereof) of
the Holders with respect to the Treasury Portfolio from time to time credited
to the Collateral Account and not then released from the Pledge.
"Pledged Notes" means Notes and security entitlements with respect
thereto from time to time credited to the Collateral Account and not then
released from the Pledge.
"Pledged Securities" means the Pledged Notes, the Pledged Applicable
Ownership Interests or the Pledged Treasury Securities, collectively.
"Pledged Treasury Securities" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.
6
"Proceeds" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, cash, instruments, securities,
financial assets (as defined in ss.8-102(a)(9) of the UCC) and other property
received, receivable or otherwise distributed upon the sale, exchange,
collection or disposition of any financial assets from time to time held in
the Collateral Account.
"Purchase Contract Agent" has the meaning specified in the paragraph
preceding the recitals of this Agreement.
"Separate Notes" means Notes which are not components of Corporate
MEDS.
"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 in the case of certificated securities in registered
form, delivery as provided in ss.8-301(a) of the UCC, indorsed to the
transferee or in blank by an effective endorsement; in the case of Treasury
Securities, registration of the transferee as the owner of such Treasury
Securities on TRADES; and in the case of security entitlements, including,
without limitation, security entitlements with respect to Treasury Securities,
a securities intermediary indicating by book entry that such security
entitlement has been credited to the transferee's securities account.
"Treasury MEDS" means, following the substitution of Treasury
Securities for Notes as collateral to secure a Holder's obligations under the
Purchase Contract, the collective rights and obligations of a Holder of a
Treasury MEDS Certificate in respect of such Treasury Securities, subject to
the Pledge thereof, and the related Purchase Contract.
"Treasury MEDS Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Treasury MEDS
specified on such certificate.
"Treasury Securities" means zero-coupon U.S. treasury securities
(CUSIP No. 912803ADS) which mature on May 15, 2005.
7
"UCC" means the Uniform Commercial Code as in effect in the State of
New York from time to time.
"Value" means, with respect to any item of Collateral on any date, as
to (1) Cash, the face amount thereof, (2) Treasury Securities or Notes, the
aggregate principal amount thereof at maturity and (3) Applicable Ownership
Interests (as specified in clause (i) of the definition of such term), the
appropriate percentage of the aggregate principal amount at maturity of the
Treasury Portfolio.
ARTICLE 2
PLEDGE
SECTION 2.01. Pledge. Each Holder, acting through the Purchase
Contract Agent as such Holder's attorney-in-fact, and the Purchase Contract
Agent, acting solely as such attorney-in-fact, hereby pledges and grants to
the Collateral Agent, as agent of and for the benefit of the Company, a
continuing first priority security interest in and to, and a lien upon and
right of set-off against, all of such Person's right, title and interest in
and to the Collateral to secure the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or
otherwise) of the Obligations. The Collateral Agent shall have all of the
rights, remedies and recourses with respect to the Collateral afforded a
secured party by the UCC, in addition to, and not in limitation of, the other
rights, remedies and recourses afforded to the Collateral Agent by this
Agreement.
SECTION 2.02. Control; Financing Statement.
(a) The Collateral Agent shall have control of the Collateral
Account pursuant to the provisions of Article 4 of this Agreement.
(b) Subsequent to the date of initial issuance of the Securities,
the Purchase Contract Agent shall deliver to the Collateral Agent a copy of
the financing statement prepared by the Company and filed in the Office of the
Secretary of State of the State of New York and any other jurisdictions which
the Company deems necessary, authorized by the Purchase Contract Agent, as
attorney-in-fact for the Holders, as Debtors, and describing the Collateral,
such filing to be undertaken by the Company.
SECTION 2.03. Termination. As to each Holder, this Agreement and the
Pledge created hereby shall terminate upon the satisfaction of such Holder's
Obligations. Upon such termination, the Collateral Agent shall Transfer such
8
Holder's portion of the Collateral to the Purchase Contract Agent for
distribution to such Holder in accordance with its interest, free and clear of
any lien, pledge or security interest created hereby.
ARTICLE 3
DISTRIBUTIONS ON PLEDGED COLLATERAL
SECTION 3.01. Income Distributions. All income distributions received
by the Collateral Agent on account of the Pledged Notes, the Pledged
Applicable Ownership Interests or Permitted Investments from time to time held
in the Collateral Account shall be distributed to the Purchase Contract Agent
(ABA No. 000000000, A/C No. 10202063.1, Re: KeySpan Corporation) for the
benefit of the applicable Holders as provided in the Purchase Contracts or
Purchase Contract Agreement.
SECTION 3.02. Principal Payments Following Termination Event. All
payments received by the Collateral Agent following a Termination Event of (1)
the aggregate principal amount of the Pledged Notes or securities entitlements
thereto, or (2) the Pledged Applicable Ownership Interests, or (3) the
principal amount of the Pledged Treasury Securities, shall be distributed to
the Purchase Contract Agent for the benefit of the applicable Holders for
distribution to such Holders in accordance with their respective interests.
SECTION 3.03. Principal Payments Prior to or on Purchase Contract
Settlement Date.
(a) Subject to the provisions of Sections 5.06, 5.08 and 7.03, and
except as provided in clause 3.03(b) below, if no Termination Event shall have
occurred, all payments received by the Collateral Agent of (1) the aggregate
principal amount with respect to the Pledged Notes or security entitlements
with respect thereto, (2) the Pledged Applicable Ownership Interests or (3)
the principal amount of Pledged Treasury Securities, shall be held and
invested in Permitted Investments until the Purchase Contract Settlement Date
and on the Purchase Contract Settlement Date distributed to the Company as
provided in Section 5.07 hereof. Any balance remaining in the Collateral
Account shall be distributed to the Purchase Contract Agent for the benefit of
the applicable Holders for distribution to such Holders in accordance with
their respective interests. The Company shall instruct the Collateral Agent in
writing as to the type of Permitted Investments in which any payments made
under this Section shall be invested, provided, however, that if the Company
fails to deliver such instructions by 10:30 a.m. (New York City time) on the
day such payments are received by the Collateral
9
Agent, the Collateral Agent shall invest such payments in the Permitted
Investments described in clause (6) of the definition of Permitted
Investments.
(b) All payments received by the Collateral Agent of (1) the
aggregate principal amount with respect to the Pledged Notes or security
entitlements with respect thereto, (2) the Applicable Ownership Interests (as
specified in clause (i) of the definition thereof) of the Treasury Portfolio,
or (3) the principal amount of Treasury Securities or security entitlements
with respect thereto, that, in each case, have been released from the Pledge
shall be distributed to the Purchase Contract Agent for the benefit of the
applicable Holders for distribution to such Holders in accordance with their
respective interests.
SECTION 3.04. Payments to Purchase Contract Agent. The Collateral
Agent shall use all commercially reasonable efforts to deliver payments to the
Purchase Contract Agent hereunder to the account designated by the Purchase
Contract Agent for such purpose not later than 12:00 p.m. (New York City time)
on the Business Day such payment is received by the Collateral Agent;
provided, however, that if such payment is received on a day that is not a
Business Day or after 11:00 a.m. (New York City time) on a Business Day, then
the Collateral Agent shall use all commercially reasonable efforts to deliver
such payment to the Purchase Contract Agent no later than 10:30 a.m. (New York
City time) on the next succeeding Business Day.
SECTION 3.05. Assets Not Properly Released. If the Purchase Contract
Agent or any Holder shall receive any principal payments on account of
financial assets credited to the Collateral Account and not released therefrom
in accordance with this Agreement, the Purchase Contract Agent or such Holder
shall hold the same as trustee of an express trust for the benefit of the
Company and, upon receipt of an Officers' Certificate of the Company so
directing, promptly deliver the same to the Collateral Agent for credit to the
Collateral Account or to the Company for application to the Obligations of the
Holders, and the Purchase Contract Agent and Holders shall acquire no right,
title or interest in any such payments of principal amounts so received. The
Purchase Contract Agent shall have no liability under this Section 3.05 unless
and until it has been notified in writing that such payment was delivered to
it erroneously and shall have no liability for any action taken, suffered or
omitted to be taken prior to its receipt of such notice.
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ARTICLE 4
CONTROL
SECTION 4.01. Establishment of Collateral Account. The Securities
Intermediary hereby confirms that:
(a) the Securities Intermediary has established the Collateral
Account;
(b) the Collateral Account is a securities account;
(c) subject to the terms of this Agreement, the Securities
Intermediary shall identify in its records the Collateral Agent as the
entitlement holder entitled to exercise the rights that comprise any financial
asset credited to the Collateral Account;
(d) all property delivered to the Securities Intermediary pursuant
to this Agreement or the Purchase Contract Agreement will be credited promptly
to the Collateral Account;
(e) all securities or other property underlying any financial assets
credited to the Collateral Account shall be registered in the name of the
Purchase Contract Agent and indorsed to the Collateral Agent or in blank,
registered in the name of the Collateral Agent or credited to another
securities account maintained in the name of the Collateral Account.
SECTION 4.02. Treatment as Financial Assets. Each item of property
(whether investment property, financial asset, security, instrument or cash)
credited to the Collateral Account shall be treated as a financial asset.
SECTION 4.03. Sole Control by Collateral Agent. Except as provided in
Section 6.01, at all times prior to the termination of the Pledge, the
Collateral Agent shall have sole control of the Collateral Account, and the
Securities Intermediary shall take instructions and directions with respect to
the Collateral Account solely from the Collateral Agent. If at any time the
Securities Intermediary shall receive an entitlement order issued by the
Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent
by the Purchase Contract Agent or any Holder or any other Person. Until
termination of the Pledge, the Securities Intermediary will not comply with
any entitlement orders issued by the Purchase Contract Agent or any Holder.
SECTION 4.04. Securities Intermediary's Location. The Collateral
Account, and the rights and obligations of the Securities Intermediary, the
11
Collateral Agent, the Purchase Contract Agent and the Holders with respect
thereto, shall be governed by the laws of the State of New York. Regardless of
any provision in any other agreement, for purposes of the UCC, New York shall
be deemed to be the Securities Intermediary's location.
SECTION 4.05. No Other Claims. Except for the claims and interest of
the Collateral Agent and of the Purchase Contract Agent and the Holders in the
Collateral Account, the Securities Intermediary (without making any
investigation) does not know of any claim to, or interest in, the Collateral
Account or in any financial asset credited thereto. If any Person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against the Collateral
Account or in any financial asset carried therein, the Securities Intermediary
will promptly notify the Collateral Agent and the Purchase Contract Agent.
SECTION 4.06. Investment and Release. All proceeds of financial
assets from time to time deposited in the Collateral Account shall be invested
and reinvested as provided in this Agreement. At all times prior to
termination of the Pledge, no property shall be released from the Collateral
Account except in accordance with this Agreement or upon written instructions
of the Collateral Agent.
SECTION 4.07. Statements and Confirmations. The Securities
Intermediary will promptly send copies of all statements, confirmations and
other correspondence concerning the Collateral Account and any financial
assets credited thereto simultaneously to each of the Purchase Contract Agent
and the Collateral Agent at their addresses for notices under this Agreement.
SECTION 4.08. Tax Allocations. The Purchase Contract Agent shall file
with the Internal Revenue Service and deliver to the Holders Forms 1099 (or
successor or comparable forms), to the extent required by law, with respect to
payments received by the Holders. Neither the Securities Intermediary nor the
Collateral Agent shall have any tax reporting duties hereunder.
SECTION 4.09. No Other Agreements. The Securities Intermediary has
not entered into, and prior to the termination of the Pledge will not enter
into, any agreement with any other Person relating to the Collateral Account
or any financial assets credited thereto, including, without limitation, any
agreement to comply with entitlement orders of any Person other than the
Collateral Agent.
SECTION 4.10. Powers Coupled with an Interest. The rights and powers
granted in this Article 4 to the Collateral Agent have been granted in order
to perfect its security interests in the Collateral Account, are powers
coupled with an
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interest and will be affected neither by the bankruptcy of the Purchase
Contract Agent or any Holder nor by the lapse of time. The obligations of the
Securities Intermediary under this Article 4 shall continue in effect until
the termination of the Pledge.
ARTICLE 5
INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY MEDS AND REESTABLISHMENT
OF CORPORATE MEDS
SECTION 5.01. Initial Deposit of Notes. (a) Prior to or concurrently
with the execution and delivery of this Agreement, the Purchase Contract
Agent, on behalf of the initial Holders of the Corporate MEDS, shall Transfer
to the Collateral Agent, for credit to the Collateral Account, the Notes or
security entitlements relating thereto, and, in the case of security
entitlements, the Securities Intermediary shall indicate by book-entry that a
securities entitlement to such Notes has been credited to the Collateral
Account.
(b) Prior to any Event of Default, the Collateral Agent agrees to
hold any Notes or security interests relating thereto, constituting a portion
of the Collateral registered in the name of the Purchase Contract Agent, as
attorney-in-fact for the Holders, with appropriate indorsement in the form
delivered to it and shall not re- register such Notes or security interests
relating thereto prior to an Event of Default.
SECTION 5.02. Establishment of Treasury MEDS.
(a) So long as the Treasury Portfolio has not replaced the Notes as
a component of the Corporate MEDS as a result of a Tax Event Redemption, at
any time prior 11:00 a.m. (New York City time) on the Business Day immediately
preceding the Initial Remarketing Date, a Holder of Corporate MEDS shall have
the right to establish or reestablish Treasury MEDS by substitution of
Treasury Securities or security entitlements with respect thereto for the
Pledged Notes comprising a part of such Holder's Corporate MEDS in integral
multiples of 20 Corporate MEDS by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Treasury Securities or security entitlements with
respect thereto having a Value equal to the aggregate principal
amount of the Pledged Notes to be released, accompanied by a notice,
substantially in the form of Exhibit C to the Purchase Contract
Agreement, whereupon the Purchase Contract Agent shall deliver to the
Collateral Agent a notice,
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substantially in the form of Exhibit A hereto, (A) stating that such
Holder has notified the Purchase Contract Agent that such Holder has
Transferred Treasury Securities or security entitlements with respect
thereto to the Collateral Agent for credit to the Collateral Account,
(B) stating the Value of the Treasury Securities or security
entitlements with respect thereto Transferred by such Holder and (C)
requesting that the Collateral Agent release from the Pledge the
Pledged Notes that are a component of such Corporate MEDS; and
(ii) delivering the related Corporate MEDS to the Purchase
Contract Agent.
Upon receipt of such notice and confirmation that Treasury Securities
or security entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice, substantially in the form of
Exhibit B hereto, to release such Pledged Notes from the Pledge by Transfer to
the Purchase Contract Agent for distribution to such Holder, free and clear of
any lien, pledge or security interest created hereby.
(b) Upon credit to the Collateral Account of Treasury Securities or
security entitlements with respect thereto delivered by a Holder of Corporate
MEDS and receipt of the related instruction from the Collateral Agent, the
Securities Intermediary shall release such Pledged Notes and shall promptly
Transfer the same to the Purchase Contract Agent for distribution to such
Holder, free and clear of any lien, pledge or security interest created
hereby.
SECTION 5.03. Reestablishment of Corporate MEDS.
(a) So long as the Treasury Portfolio has not replaced the Notes as
a component of the Corporate MEDS as a result of a Tax Event Redemption, at
any time on or prior to 11:00 a.m. (New York City time) on the Business Day
immediately preceding the Initial Remarketing Date, a Holder of Treasury MEDS
shall have the right to reestablish Corporate MEDS by substitution of Notes or
security entitlements with respect thereto for Pledged Treasury Securities in
integral multiples of 20 Treasury MEDS by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Notes or security entitlements with respect
thereto having a principal amount equal to the Value of the Pledged
Treasury Securities to be released, accompanied by a notice,
substantially in the form of Exhibit C to the Purchase Contract
Agreement, whereupon the Purchase Contract Agent shall deliver to the
Collateral Agent a notice,
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substantially in the form of Exhibit C hereto, stating that such
Holder hasTransferred the Notes or security entitlements with
respect thereto to the Collateral Account for credit to the
Collateral Account and requesting that the Collateral Agent release
from the Pledge the Pledged Treasury Securities related to such
Treasury MEDS; and
(ii) delivering the related Treasury MEDS to the Purchase
Contract Agent.
Upon receipt of such notice and confirmation that Notes or security
entitlements with respect thereto have been credited to the Collateral Account
as described in such notice, the Collateral Agent shall instruct the
Securities Intermediary by a notice substantially in the form of Exhibit D
hereto to release such Pledged Treasury Securities from the Pledge by Transfer
to the Purchase Contract Agent for distribution to such Holder, free and clear
of any lien, pledge or security interest created hereby.
(b) Upon credit to the Collateral Account of Notes or security
entitlements with respect thereto delivered by a Holder of Treasury MEDS and
receipt of the related instruction from the Collateral Agent, the Securities
Intermediary shall release such Pledged Treasury Securities and shall promptly
Transfer the same to the Purchase Contract Agent for distribution to such
Holder, free and clear of any lien, pledge or security interest created
hereby.
SECTION 5.04. Termination Event.
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that a Termination Event has occurred,
the Collateral Agent shall release all Collateral from the Pledge and shall
promptly Transfer:
(i) any Pledged Notes or security entitlements with respect
thereto or Pledged Applicable Ownership Interests (if the Treasury
Portfolio has become a component of the Corporate MEDS as a result of
a Successful Initial Remarketing, Successful Interim Remarketing or a
Tax Event Redemption);
(ii) any Pledged Treasury Securities, and
(iii) payments by Holders (or the Permitted Investments of
such payments) pursuant to Section 5.05 hereof,
15
to the Purchase Contract Agent for the benefit of the Holders for distribution
to such Holders in accordance with their respective interests, free and clear
of any lien, pledge or security interest or other interest created hereby;
provided, however, if any Holder shall be entitled to receive less than $1,000
with respect to its interest in the Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) of the Treasury
Portfolio, the Purchase Contract Agent shall have the right (but not the
obligation) to dispose of such interest for cash and deliver to such Holder
cash in lieu of delivering the Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) of the Treasury Portfolio.
(b) If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code, and if the Collateral Agent shall
for any reason fail promptly to effectuate the release and Transfer of all
Pledged Notes, the Pledged Applicable Ownership Interests, the Pledged
Treasury Securities or payments by Holders (or the Permitted Investments of
such payments) pursuant to Section 5.05 hereof, as the case may be, as
provided by this Section 5.04, the Purchase Contract Agent shall:
(i) use its best efforts to obtain an opinion of a nationally
recognized law firm reasonably acceptable to the Collateral Agent to
the effect that, as a result of the Company's being the debtor in
such a bankruptcy case, the Collateral Agent will not be prohibited
from releasing or Transferring the Collateral as provided in this
Section 5.04, and shall deliver or cause to be delivered such opinion
to the Collateral Agent within ten days after the occurrence of such
Termination Event, and if (A) the Purchase Contract Agent shall be
unable to obtain such opinion within ten days after the occurrence of
such Termination Event or (B) the Collateral Agent shall continue,
after delivery of such opinion, to refuse to effectuate the release
and Transfer of all Pledged Notes, Pledged Applicable Ownership
Interests, the Pledged Treasury Securities and the payments by
Holders (or the Permitted Investments of such payments) pursuant to
Section 5.05 hereof or the Proceeds of any of the foregoing, as the
case may be, as provided in this Section 5.04, then the Purchase
Contract Agent shall within fifteen days after the occurrence of such
Termination Event commence an action or proceeding in the court
having jurisdiction of the Company's case under the Bankruptcy Code
seeking an order requiring the Collateral Agent to effectuate the
release and transfer of all Pledged Notes, Pledged Applicable
Ownership Interests, the Pledged Treasury Securities, or the payments
by Holders (or the Permitted Investments of such payments) pursuant
to Section 5.05 hereof, or as the case may be, as provided by this
Section 5.04; or
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(ii) commence an action or proceeding like that described in
clause 5.04(b)(i) hereof within ten days after the occurrence of such
Termination Event.
SECTION 5.05. Cash Settlement.
(a) Upon receipt by the Collateral Agent of (1) a notice from the
Purchase Contract Agent promptly after the receipt by the Purchase Contract
Agent of a notice from a Holder of Corporate MEDS or Treasury MEDS that such
Holder has elected, in accordance with the procedures specified in Section
5.02(c)(i) or (f)(i) of the Purchase Contract Agreement, respectively, to
effect a Cash Settlement and (2) payment by such Holder of Corporate MEDS or
Treasury MEDS by deposit in the Collateral Account prior to 11:00 a.m. (New
York City time) on the fourth Business Day immediately preceding the Purchase
Contract Settlement Date of the Purchase Price in lawful money of the United
States by certified or cashier's check or wire transfer of immediately
available funds payable to or upon the order of the Securities Intermediary,
then the Collateral Agent shall:
(i) instruct the Securities Intermediary promptly to invest
any such Cash in Permitted Investments;
(ii) instruct the Securities Intermediary to release from the
Pledge the Corporate MEDS holder's or the Treasury MEDS holder's
related Pledged Notes, Pledged Applicable Ownership Interests or
Pledged Treasury Securities, as applicable, as to which such Holder has
effected a Cash Settlement pursuant to this Section 5.05(a); and
(iii) instruct the Securities Intermediary to Transfer all such
Pledged Notes, Pledged Applicable Ownership Interests or the Pledged
Treasury Securities, as the case may be, to the Purchase Contract
Agent for the benefit of such Holder, in each case free and clear of
the Pledge created hereby, for distribution to such Holder.
The Company shall instruct the Collateral Agent in writing as to the
type of Permitted Investments in which any such Cash shall be invested;
provided, however, that if the Company fails to deliver such written
instructions by 10:30 a.m. (New York City time), the Collateral Agent shall
invest such Cash in the Permitted Investments described in clause (6) of the
definition of Permitted Investments.
Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Purchase Contract Settlement Date, the Collateral Agent
shall
17
(A) pay the portion of such proceeds and deliver any certified or cashier's
checks received, in an aggregate amount equal to the Purchase Price, to the
Company on the Purchase Contract Settlement Date, and (B) release any amounts
in excess of the Purchase Price earned from such Permitted Investments to the
Purchase Contract Agent for distribution to such Holder.
(b) If a Holder of Corporate MEDS (unless a Tax Event Redemption, a
Successful Initial Remarketing or a Successful Interim Remarketing shall have
occurred) (i) fails to notify the Purchase Contract Agent of its intention to
make a Cash Settlement as provided in paragraph 5.02(c)(i) of the Purchase
Contract Agreement or (ii) does notify the Purchase Contract Agent of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by paragraph 5.02(c)(ii) of the Purchase Contract Agreement, such
Holder shall be deemed to have consented to the disposition of such Holder's
Pledged Notes in accordance with paragraph 5.02(c)(iii) of the Purchase
Contract Agreement.
(c) If a Holder of a Treasury MEDS or a Holder of Corporate MEDS (if
a Tax Event Redemption, a Successful Initial Remarketing or a Successful
Interim Remarketing shall have occurred) (i) fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement as provided in
paragraph 5.02(f)(i) of the Purchase Contract Agreement or (ii) does notify
the Purchase Contract Agent as provided in paragraph 5.02(f)(ii) of the
Purchase Contract Agreement of its intention to pay the Purchase Price in
cash, but fails to make such payment as required by paragraph 5.02(f)(ii) of
the Purchase Contract Agreement, such Holder shall be deemed to have elected
to pay the Purchase Price in accordance with paragraph 5.02(f)(iii) of the
Purchase Contract Agreement.
(d) As soon as practicable after 11:00 a.m. (New York City time) on
the fourth Business Day immediately preceding the Purchase Contract Settlement
Date, the Collateral Agent shall deliver to the Purchase Contract Agent a
notice, substantially in the form of Exhibit E hereto, stating (i) the amount
of cash that it has received with respect to the Cash Settlement of Corporate
MEDS, (ii) the amount of Cash that it has received with respect to the Cash
Settlement of Treasury MEDS and (iii) the amount of Pledged Notes to be
remarketed in the Final Remarketing pursuant to Section 5.02(c)(iii) of the
Purchase Contract Agreement.
SECTION 5.06. Early Settlement and Cash Merger Early Settlement. Upon
receipt by the Collateral Agent of a notice from the Purchase Contract Agent
that a Holder of Securities has elected to effect either (i) Early Settlement
of its obligations under the Purchase Contracts forming a part of such
Securities in accordance with the terms of the Purchase Contracts and Section
5.07 of the Purchase Contract Agreement or (ii) Cash Merger Early Settlement
of its
18
obligations under the Purchase Contracts forming a part of such Securities in
accordance with the terms of the Purchase Contracts and Section 5.04(b)(2) of
the Purchase Contract Agreement (which notice shall set forth the number of
such Purchase Contracts as to which such Holder has elected to effect Early
Settlement or Cash Merger Early Settlement), and that the Purchase Contract
Agent has received from such Holder, and paid to the Company as confirmed in
writing by the Company, the related Purchase Price pursuant to the terms of
the Purchase Contracts and the Purchase Contract Agreement and that all
conditions to such Early Settlement or Cash Merger Early Settlement have been
satisfied, then the Collateral Agent shall release from the Pledge, (1)
Pledged Notes or the Pledged Applicable Ownership Interests in the case of a
Holder of Corporate MEDS or (2) Pledged Treasury Securities, in the case of a
Holder of Treasury MEDS, in each case with a Value equal to the product of (x)
the Stated Amount times (y) the number of Purchase Contracts as to which such
Holder has elected to effect Early Settlement or Cash Merger Early Settlement,
and shall instruct the Securities Intermediary to Transfer all such Pledged
Applicable Ownership Interests or Pledged Notes or Pledged Treasury
Securities, as the case may be, to the Purchase Contract Agent for the benefit
of such Holder, in each case free and clear of the Pledge created hereby, for
distribution to such Holder. A Treasury MEDS holder may settle early only in
integral multiples of 20 Purchase Contracts and a Corporate MEDS holder, if a
Tax Event Redemption, a Successful Initial Remarketing or a Successful Interim
Remarketing has occurred, may settle early only in integral multiples of
80,000 Purchase Contracts.
SECTION 5.07. Application of Proceeds in Settlement of Purchase
Contracts.
(a) If a Holder of Corporate MEDS (unless a Successful Initial
Remarketing, Successful Interim Remarketing or a Tax Event Redemption has
occurred) has not elected to make an effective Cash Settlement by notifying
the Purchase Contract Agent in the manner provided for in Section 5.02(c)(i)
of the Purchase Contract Agreement or does notify the Purchase Contract Agent
as provided in paragraph 5.02(c)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by paragraph 5.02(c)(ii) of the Purchase Contract Agreement, such
Holder shall be deemed to have elected to pay for the shares of Common Stock
to be issued under such Purchase Contracts from the Proceeds of the
remarketing of the related Pledged Notes. In such event, the Collateral Agent
shall instruct the Securities Intermediary to Transfer 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 commercially reasonable best efforts to remarket such
Pledged Notes. The Remarketing Agent will deposit the Proceeds of such Final
Remarketing (less,
19
to the extent permitted by the Remarketing Agreement, the Remarketing Fee) in
the Collateral Account, and the Collateral Agent shall invest the Proceeds of
the remarketing in Permitted Investments set forth in clause (6) of the
definition of Permitted Investments. On the Purchase Contract Settlement Date,
the Purchase Contract Agent shall consult with the Collateral Agent regarding
the instruction the Collateral Agent shall give to the Securities Intermediary
in order to apply a portion of the Proceeds from such remarketing equal to the
aggregate principal amount of such Pledged Notes to satisfy in full such
Holder's obligations to pay the Purchase Price to purchase the shares of
Common Stock under the related Purchase Contracts and the balance of the
Proceeds from the remarketing, if any, that shall be transferred to the
Purchase Contract Agent for the benefit of such Holder for distribution to
such Holder.
If the Remarketing Agent advises the Collateral Agent in writing that
there has been a Failed Final Remarketing, the Collateral Agent, for the
benefit of the Company shall, at the written direction of the Company,
exercise the Company's rights as a secured party with respect to the Pledged
Notes and dispose of the Pledged Notes in accordance with applicable law or
deliver the Pledged Notes to the Company to retain. Following such action, the
Holder's obligations to pay the Purchase Price for the shares of Common Stock
will be satisfied in full.
(b) If a Holder of a Treasury MEDS or a Holder of Corporate MEDS (if
a Tax Event Redemption, a Successful Initial Remarketing or a Successful
Interim Remarketing has occurred) has not elected to make an effective Cash
Settlement by notifying the Purchase Contract Agent in the manner provided for
in Section 5.02(f)(i) of the Purchase Contract Agreement, or has given such
notice but failed to make such payment in the manner required by Section
5.02(f)(ii) of the Purchase Contract Agreement, such Holder shall be deemed to
have elected to pay for the shares of Common Stock to be issued under such
Purchase Contracts from the Proceeds of the related Pledged Treasury
Securities or Pledged Applicable Ownership Interests, as the case may be.
Promptly, after 11:00 a.m. (New York City time) on the Business Day
immediately prior to the Purchase Contract Settlement Date, the Collateral
Agent shall invest the Cash Proceeds of the maturing Pledged Treasury
Securities or Pledged Applicable Ownership Interests, as the case may be, in
Permitted Investments set forth in clause (6) of the definition of Permitted
Investments, unless prior to 10:30 a.m. (New York City time) on such date, the
Company shall otherwise instruct the Collateral Agent as to the type of
Permitted Investments in which any such Cash Proceeds shall be invested.
Without receiving any instruction from any such Holder, the Collateral Agent
shall apply the Proceeds of the related Pledged Treasury Securities or Pledged
Applicable Ownership Interests, as the case may be, to the settlement of such
Purchase Contracts on the Purchase Contract Settlement Date. In the event the
sum of the Proceeds from the related Pledged Treasury Securities or Pledged
20
Applicable Ownership Interests, as the case may be, and the investment
earnings from the investment in Permitted Investments exceeds the aggregate
Purchase Price of the Purchase Contracts being settled thereby, the Collateral
Agent shall instruct the Securities Intermediary to distribute such excess,
when received, to the Purchase Contract Agent for the benefit of such Holder
for distribution to such Holder.
(c) Prior to 11:00 a.m. (New York City time) on the Business Day
immediately preceding the Initial Remarketing Date, but no earlier than the
Payment Date immediately preceding such date, Holders of Separate Notes may
elect to have their Separate Notes remarketed under the Remarketing Agreement
and subject to the terms of any supplemental remarketing agreement, by
delivering their Separate Notes, along with a notice of such election,
substantially in the form of Exhibit F hereto, to the Custodial Agent. After
such time, such election shall become an irrevocable election to have such
Separate Notes remarketed in the Initial Remarketing and, in the case of a
Failed Initial Remarketing, in any Interim Remarketing and the Final
Remarketing. The Custodial Agent shall hold Separate Notes in an account
separate from the Collateral Account in which the Pledged Securities shall be
held. Holders of Notes electing to have their Separate Notes remarketed will
also have the right to withdraw that election by written notice to the
Custodial Agent, substantially in the form of Exhibit G hereto, prior to 11:00
a.m. (New York City time) on the Business Day immediately preceding the
Initial Remarketing Date, upon which notice the Custodial Agent shall return
such Separate Notes to such Holder.
Promptly after 11:00 a.m. on the Business Day immediately preceding
the Initial Remarketing Date, any Interim Remarketing Date or the Final
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
5.07(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 of such Remarketing for the
benefit of such Holders. In the event of a Failed Initial Remarketing, a
Failed Interim Remarketing or a Failed Final Remarketing, the Remarketing
Agent will promptly return such Separate Notes to the Custodial Agent, and, in
the event of a Failed Final Remarketing, the Custodial Agent shall deliver
such Separate Notes to the appropriate Holders.
SECTION 5.08. Tax Event Redemption. If the Collateral Agent receives
written notice that a Tax Event Redemption has occurred while Notes are still
credited to the Collateral Account, the Collateral Agent shall apply the
21
Redemption Amount to purchase the Treasury Portfolio and the Collateral Agent
shall credit the Applicable Ownership Interests (as specified in clause (i) of
the definition of such term) of the Treasury Portfolio to the Collateral
Account and shall transfer the Applicable Ownership Interests (as specified in
clause (ii) of the definition of such term) of the Treasury Portfolio to the
Purchase Contract Agent for the benefit of the Holders of the Corporate MEDS.
Upon credit to the Collateral Account of the Applicable Ownership Interests
(as specified in clause (i) of the definition of such term) of the Treasury
Portfolio having a Value equal to the aggregate principal amount of the
Pledged Notes, the Collateral Agent shall cause the Securities Intermediary to
release the Pledged Notes from the Collateral Account and shall promptly
transfer the Pledged Notes to the Company.
ARTICLE 6
VOTING RIGHTS - PLEDGED NOTES
SECTION 6.01. Voting Rights. Subject to the terms of the Section 4.02
of the Purchase Contract Agreement, 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 the Purchase Contract
Agreement; provided, that the Purchase Contract Agent shall not exercise or
shall not refrain from exercising such right, as the case may be, if, in the
judgment of the Purchase Contract Agent, such action would impair or otherwise
have a material adverse effect on the value of all or any of the Pledged
Notes; and provided, further, that the Purchase Contract Agent shall give the
Company and the Collateral Agent at least five Business Days' prior written
notice of the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of any notices and
other communications in respect of any Pledged Notes, including notice of any
meeting at which holders of the Notes are entitled to vote or solicitation of
consents, waivers or proxies of holders of the 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 Company and
delivered to the Purchase Contract Agent with respect to the Pledged Notes.
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ARTICLE 7
RIGHTS AND REMEDIES
SECTION 7.01. Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies specified in Section 5.07
hereof or otherwise available at law or in equity, after an event of default
(as specified in Section 7.01(b) below) hereunder, the Collateral Agent shall
have all of the rights and remedies with respect to the Collateral of a
secured party under the UCC (whether or not the UCC is in effect in the
jurisdiction where the rights and remedies are asserted) and the TRADES
Regulations and such additional rights and remedies to which a secured party
is entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted. Without limiting the generality of the
foregoing, such remedies may include, to the extent permitted by applicable
law, (1) retention of the Pledged Notes, Pledged Treasury Securities or the
appropriate Pledged Applicable Ownership Interests in full satisfaction of the
Holders' obligations under the Purchase Contracts and the Purchase Contract
Agreement or (2) sale of the Pledged Notes, Pledged Treasury Securities or the
appropriate Pledged Applicable Ownership Interests 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 Pledged
Applicable Ownership Interests, 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 appropriate
Pledged Applicable Ownership Interests or such Pledged Treasury Securities, as
applicable, are a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities or Pledged Applicable Ownership Interests, as applicable,
any and all of the rights and remedies available to a secured party under the
UCC and the TRADES Regulations after default by a debtor, and as otherwise
granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of
the Pledged Notes, (ii) the principal amount of the Pledged Treasury
Securities and (iii) the Pledged Applicable Ownership Interests. subject, in
each case, to the provisions of Article 3 hereof, and as otherwise granted
herein.
23
(d) The Purchase Contract Agent and each Holder of Securities agrees
that, from time to time, upon the written request of the Collateral Agent or
the Purchase Contract Agent, such Holder shall execute and deliver such
further documents and do such other acts and things as the Collateral Agent
may reasonably request in order to maintain the Pledge, and the perfection and
priority thereof, and to confirm the rights of the Collateral Agent hereunder.
The Purchase Contract Agent shall have no liability to any Holder for
executing any documents or taking any such acts requested by the Collateral
Agent hereunder, except for liability for its own grossly negligent acts, its
own grossly negligent failure to act or its own willful misconduct.
SECTION 7.02. Tax Event Redemption. Upon the occurrence of a Tax
Event Redemption while Notes are still credited to the Collateral Account, the
Redemption Amount, plus any accrued and unpaid interest payable on the Tax
Event Redemption Date with respect to the principal amount of the Pledged
Notes shall be credited to the Collateral Account by the Collateral Agent upon
receipt thereof from the Indenture Trustee, on or prior to 12:30 p.m., New
York City time on such Tax Event Redemption Date, by federal funds check or
wire transfer of immediately available funds. The Collateral Agent is hereby
authorized to present the Pledged Notes for payment as may be required by
their respective terms. Upon receipt of such funds, the Pledged Notes shall be
released from the Collateral Account. In the event such funds are credited to
the Collateral Account, the Collateral Agent, at the written direction of the
Company, shall instruct the Securities Intermediary to (a) apply an amount
equal to the Redemption Amount of such funds to purchase the Treasury
Portfolio from the Quotation Agent for credit to the Collateral Account and
(b) promptly remit the remaining portion of such funds, if any, to the
Purchase Contract Agent for payment to the Holders of Corporate MEDS.
SECTION 7.03. Initial Remarketing. The Collateral Agent shall, by
11:00 a.m., New York City time, on the Business Day immediately preceding the
Initial Remarketing Date, without any instruction from any Holder of Corporate
MEDS, 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 commercially
reasonable best efforts to remarket such Pledged Notes on the Initial
Remarketing Date at a price of at least 100.25% of the sum of the Treasury
Portfolio Purchase Price plus the Separate Notes Purchase Price. After
deduction as the Remarketing Fee of an amount not exceeding 25 basis points
(.25%) of the sum of the Treasury Portfolio Purchase Price plus the Separate
Notes Purchase Price from any amount of such Proceeds in excess of the sum of
the Treasury Portfolio Purchase Price plus the Separate Notes Purchase Price,
the Remarketing Agent will remit the entire amount of the Proceeds of the
Pledged Notes from such remarketing to the
24
Collateral Agent on or prior to 12:00 p.m., New York City time, on the third
Business Day immediately following the Initial Remarketing Date by check or
wire transfer in immediately available funds at such place and at such account
as may be designated by the Collateral Agent in exchange for the Pledged
Notes. In the event the Collateral Agent receives such Proceeds, the
Collateral Agent will, at the written direction of the Company, apply an
amount equal to the Treasury Portfolio Purchase Price to purchase from the
Quotation Agent the Treasury Portfolio and promptly remit the remaining
portion of such Proceeds to the Purchase Contract Agent for payment to the
Holders of Corporate MEDS. With respect to Separate Notes, any proceeds of the
Initial Remarketing in excess of the Remarketing Fee attributable to the
Separate Notes will be remitted to the Custodial Agent for payment to the
holders of Separate Notes. The Collateral Agent shall Transfer the Treasury
Portfolio to the Collateral Account and the Pledged Applicable Ownership
Interests will secure the obligation of all Holders of Corporate MEDS to
purchase Common Stock of the Company under the Purchase Contracts constituting
a part of such Corporate MEDS, in substitution for the Pledged Notes, which
shall be released from the Collateral Account. In the event of a Failed
Initial Remarketing, the Notes presented to the Remarketing Agent pursuant to
this Section 7.03 for Remarketing shall be redeposited into the Collateral
Account.
SECTION 7.04. Interim Remarketing. The Collateral Agent shall, by
11:00 a.m., New York City time, on the Business Day immediately preceding any
Interim Remarketing Date, without any instruction from any Holder of Corporate
MEDS, 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 commercially
reasonable best efforts to remarket such Pledged Notes on the Interim
Remarketing Date at a price of at least 100.25% of the sum of the Treasury
Portfolio Purchase Price plus the Separate Notes Purchase Price. After
deduction as the Remarketing Fee of an amount not exceeding 25 basis points
(.25%) of the sum of the Treasury Portfolio Purchase Price plus the Separate
Notes Purchase Price from any amount of such Proceeds in excess of the sum of
the Treasury Portfolio Purchase Price plus the Separate Notes Purchase Price,
the Remarketing Agent will remit the entire amount of the Proceeds of the
Pledged Notes from such remarketing to the Collateral Agent on or prior to
12:00 p.m., New York City time, on the third Business Day immediately
following the Interim Remarketing Date 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
25
Proceeds to the Purchase Contract Agent for payment to the Holders of
Corporate MEDS. With respect to Separate Notes, any proceeds of any Interim
Remarketing in excess of the Remarketing Fee attributable to the Separate
Notes will be remitted to the Custodial Agent for payment to the holders of
Separate Notes. The Collateral Agent shall Transfer the Treasury Portfolio to
the Collateral Account and the Pledged Applicable Ownership Interests will
secure the obligation of all Holders of Corporate MEDS to purchase Common
Stock of the Company under the Purchase Contracts constituting a part of such
Corporate MEDS, in substitution for the Pledged Notes, which shall be released
from the Collateral Account. In the event of such Interim Remarketing results
in a Failed Interim Remarketing, the Notes presented to the Remarketing Agent
pursuant to this Section 7.04 for Remarketing shall be redeposited into the
Collateral Account.
SECTION 7.05. Substitutions. Whenever a Holder has the right to
substitute Treasury Securities, Notes or security entitlements for any of them
or the appropriate Applicable Ownership Interests (as defined in clause (i) of
the definition of such term) of the Treasury Portfolio, as the case may be,
for financial assets held in the Collateral Account, such substitution shall
not constitute a novation of the security interest created hereby.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 8.01. Representations and Warranties. Each Holder from time
to time, acting through the Purchase Contract Agent as attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby
represents and warrants to the Collateral Agent (with respect to such Holder's
interest in the Collateral), which representations and warranties shall be
deemed repeated on each day a Holder Transfers Collateral that:
(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 for credit to
the Collateral Account, free and clear of any security interest, lien,
encumbrance, call, liability to pay money or other restriction other than the
security interest and lien granted under Article 2 hereof;
26
(c) upon the Transfer of the Collateral to the Collateral Agent for
credit to the Collateral Account, the Collateral Agent, for the benefit of the
Company, will have a valid and perfected first priority security interest
therein (assuming that any central clearing operation or any securities
intermediary or other entity not within the control of the Holder involved in
the Transfer of the Collateral, including the Collateral Agent and the
Securities Intermediary, gives the notices and takes the action required of it
hereunder and under applicable law for perfection of that interest and
assuming the establishment and exercise of control pursuant to Article 4
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 8.02. Covenants. The Holders from time to time, acting
through the Purchase Contract Agent as their attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any
covenant made by or on behalf of a Holder), hereby covenant to the Collateral
Agent that for so long as the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will create
or purport to create or allow to subsist any mortgage, charge, lien, pledge or
any other security interest whatsoever over the Collateral or any part of it
other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell
or otherwise dispose (or attempt to dispose) of the Collateral or any part of
it except for the beneficial interest therein, subject to the Pledge
hereunder, transferred in connection with the Transfer of the Securities.
ARTICLE 9
THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES
INTERMEDIARY
It is hereby agreed as follows:
27
SECTION 9.01. Appointment, Powers and Immunities. The Collateral
Agent, the Custodial Agent or Securities Intermediary shall act as agent for
the Company hereunder with such powers as are specifically vested in the
Collateral Agent, the Custodial Agent or Securities Intermediary, as the case
may be, by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. The Collateral Agent, the Custodial Agent and
Securities Intermediary shall:
(a) have no duties or responsibilities except those expressly set
forth in this Agreement and no implied covenants or obligations shall be
inferred from this Agreement against the Collateral Agent, the Custodial Agent
and Securities Intermediary, nor shall the Collateral Agent, the Custodial
Agent and Securities Intermediary be bound by the provisions of any agreement
by any party hereto beyond the specific terms hereof;
(b) 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 Custodial Agent or Securities Intermediary, as the case
may be), the Securities, any Collateral 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 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) not be required to initiate or conduct any litigation or
collection proceedings hereunder (except pursuant to directions furnished
under Section 9.02 hereof, subject to Section 9.06 hereof);
(d) not be responsible for any action taken or omitted to be taken
by it hereunder or under any other document or instrument referred to or
provided for herein or in connection herewith or therewith, except for its own
gross negligence or willful misconduct; and
(e) not be required to advise any party as to selling or retaining,
or taking or refraining from taking any action with respect to, any securities
or other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall take all
reasonable
28
action in connection with the safekeeping and preservation of the Collateral
hereunder.
No provision of this Agreement shall require the Collateral Agent,
Custodial Agent or 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, Custodial Agent or
Securities Intermediary be liable for any amount in excess of the Value of the
Collateral. Notwithstanding the foregoing, each of the Collateral Agent,
Custodial Agent and Securities Intermediary in its individual capacity hereby
waives any right of setoff, bankers' lien, liens or perfection rights as
securities intermediary or any counterclaim with respect to any of the
Collateral.
SECTION 9.02. Instructions of the Company. The Company shall have the
right, by one or more written instruments executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral
Agent, or to direct the taking or refraining from taking of any action
authorized by this Agreement; provided, however, that (i) such direction shall
not conflict with the provisions of any law or of this Agreement or involve
the Collateral Agent in personal liability and (ii) the Collateral Agent shall
be indemnified to its satisfaction as provided herein. Nothing contained in
this Section 9.02 shall impair the right of the Collateral Agent in its
discretion to take any action or omit to take any action which it deems proper
and which is not inconsistent with such direction.
SECTION 9.03. Reliance by Collateral Agent and Securities
Intermediary. Each of the Securities Intermediary, the Custodial Agent and the
Collateral Agent shall be entitled to rely conclusively upon any
certification, order, judgment, opinion, notice or other written communication
(including, without limitation, any thereof by e-mail or similar electronic
means, 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 consult with and conclusively rely upon advice, opinions
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 9.04. Rights in Other Capacities. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without
29
having to account therefor to the Company) accept deposits from, lend money
to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any other Person
interested herein and any Holder of Securities (and any of their respective
subsidiaries or affiliates) as if it were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, and
the Collateral Agent, the Custodial Agent, the Securities Intermediary and
their affiliates may accept fees and other consideration from the Purchase
Contract Agent and any Holder of Securities without having to account for the
same to the Company; provided that each of the Securities Intermediary, 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 other than the lien created by the Pledge.
SECTION 9.05. Non-Reliance on Collateral Agent, the Custodial Agent
and Securities Intermediary. 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. None of the Collateral Agent, the Custodial Agent
or the Securities Intermediary shall have any duty or responsibility to
provide the Company with any credit or other information concerning the
affairs, financial condition or business of the Purchase Contract Agent or any
Holder of Securities (or any of their respective affiliates) that may come
into the possession of the Collateral Agent, the Custodial Agent or the
Securities Intermediary or any of their respective affiliates.
SECTION 9.06. Compensation and Indemnity. The Company agrees to:
(a) pay the Collateral Agent, the Custodial Agent and the Securities
Intermediary from time to time such compensation as shall be agreed in writing
between the Company and the Collateral Agent or the Securities Intermediary,
as the case may be, for all services rendered by them hereunder;
(b) indemnify and hold harmless the Collateral Agent, the Custodial
Agent, the Securities Intermediary and each of their respective directors,
officers, agents and employees (collectively, the "Indemnitees"), harmless
from and against any and all claims, liabilities, losses, damages, fines,
penalties and expenses (including reasonable fees and expenses of counsel)
(collectively, "Losses" and individually, a "Loss") that may be imposed on,
incurred by, or asserted against, the Indemnitees or any of them for following
any instructions or
30
other directions upon which either the Collateral Agent, the Custodial Agent
or the Securities Intermediary is entitled to rely pursuant to the terms of
this Agreement; and
(c) in addition to and not in limitation of paragraph (b)
immediately above, indemnify and hold the Indemnitees and each of them
harmless from and against any and all Losses that may be imposed on, incurred
by or asserted against, the Indemnitees or any of them in connection with or
arising out of the Collateral Agent's, the Custodial Agent's or the Securities
Intermediary's acceptance or performance of its powers and duties under this
Agreement, provided the Collateral Agent, the Custodial Agent or the
Securities Intermediary has not acted with gross negligence or engaged in
willful misconduct or bad faith with respect to the specific Loss against
which indemnification is sought.
The provisions of this Section and Section 11.07 shall survive the
resignation or removal of the Collateral Agent, Custodial Agent or Securities
Intermediary and the termination of this Agreement.
SECTION 9.07. Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by
or among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, then at its sole option, each of the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall be entitled,
after prompt notice to the Company and the Purchase Contract Agent, to refuse
to comply with any and all claims, demands or instructions with respect to
such property or funds so long as such dispute or conflict shall continue, and
the Collateral Agent, the Custodial Agent and the Securities Intermediary
shall not be or become liable in any way to any of the parties hereto for its
failure or refusal to comply with such conflicting claims, demands or
instructions. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall be entitled to refuse to act until either:
(a) such conflicting or adverse claims or demands shall have been
finally determined by a court of competent jurisdiction or settled by
agreement between the conflicting parties as evidenced in a writing
satisfactory to the Collateral Agent, the Custodial Agent or the Securities
Intermediary; or
(b) the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall have received security or an indemnity satisfactory to it
sufficient to save it harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which it may incur by reason of its acting.
The Collateral Agent, the Custodial Agent and the Securities Intermediary may
in addition elect to commence an interpleader action or seek other judicial
relief or orders as the Collateral Agent, the Custodial Agent or the
Securities Intermediary
31
may deem necessary. Notwithstanding anything contained herein to the contrary,
none of the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall be required to take any action that is in its opinion
contrary to law or to the terms of this Agreement, or which would in its
opinion subject it or any of its officers, employees or directors to
liability.
SECTION 9.08. Resignation of Collateral Agent, the Custodial Agent and
Securities Intermediary.
(a) Subject to the appointment and acceptance of a successor
Collateral Agent, Custodial Agent or Securities Intermediary as provided
below:
(i) the Collateral Agent, the Custodial Agent and the Securities
Intermediary may resign at any time by giving notice thereof to the
Company and the Purchase Contract Agent as attorney-in-fact for the
Holders of Securities;
(ii) the Collateral Agent, the Custodial Agent and the
Securities Intermediary may be removed at any time by the Company; and
(iii) if the Collateral Agent, the Custodial Agent or the
Securities Intermediary fails to perform any of its material
obligations hereunder in any material respect for a period of not less
than 20 days after receiving written notice of such failure by the
Purchase Contract Agent and such failure shall be continuing, the
Collateral Agent, the Custodial Agent and the Securities Intermediary
may be removed by the Purchase Contract Agent, acting at the direction
of the Holders of Securities.
The Purchase Contract Agent shall promptly notify the Company of any removal
of the Collateral Agent, the Custodial Agent or the Securities Intermediary
pursuant to clause (iii) of this Section 9.08(a). Upon any such resignation or
removal, the Company shall have the right to appoint a successor Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, which
shall not be an Affiliate of the Purchase Contract Agent. If no successor
Collateral Agent, Custodial Agent or Securities Intermediary shall have been
so appointed and shall have accepted such appointment within 30 days after the
retiring Collateral Agent's, Custodial Agent's or Securities Intermediary's
giving of notice of resignation or the Company's or the Purchase Contract
Agent's giving notice of such removal, then the retiring Collateral Agent,
Custodial Agent or Securities Intermediary may petition any court of competent
jurisdiction, at the expense of the Company, for the appointment of a
successor Collateral Agent, Custodial Agent or Securities Intermediary. The
Collateral Agent, the Custodial Agent and
32
the Securities Intermediary shall each be a bank or a national banking
association which has an office (or an agency office) in New York City with a
combined capital and surplus of at least $50,000,000. Upon the acceptance of
any appointment as Collateral Agent, Custodial Agent or Securities
Intermediary hereunder by a successor Collateral Agent, Custodial Agent or
Securities Intermediary, as the case may be, such successor Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, and the retiring Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be, shall take all
appropriate action, subject to payment of any amounts owed to it hereunder, to
transfer any money and property held by it hereunder (including the
Collateral) to such successor. The retiring Collateral Agent, Custodial Agent
or Securities Intermediary shall, upon such succession, be discharged from its
duties and obligations as Collateral Agent, Custodial Agent or Securities
Intermediary hereunder. After any retiring Collateral Agent's, Custodial
Agent's or Securities Intermediary's resignation hereunder as Collateral
Agent, Custodial Agent or Securities Intermediary, the provisions of this
Article 9 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Collateral
Agent, Custodial Agent or Securities Intermediary. Any resignation or removal
of the Collateral Agent, Custodial Agent or Securities Intermediary hereunder,
at a time when such Person is acting as the Collateral Agent, Custodial Agent
or Securities Intermediary, shall be deemed for all purposes of this Agreement
as the simultaneous resignation or removal of the Collateral Agent, Securities
Intermediary or Custodial Agent, as the case may be.
SECTION 9.09. Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of
its duties hereunder, and the Collateral Agent shall not be liable for any
action taken or omitted by, or in reliance upon the advice of, such agents or
advisors selected in good faith. The appointment of agents pursuant to this
Section 9.09 shall be subject to prior written consent of the Company, which
consent shall not be unreasonably withheld.
SECTION 9.10. Survival. The provisions of this Article 9 shall
survive termination of this Agreement and the resignation or removal of the
Collateral Agent, the Custodial Agent or the Securities Intermediary.
SECTION 9.11. Exculpation. Anything contained in this Agreement to
the contrary notwithstanding, in no event shall the Collateral Agent, the
Custodial Agent or the Securities Intermediary or their officers, directors,
employees or agents be liable under this Agreement to any third party for
indirect, special,
33
punitive, or consequential loss or damage of any kind whatsoever, including,
but not limited to, 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 and regardless of the form of action.
ARTICLE 10
AMENDMENT
SECTION 10.01. Amendment Without Consent of Holders. Without the
consent of any Holders, the Company, when authorized by a Board Resolution,
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,
to:
(a) evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company;
(b) evidence and provide for the acceptance of appointment hereunder
by a successor Collateral Agent, Custodial Agent, Securities Intermediary or
Purchase Contract Agent;
(c) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the Company,
provided such covenants or such surrender do not adversely affect the
validity, perfection or priority of the Pledge created hereunder; or
(d) cure any ambiguity (or formal defect), correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, or make any other provisions with respect to such matters or questions
arising under this Agreement, provided such action shall not adversely affect
the interests of the Holders in any material respect.
SECTION 10.02. Amendment with Consent of Holders. With the consent of
the Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of such Holders delivered to the Company, the Purchase
Contract Agent, the Custodial Agent, the Securities Intermediary and the
Collateral Agent, as the case may be, the Company, when duly authorized by a
Board Resolution, the Purchase Contract Agent, the Collateral Agent, the
Securities Intermediary and the Collateral Agent may amend this Agreement for
the purpose of modifying in any manner the provisions of this Agreement or the
34
rights of the Holders in respect of the Securities; provided, however, that no
such supplemental agreement shall, without the unanimous consent of the
Holders of each Outstanding Security adversely affected thereby in any
material respect:
(a) change the amount or type of Collateral underlying a Security
(except for the rights of holders of Corporate MEDS to substitute the Treasury
Securities for the Pledged Notes or the Pledged Applicable Ownership
Interests, as the case may be, or the rights of Holders of Treasury MEDS to
substitute Notes or the Applicable Ownership Interests (as specified in clause
(i) of the definition of such term) of the Treasury Portfolio, as applicable,
for the Pledged Treasury Securities), unless such change is not adverse to the
Holders, 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 a modification or
amendment of the provisions of the Purchase Contract Agreement; or
(c) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for the modification or amendment of the provisions of this
Agreement;
provided that if any amendment or proposal referred to above would adversely
affect only the Corporate MEDS or only the Treasury MEDS, then only the
affected class of Holders as of the record date for the Holders entitled to
vote thereon will be entitled to vote on such amendment or proposal, and such
amendment or proposal shall not be effective except with the consent of
Holders of not less than a majority of such class; provided, further, that the
unanimous consent of the Holders of each outstanding Purchase Contract of such
class affected thereby shall be required to approve any amendment or proposal
specified in clauses (a) through (c) above.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
SECTION 10.03. Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 7.01 of the Purchase Contract Agreement with
respect to the Purchase Contract Agent) shall be fully authorized and
protected in relying upon, an Opinion of Counsel stating that the execution of
such amendment is authorized
35
or permitted by this Agreement and that all conditions precedent, if any, to
the execution and delivery of such amendment have been satisfied. The
Collateral Agent, Custodial Agent, Securities Intermediary and Purchase
Contract Agent may, but shall not be obligated to, enter into any such
amendment which affects their own respective rights, duties or immunities
under this Agreement or otherwise.
SECTION 10.04. Effect of Amendments. Upon the execution of any
amendment under this Section, this Agreement shall be modified in accordance
therewith, and such amendment shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered under the
Purchase Contract Agreement shall be bound thereby.
SECTION 10.05. Reference of Amendments. Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Section may, and shall if required by the
Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Certificates so modified as to conform, in the opinion of the Collateral
Agent, the Purchase Contract Agent and the Company, to any such amendment may
be prepared and executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Purchase Contract Agent in accordance with
the Purchase Contract Agreement in exchange for Certificates representing
Outstanding Securities.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. No Waiver. No failure on the part of the Company, the
Collateral Agent, the Securities Intermediary or any of their respective
agents to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Company, the
Collateral Agent, the Securities Intermediary or any of their respective
agents of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided
by law.
SECTION 11.02. Governing Law; Submission to Jurisdiction. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
36
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Holders from time to time of the Securities, acting through the Purchase
Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. The Company, the Collateral Agent,
the Custodial Agent, the Securities Intermediary and the Holders from time to
time of the Securities, acting through the Purchase Contract Agent as their
attorney-in- fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
SECTION 11.03. Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to
the intended recipient at the "Address for Notices" specified below its name
on the signature pages hereof or, as to any party, at such other address as
shall be designated by such party in a notice to the other parties. Except as
otherwise provided in this Agreement, all such communications shall be deemed
to have been duly given when transmitted by telecopier or personally delivered
or, in the case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
SECTION 11.04. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Company, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent, and the Holders from time to
time of the Securities, by their acceptance of the same, shall be deemed to
have agreed to be bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the Purchase Contract
Agent.
SECTION 11.05. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties hereto may execute this Agreement
by signing any such counterpart.
SECTION 11.06. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties
37
hereto as nearly as may be possible and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
SECTION 11.07. Expenses, Etc.. The Company agrees to reimburse the
Collateral Agent, the Custodial Agent and the Securities Intermediary for:
(a) all reasonable costs and expenses of the Collateral Agent, the
Custodial Agent and the Securities Intermediary (including, without
limitation, the reasonable fees and expenses of counsel to the Collateral
Agent, the Custodial Agent and the Securities Intermediary), in connection
with (i) the negotiation, preparation, execution and delivery or performance
of this Agreement and (ii) any modification, supplement or waiver of any of
the terms of this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent, the
Custodial Agent and the Securities Intermediary (including, without
limitation, reasonable fees and expenses of counsel) in connection with (i)
any enforcement or proceedings resulting or incurred in connection with
causing any Holder of Securities to satisfy its obligations under the Purchase
Contracts forming a part of the Securities and (ii) the enforcement of this
Section 11.07;
(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;
(d) all fees and expenses of any agent or advisor appointed by the
Collateral Agent and consented to by the Company under Section 9.09 of this
Agreement; and
(e) any other out-of-pocket costs and expenses reasonably incurred
by the Collateral Agent, the Custodial Agent and the Securities Intermediary
in connection with the performance of their duties hereunder.
SECTION 11.08. Security Interest Absolute. All rights of the
Collateral Agent and security interests hereunder, and all obligations of the
Holders from time to time hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
38
(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 the Securities under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or
any other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a pledgor.
SECTION 11.09. Notice of Tax Event, Tax Event Redemption and
Termination Event. Upon the occurrence of a Tax Event, a Tax Event Redemption
or a Termination Event, the Company shall deliver written notice to the
Purchase Contract Agent, the Collateral Agent and the Securities Intermediary.
Upon the written request of the Collateral Agent or the Securities
Intermediary, the Company shall inform such party whether or not a Tax Event,
a Tax Event Redemption or a Termination Event has occurred.
[SIGNATURES ON THE FOLLOWING PAGE]
39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
KEYSPAN CORPORATION JPMORGAN CHASE BANK, as
Purchase Contract Agent and
as attorney-in-fact of the Holders
from time to time of the Securities
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxxxx Xxxxxxxx
------------------------------------ --------------------------------
Name: Xxxxxx Xxxxxxxx Name: Xxxxxxxx Xxxxxxxx
Title: Executive Vice President Title: Vice President
and Chief Financial Officer
Address for Notices: Address for Notices:
KeySpan Corporation 000 X. 00xx Xxxxxx
Xxx XxxxxXxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxxx, Xxx Xxxx 00000 Telecopier No. (000) 000-0000/8175
Telecopier No.: 000-000-0000 Attention: Institutional Trust
Attention: Treasurer Services
THE BANK OF NEW YORK,
as Collateral Agent, Custodial Agent and
Securities Intermediary
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Treasurer
Address for Notices:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: 000-000-0000
Attention: Corporate Trust Administration
EXHIBIT A
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Establishment of Treasury MEDS)
The Bank of New York,
as Collateral Agent
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: _______ Corporate MEDS of KeySpan Corporation
(the "Company")
The securities account of The Bank of New York, as
Collateral Agent, maintained by the Securities Intermediary
and designated "The Bank of New York, as Collateral Agent of
KeySpan Corporation, as pledgee of JPMorgan Chase Bank, as
the Purchase Contract Agent on behalf of and as
attorney-in-fact for the Holders" (the "Collateral Account")
Please refer to the Pledge Agreement, dated as of May 6, 2002 (the
"Pledge Agreement"), among the Company, you, as Collateral Agent, as
Securities Intermediary and as Custodial Agent and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the holders of Corporate
MEDS from time to time. Capitalized terms used herein but not defined shall
have the meaning set forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.02 of the Pledge
Agreement that the holder of securities named below (the "Holder") has elected
to substitute $__________ Value of Treasury Securities or security
entitlements with respect thereto in exchange for an equal Value of Pledged
Notes relating to _________ Corporate MEDS and has delivered to the
undersigned a notice stating that the Holder has Transferred such Treasury
Securities or security entitlements with respect thereto to the Securities
Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or security entitlements thereto
have been credited to the Collateral Account, to release to the undersigned an
equal Value of Pledged Notes in accordance with Section 5.02 of the Pledge
Agreement.
JPMorgan Chase Bank,
Date: as Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By:__________________________
Name:
Title:
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements with respect thereto for the Pledged
Notes:
----------------------------- -----------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
------------------------------
Address
------------------------------
------------------------------
EXHIBIT B
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Establishment of Treasury MEDS)
The Bank of New York,
as Securities Intermediary
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: __________ Corporate MEDS of KeySpan Corporation (the
"Company")
The securities account of The Bank of New York, as Collateral Agent,
maintained by the Securities Intermediary and designated "The Bank of
New York, as Collateral Agent of KeySpan Corporation, as pledgee of
JPMorgan Chase Bank, as the Purchase Contract Agent on behalf of and
as attorney-in-fact for the Holders" (the "Collateral Account")
Please refer to the Pledge Agreement, dated as of May 6, 2002 (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary,
JPMorgan Chase Bank, as Purchase Contract Agent and as attorney-in-fact for
the holders of Corporate MEDS from time to time, and the undersigned, as
Collateral Agent. Capitalized terms used herein but not defined shall have the
meanings set forth in the Pledge Agreement.
When you have confirmed that $__________ Value of Treasury Securities
or security entitlements thereto has been credited to the Collateral Account
by or for the benefit of _________, as Holder of Corporate MEDS (the
"Holder"), you are hereby instructed to release from the Collateral Account an
equal Value of Pledged Notes or security entitlements with respect thereto
relating to _____ Corporate MEDS of the Holder by Transfer to the Purchase
Contract Agent.
The Bank of New York
as Collateral Agent
Dated:_______________
By:_______________________
Name:
Title:
Please print name and address of Holder:
-------------------------------- --------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
---------------------------------
Address
---------------------------------
---------------------------------
EXHIBIT C
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Reestablishment of Corporate MEDS )
The Bank of New York,
as Collateral Agent
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: ____________ Treasury MEDS of KeySpan Corporation (the
"Company")
Please refer to the Pledge Agreement dated as of May 6, 2002 (the
"Pledge Agreement"), among the Company, you, as Collateral Agent, as
Securities Intermediary, as Custodial Agent and the undersigned, as Purchase
Contract Agent and as attorney-in-fact for the holders of Treasury MEDS from
time to time. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.03(a) of the Pledge
Agreement that the holder of securities named below (the "Holder") has elected
to substitute $__________ Value of Notes or security entitlements with respect
thereto in exchange for $__________ Value of Pledged Treasury Securities and
has delivered to the undersigned a notice stating that the holder has
Transferred such Notes or security entitlements with respect thereto to the
Securities Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Notes or security entitlements with respect thereto
have been credited to the Collateral Account, to release to the undersigned
$__________ Value of Treasury Securities or security entitlements with respect
thereto related to _____ Treasury MEDS of such Holder in accordance with
Section 5.03(a) of the Pledge Agreement.
JPMorgan Chase Bank
as Purchase Contract Agent
Dated:_______________ By:_______________________
Name:
Title:
Please print name and address of Holder electing to substitute Notes or
security entitlements with respect thereto for Pledged Treasury Securities:
---------------------------- -------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
---------------------------------
Address
---------------------------------
---------------------------------
EXHIBIT D
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Reestablishment of Corporate MEDS)
The Bank of New York,
as Securities Intermediary
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: ___________ Treasury MEDS of KeySpan Corporation (the "Company")
The securities account of The Bank of New York, as Collateral Agent,
maintained by the Securities Intermediary and designated "The Bank of
New York, as Collateral Agent of KeySpan Corporation, as pledgee of
JPMorgan Chase Bank, as the Purchase Contract Agent on behalf of and
as attorney-in-fact for the Holders" (the "Collateral Account")
Please refer to the Pledge Agreement dated as of May 6, 2002 (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary,
Custodial Agent and Collateral Agent and JPMorgan Chase Bank, as Purchase
Contract Agent and as attorney-in-fact for the holders of Corporate MEDS from
time to time, and the undersigned, as Collateral Agent. Capitalized terms used
herein but no defined shall have the meaning set forth in the Pledge
Agreement.
When you have confirmed that $ __________ Value of Notes or security
entitlements with respect thereto has been credited to the Collateral Account
by or for the benefit of ________________, as Holder of Treasury MEDS (the
"Holder"), you are hereby instructed to release from the Collateral Account $
__________ Value of Treasury Securities or security entitlements thereto by
Transfer to the Purchase Contract Agent.
The Bank of New York,
as Collateral Agent
Dated:_______________ By:_______________________
Name:
Title:
------------------------------- --------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
-------------------------------
Address
-------------------------------
-------------------------------
EXHIBIT E
NOTICE OF CASH SETTLEMENT FROM COLLATERAL
AGENT TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
JPMorgan Chase Bank,
as Purchase Contract Agent
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No:(000) 000-0000/8175
Attention: Institutional Trust Services
Re: __________ Corporate MEDS of KeySpan Corporation (the
"Company")
__________ Treasury MEDS of the Company
Please refer to the Pledge Agreement dated as of May 6, 2002 (the
"Pledge Agreement"), by and among you, the Company, and The Bank of New York,
as Collateral Agent, Custodial Agent and Securities Intermediary. Unless
otherwise defined herein, terms defined in the Pledge Agreement are used
herein as defined therein.
In accordance with Section 5.05(d) of the Pledge Agreement, we hereby
notify you that as of 11:00 a.m. (New York City time) on the fourth Business
Day immediately preceding May 16, 2005 (the "Purchase Contract Settlement
Date"), we have received (i) $ _______________ in immediately available funds
paid in an aggregate amount equal to the Purchase Price due to the Company on
the Purchase Contract Settlement Date with respect to ________________
Corporate MEDS, (ii) $ ___________ in immediately available funds paid in an
aggregate amount equal to the Purchase Price due to the Company on the
Purchase Contract Settlement Date with respect to ______ Treasury MEDS and
(iii) based on the funds received set forth in clause (i) above, an aggregate
principal amount of $_________ of Pledged Notes are to be tendered for
purchase in the Final Remarketing.
The Bank of New York,
as Collateral Agent,
Dated:_______________ By:_______________________
Name:
Title:
EXHIBIT F
INSTRUCTION TO CUSTODIAL AGENT REGARDING
REMARKETING
The Bank of New York,
as Custodial Agent
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: Notes of KeySpan Corporation (the "Company")
The undersigned hereby notifies you in accordance with Section 5.07(c)
of the Pledge Agreement, dated as of May 6, 2002 (the "Pledge Agreement"),
among the Company, you, as Collateral Agent, Custodial Agent and Securities
Intermediary and JPMorgan Chase Bank, as the Purchase Contract Agent and as
attorney-in-fact for the holders of Corporate MEDS from time to time, that the
undersigned elects to deliver $______________ aggregate principal amount of
Separate Notes for delivery to the Remarketing Agent on the Business Day
immediately preceding the Initial Remarketing Date for remarketing pursuant to
Section 5.07(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 Separate Notes tendered
hereby. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent, to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions." The undersigned hereby instructs you, in the event of a
Failed Final Remarketing, upon receipt of the Separate Notes tendered herewith
from the Remarketing Agent, to deliver such Separate Notes 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 Separate 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, (ii) agrees
to be bound by the terms and conditions of Section 5.07(c) of the Pledge
Agreement and (iii) acknowledges and agrees that after 11:00 a.m. (New York
City time) on the fourth Business Day immediately preceding February 16, 2005,
such election shall
become an irrevocable election to have such Separate Notes remarketed in the
Initial Remarketing and, in the case of a Failed Initial Remarketing, in any
Interim Remarketing and the Final Remarketing, and that the Separate Notes
tendered herewith will only be returned in the event of a Failed Final
Remarketing.
Date:_____________
------------------------------------
By:_________________________________
Name:
Title:
Signature Guarantee:___________________
---------------------------
----------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
---------------------------
Address
---------------------------
---------------------------
A. PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name of the
person(s) set forth below and mailed to the address set forth below.
Name(s)
(Please Print)
Address
(Please Print)
(Zip Code)
(Tax Identification or Social Security Number)
B. DELIVERY INSTRUCTIONS
In the event of a failed final remarketing, Notes which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.
Name(s)
(Please Print)
Address
(Please Print)
(Zip Code)
(Tax Identification or Social Security Number)
In the event of a failed final remarketing, Notes which are in book-entry form
should be credited to the account at The Depository Trust Company set forth
below.
------------------
DTC Account Number
Name of Account Party:_________________________________
EXHIBIT G
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Bank of New York,
as Custodial Agent
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: Notes of KeySpan Corporation (the "Company")
The undersigned hereby notifies you in accordance with Section 5.07(c)
of the Pledge Agreement, dated as of May 6, 2002 (the "Pledge Agreement"),
among the Company and you, as Collateral Agent, Custodial Agent and Securities
Intermediary, and JPMorgan Chase Bank, as Purchase Contract Agent and as
attorney-in-fact for the holders of Corporate MEDS from time to time, that the
undersigned elects to withdraw the $_________ aggregate principal amount of
Separate Notes delivered to the Custodial Agent on _________, 200_ for
remarketing pursuant to Section 5.07(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
5.07(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
---------------------------
---------------------------
