EXHIBIT 4(z)
PROTECTIVE LIFE CORPORATION,
THE BANK OF NEW YORK
AND
THE CHASE MANHATTAN BANK
PLEDGE AGREEMENT
Dated as of November 26, 1997
TABLE OF CONTENTS
Page
RECITALS........................................................... 1
Section 1. Definitions........................................ 2
Section 2. Pledge; Control and Perfection...................... 7
Section 2.1. The Pledge.......................................... 7
Section 2.2. Control and Perfection.............................. 9
Section 3. Distributions on Pledged Collateral................. 10
Section 4. Substitution, Release, Repledge and Settle
ment of Preferred Securities................... 11
Section 4.1. Substitution of Preferred Securities and the
Establishment of Growth PRIDES................. 11
Section 4.2. Pledge of Preferred Securities and
Re-establishment of Income PRIDES................... 12
Section 4.3. Termination Event................................... 12
Section 4.4. Cash Settlement..................................... 13
Section 4.5. Early Settlement.................................... 14
Section 4.6. Application of Proceeds Settlement. ............... 15
Section 5. Voting Rights -- Preferred Securities............... 16
Section 6. Rights and Remedies................................. 17
Section 6.1. Rights and Remedies of the Collateral Agent......... 17
Section 6.2. Liquidation of the Trust............................ 18
Section 7. Representation and Warranties; Covenants............ 18
Section 7.1. Representations and Warranties...................... 18
Section 7.2. Covenants........................................... 20
Section 8. The Collateral Agent................................ 20
Section 8.1. Appointment, Powers and Immunities.................. 20
Section 8.2. Instructions of the Company......................... 21
Section 8.3. Reliance by Collateral Agent........................ 22
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Page
Section 8.4. Rights in Other Capacities.......................... 22
Section 8.5. Non-Reliance on Collateral Agent.................... 22
Section 8.6. Compensation and Indemnity.......................... 23
Section 8.7. Failure to Act...................................... 23
Section 8.8. Resignation of Collateral Agent..................... 24
Section 8.9. Right to Appoint Agent or Advisor................... 25
Section 8.10. Survival............................................ 25
Section 8.11. Indemnity........................................... 25
Section 9. Amendment........................................... 25
Section 9.1. Amendment Without Consent of Holders................ 25
Section 9.2. Amendment with Consent of Holders................... 26
Section 9.3. Execution of Amendments............................. 27
Section 9.4. Effect of Amendments................................ 27
Section 9.5. Reference to Amendments............................. 27
Section 10. Miscellaneous....................................... 28
Section 10.1. No Waiver........................................... 28
Section 10.2. Governing Law....................................... 28
Section 10.3. Notices............................................. 28
Section 10.4. Successors and Assigns.............................. 29
Section 10.5. Counterparts........................................ 29
Section 10.6. Severability........................................ 29
Section 10.7. Expenses, etc....................................... 29
Section 10.8. Security Interest Absolute.......................... 30
EXHIBIT A INSTRUCTION TO COLLATERAL AGENT
EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT
EXHIBIT C INSTRUCTION TO TRUST
ii
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of November 26, 1997 (this
"Agreement"), among Protective Life Corporation, a New Jersey
corporation (the "Company"), The Chase Manhattan Bank, a New
York banking corporation, not individually but solely as
collateral agent (in such capacity, together with its
successors in such capacity, the "Collateral Agent") and in
its capacity as a "securities intermediary" as defined in
Section 8-102(a)(14) of the Code (as defined herein) (in such
capacity, together with its successors in such capacity, the
"Securities Intermediary"), and The Bank of New York, a New
York banking corporation, not individually but solely as
purchase contract agent and as attorney-in-fact of the Holders
(as defined in the Purchase Contract Agreement) from time to
time of the Securities (as hereinafter defined) (in such
capacity, together with its successors in such capacity, the
"Purchase Contract Agent") under the Purchase Contract
Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties
to the Purchase Contract Agreement, dated as of the date
hereof (as modified and supplemented and in effect from time
to time, the "Purchase Contract Agreement"), pursuant to which
there may be issued up to 2,300,000 FELINE PRIDES (the
"Securities").
Each Security, at issuance, consists of a unit (the
"Income PRIDES") comprised of (a) one stock purchase contract
(the "Purchase Contract") under which (i) the Holder will
purchase from the Company on February 16, 2001, for an amount
equal to the Stated Amount, a number of newly issued shares of
Common Stock equal to the Settlement Rate, and (ii) the
Company will pay the Holder Contract Adjustment Payments, if
any, and (b) beneficial ownership of a 61/2% Trust Originated
Preferred Security (a "Preferred Security") issued by PLC
Capital Trust II (the "Trust"), having a liquidation amount
equal to $50 (the "Stated Amount") and maturing on February
16, 2003, unless settled earlier.
Pursuant to the terms of the Purchase Contract Agreement
and the Purchase Contracts, the Holders, from time to time, of
the Securities have irrevocably authorized the Purchase
Contract Agent, as attorney-in-fact of
such Holders, among other things, to execute and deliver this
Agreement on behalf of such Holders and to grant the pledge
provided hereby of the Preferred Securities and any Treasury
Securities (as defined below) delivered in exchange therefor
to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof.
Upon such pledge the Preferred Securities or the Treasury
Securities, as applicable, will be beneficially owned by the
Holders but will be owned of record by the Purchase Contract
Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the
Securities Intermediary and the Purchase Contract Agent, on
its own behalf and as attorney-in-fact of the Holders from
time to time of the Securities, agree as follows:
Section 1. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the
meanings assigned to them in this Article and include the
plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as
a whole and not to any particular Article, Section or
other subdivision;
(c) the following terms have the meanings assigned to
them in the Purchase Contract Agreement: (i)Act,(ii)
Agent,(iii) Board Resolution, (iv) Cash Settlement,(v)
Certificate,(vi) Common Stock,(vii) Contract Adjustment
Payments,(viii) Debentures, (ix) Early Settlement,(x)
Early Settlement Amount,(xi) Early Settlement Date,(xii)
Holder, (xiii) Opinion of Counsel,(xiv) Outstanding
Securities,(xv) Purchase Contract,(xvi) Purchase Contract
Settlement Date,(xvii) Purchase Price, (xviii)Repayment
Price,(xix) Settlement Rate,(xx) Termination Event, and
(xxi) Underwriting Agreement;
(d) the following term shall have the meaning
assigned to it in the Declaration: Institutional Trustee.
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"Agreement" means this instrument as originally executed
or as it may from time to time be supplemented or amended by
one or more agreements supplemental hereto entered into
pursuant to the applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States
Code, or any other law of the United States that from time to
time provides a uniform system of bankruptcy laws.
"Business Day" means any day other than a Saturday, a
Sunday or any other day on which banking institutions in The
City of New York (in the State of New York) are permitted or
required by any applicable law to close.
"Cash" means any coin or currency of the United States as
at the time shall be legal tender for payment of public and
private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1
hereof.
"Collateral Account" means the trust account (number
C24967) maintained at The Chase Manhattan Bank in the name
"The Bank of New York", as Purchase Contract Agent on behalf
of the holders of certain securities of PLC Capital Trust II,
Collateral Account subject to the security interest of The
Chase Manhattan Bank, as Collateral Agent, for the benefit of
Protective Life Corporation, as pledgee" and any successor
account.
"Collateral Agent" has the meaning specified in the first
paragraph of this Agreement.
"Company" means the Person named as the "Company" in the
first paragraph of this Agreement until a successor shall have
become such, and thereafter "Company" shall mean such
successor.
"Declaration" means the Amended and Restated Declaration
of Trust of the Trust, dated as of November 20, 1997, among
the Company as sponsor, the trustees named therein and the
holders from time to time of undivided beneficial interests in
the assets of the Trust.
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"Growth PRIDES" means a unit comprised of one Purchase
Contract and a 1/20 undivided beneficial ownership interest in
a Treasury Security that has been substituted for Preferred
Securities as collateral to secure the Holder's obligations
under such Purchase Contract.
"Intermediary" means any entity that in the ordinary
course of its business maintains securities accounts for
others and is acting in that capacity.
"Permitted Investments" means any one of the following
which shall mature on the next succeeding Business Day (i) any
evidence of indebtedness with an original maturity of 365 days
or less issued, or directly and fully guaranteed or insured,
by the United States of America or any agency or
instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support
thereof or such indebtedness constitutes a general obligation
of it); (ii) deposits, certificates of deposit or acceptances
with an original maturity of 365 days or less of any
institution which is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of
not less than US$ 200.0 million at the time of deposit; (iii)
investments with an original maturity of 365 days or less of
any Person that is fully and unconditionally guaranteed by a
bank referred to in clause (ii); (iv) repurchase agreements
and reverse repurchase agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the
United States Government or issued by any agency thereof and
backed by the full faith and credit of the United States
Government; (v) 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 or at least equal to "P-1"
by ▇▇▇▇▇'▇ Investors Service, Inc.; and (vi) investments in
money market funds registered under the Investment Company Act
of 1940, as amended, which have net assets of at least $200.0
million and at least 85.0% of whose assets consist of
securities and other obligations of the types described in
clauses (i) through (v) above.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organi-
4
zation or other entity or government or any agency or
political subdivision thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Preferred Securities" has the meaning specified
in Section 2.1 hereof.
"Pledged Treasury Securities" has the meaning specified
in Section 2.1 hereof.
"Preferred Securities" has the meaning specified in the
Recitals.
"Proceeds" means all interest, dividends, cash,
instruments, securities, financial assets (as defined in
Section 8-102(a)(9) of the Code) and other property from time
to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Collateral.
"Purchase Contract" has the meaning specified in the
Recitals.
"Purchase Contract Agent" has the meaning specified in
the first paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified
in the Recitals.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in
the first paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in
Section 8.102(a)(7) of the Code.
"Stated Amount" has the meaning specified in the
Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry
System maintained by the Federal Reserve Bank of New York
pursuant to the TRADES Regulations.
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"TRADES Regulations" means the regulations of the United
States Department of the Treasury, published at 31 C.F.R. Part
357, as amended from time to time. Unless otherwise defined
herein, all terms defined in the TRADES Regulations are used
herein as therein defined.
"Transfer" means, with respect to the Collateral and in
accordance with the instructions of the Collateral Agent, the
Purchase Contract Agent or the Holder, as applicable:
(i) in the case of Collateral consisting of securities
which cannot be delivered by book-entry or which the
parties agree are to be delivered in physical form,
delivery in appropriate physical form to the
recipient accompanied by any duly executed
instruments of transfer, assignments in blank,
transfer tax stamps and any other documents
necessary to constitute a legally valid transfer to
the recipient; and
(ii) in the case of Collateral consisting of securities
maintained in book-entry form, by causing a
Securities Intermediary to (i) credit a Securities
Entitlement with respect to such securities to a
securities account maintained by or on behalf of the
recipient; (ii) to issue a confirmation to the
recipient with respect to such credit and (iii) to
make appropriate notations in its books to reflect
the security interest of the recipient in such
securities.
"Treasury Security" means a zero-coupon U.S. Treasury
Security maturing on February 15, 2001 (Cusip Number 912820
A20) which are the principal strips of the 73/4% U.S. Treasury
Securities which mature on February 15, 2001.
"Trust" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any
date means, as to (i) a Preferred Security, the Stated Amount,
(ii) Cash, the face amount thereof and (iii) Treasury
Securities, the aggregate principal amount thereof at
maturity.
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Section 2. Pledge; Control and Perfection.
Section 2.1. The Pledge. The Holders from time to time,
acting through the Purchase Contract Agent, as their
attorney-in-fact, hereby pledge and grant to the Collateral
Agent, for the benefit of the Company, as collateral security
for the performance when due by such Holders of their
respective obligations under the related Purchase Contracts, a
security interest in (i) all of the right, title and interest
of such Holders (a) in the Preferred Securities now and
hereafter relating to the Securities and all Proceeds thereof
(including any Proceeds from the repayment of the Preferred
Securities by the Trust) and any Treasury Securities delivered
in exchange for such Preferred Securities in accordance with
Section 4 hereof, in each case that have been Transferred to
or received by the Collateral Agent and not released by the
Collateral Agent to such Holders under the provisions of this
Agreement, including any Preferred Securities transferred to
the Collateral Agent in the future pursuant to Section 4.2
hereof (the "Collateral"); (b) in payments made by Holders
pursuant to Section 4.4; (c) in the Collateral Account and all
securities, financial assets and other property credited
thereto and all Security Entitlements related thereto; (d) in
any Debentures delivered to the Collateral Agent upon a
liquidation of the Trust as provided in Section 6.2; and (e)
all proceeds of the foregoing. Prior to or concurrently with
the execution and delivery of this Agreement, the Purchase
Contract Agent, on behalf of the initial Holders of the Income
PRIDES, shall cause the Preferred Securities relating to the
Income PRIDES to be delivered to the Collateral Agent for the
benefit of the Company by physically delivering such
securities to the Securities Intermediary endorsed in blank
and causing the Securities Intermediary to credit the
Collateral Account with such securities and send the
Collateral Agent a confirmation of the deposit of such
securities. In the event a Holder of Income PRIDES so elects,
such Holder may Transfer Treasury Securities to the Collateral
Agent for the benefit of the Company in exchange for the
release by the Collateral Agent on behalf of the Company of
Preferred Securities to the Purchase Contract Agent on behalf
of such Holder. Treasury Securities shall be Transferred to
the Collateral Account maintained by the Collateral Agent at
the Securities Intermediary by book-entry transfer to the
Collateral Account in accordance with the TRADES Regulations
and other applicable law and by the notation
7
by the Securities Intermediary on its books that a Security
Entitlement with respect to such Treasury Securities has been
credited to the Collateral Account. For purposes of
perfecting the Pledge under applicable law, including, to the
extent applicable, the TRADES Regulations of the Uniform
Commercial Code as adopted and in effect in any applicable
jurisdiction, the Collateral Agent shall be the agent of the
Company as provided herein. The pledge provided in this
Section 2.1 is herein referred to as the "Pledge" and the
Preferred Securities (including Debentures that are pledged
pursuant to Section 6.2 hereof) or Treasury Securities subject
to the Pledge, excluding any Preferred Securities (including
Debentures that are pledged pursuant to Section 6.2 hereof) or
Treasury Securities released from the Pledge as provided in
Section 4 hereof, are hereinafter referred to as "Pledged
Preferred Securities" or the "Pledged Treasury Securities,"
respectively. Subject to the Pledge and the provisions of
Section 2.2 hereof, the Holders from time to time shall have
full beneficial ownership of the Collateral. Whenever
directed by the Collateral Agent acting on behalf of the
Company, the Securities Intermediary shall have the right to
reregister the Preferred Securities or any other securities
held in physical form in its name.
Except as may be required in order to release Preferred
Securities in connection with a Holder's election to convert
its investment from an Income Pride to a Growth Pride, or
except as otherwise required to release securities as
specified herein, the Collateral Agent shall not relinquish
physical possession of any certificate evidencing a Preferred
Security prior to the termination of this Agreement. If it
becomes necessary for the Collateral Agent to relinquish
physical possession of a certificate in order to release a
portion of the Preferred Securities evidenced thereby from the
Pledge, the Collateral Agent shall use its best efforts to
obtain physical possession of a replacement certificate
evidencing any Preferred Securities remaining subject to the
Pledge hereunder registered to it or endorsed in blank within
fifteen days of the date it relinquished possession. The
Collateral Agent shall promptly notify the Company of its
failure to obtain possession of any such replacement
certificate as required hereby.
Section 2.2. Control and Perfection. In connection with
the Pledge granted in Section 2.1, and subject to
8
the other provisions of this Agreement, the Holders from time
to time acting through the Purchase Contract Agent, as their
attorney-in-fact, hereby authorize and direct the Securities
Intermediary (without the necessity of obtaining the further
consent of the Purchase Contract Agent or any of the Holders),
and the Securities Intermediary agrees, to comply with and
follow any instructions and entitlement orders (as defined in
Section 8-102(a)(8) of the Code) that the Collateral Agent on
behalf of the Company may give in writing with respect to the
Collateral Account, the Collateral credited thereto and any
Security Entitlements with respect to any thereof. Such
instructions and entitlement orders may, without limitation,
direct the Securities Intermediary to transfer, redeem, sell,
liquidate, assign, deliver or otherwise dispose of the Pledged
Preferred Securities, the Pledged Treasury Securities and any
security entitlements with respect thereto and to pay and
deliver any income, proceeds or other funds derived therefrom
to the Company. The Holders from time to time, acting through
the Purchase Contract Agent, hereby further authorize and
direct the Collateral Agent, as agent of the Company, to
itself issue instructions and entitlement orders, and to
otherwise take action, with respect to the Collateral Account,
the Collateral credited thereto and any Security Entitlements
with respect to any thereof, pursuant to the terms and
provisions hereof, all without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the
Holders. The Collateral Agent shall be the agent of the
Company and shall act as directed in writing by the Company.
Without limiting the generality of the foregoing, the
Collateral Agent shall issue entitlement orders to the
Securities Intermediary when and as directed by the Company.
In order to assure that the Collateral Agent receives the
proceeds of any repayment/repurchase of the Pledged Preferred
Securities, the Purchase Contract Agent on behalf of the
Holders shall send the Trust a notice on the date hereof in
substantially the form of Exhibit C hereto and shall cause the
Trust to acknowledge and agree to the terms of such notice.
Whenever a Preferred Security has been released from the
Pledge created hereby in accordance with the terms hereof,
including without limitation pursuant to Section 4.1 hereof,
the Collateral Agent shall notify the Trust of the release of
such Preferred Securities. Whenever Preferred Securities are
repledged pursuant to Section 4.2 hereof, the Purchase
Contract Agent shall send the Trust a notice in substantially
the form of
9
Exhibit C hereto and shall cause the Trust to acknowledge and
agree to the terms of such notice.
Section 3. Distributions on Pledged Collateral. So
long as the Purchase Contract Agent is the registered owner of
the Pledged Preferred Securities it shall receive all payments
thereon. If the Pledged Preferred Securities are
reregistered, such that the Collateral Agent becomes the
registered holder, all payments of the Stated Amount of, or
cash distributions on, any Pledged Preferred Securities and
all payments of the principal of, or cash distributions on,
any Pledged Treasury Securities received by the Collateral
Agent that are properly payable hereunder shall be paid by the
Collateral Agent by wire transfer in same day funds:
(i) In the case of (A) cash distributions with
respect to Pledged Preferred Securities and (B) any
payments of the Stated Amount with respect to any
Preferred Securities that have been released from the
Pledge pursuant to Section 4.3 hereof, to the Purchase
Contract Agent, for the benefit of the relevant Holders
of Securities, to the account designated by the Purchase
Contract Agent for such purpose, no later than 2:00 p.m.,
New York City time, on the Business Day such payment is
received by the Collateral Agent (provided that in the
event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New
York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City
time, on the next succeeding Business Day);
(ii) In the case of any principal payments with
respect to any Treasury Securities that have been
released from the Pledge pursuant to Section 4.3 hereof,
to the Holders of the related Growth PRIDES to the
accounts designated by them in writing for such purpose
no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral
Agent (provided that in the event such payment is
received by the Collateral Agent on a day that is not a
Business Day or after 12:30 p.m., New York City time, on
a Business Day, then such payment shall be made no later
than 10:30 a.m., New York City time, on the next
succeeding Business Day); and
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(iii) In the case of payments of the Stated Amount of any
Pledged Preferred Securities or the principal of any Pledged
Treasury Securities, to the Company on the Purchase Contract
Settlement Date in accordance with the procedure set forth in
Section 4.6(a) or 4.6(b) hereof, as applicable, in full
satisfaction of the respective obligations of the Holders
under the related Purchase Contracts.
All payments received by the Purchase Contract Agent as
provided herein shall be applied by the Purchase Contract
Agent pursuant to the provisions of the Purchase Contract
Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount
on account of any Preferred Security that, at the time of such
payment, is a Pledged Preferred Security or a Holder of a
Growth PRIDES shall receive any payments of principal on
account of any Treasury Securities that, at the time of such
payment, are Pledged Treasury Securities, the Purchase
Contract Agent or such Holder shall hold the same as trustee
of an express trust for the benefit of the Company (and
promptly deliver the same over to the Company) for application
to the obligations of the Holders under the related Purchase
Contracts, and the Holders shall acquire no right, title or
interest in any such payments of Stated Amount or principal so
received.
Section 4. Substitution, Release, Repledge and
Settlement of Preferred Securities.
Section 4.1. Substitution of Preferred Securities and
the Establishment of Growth PRIDES. At any time on or prior
to the second Business Day immediately preceding the Purchase
Contract Settlement Date, a Holder of Income PRIDES shall have
the right to substitute Treasury Securities for the Pledged
Preferred Securities securing such Holder's obligations under
the Purchase Contract(s) comprising a part of its Income
PRIDES in integral multiples of 20 Income PRIDES by (a)
Transferring to the Collateral Agent Treasury Securities
having a Value equal to the Stated Amount of the Pledged
Preferred Securities to be released and (b) delivering the
related Income PRIDES to the Purchase Contract Agent,
accompanied by a notice, substantially in the form of Exhibit
B hereto, to the Purchase Contract Agent stating that such
Holder has Transferred Treasury Securities to the Collateral
Agent pursuant to clause (a) above (stating the Value of the
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Treasury Securities Transferred by such Holder) and requesting
that the Purchase Contract Agent instruct the Collateral Agent
to release from the Pledge the Pledged Preferred Securities
related to such Income PRIDES. The Purchase Contract Agent
shall instruct the Collateral Agent in the form provided in
Exhibit A. Upon receipt of Treasury Securities from a Holder
of Income PRIDES and the related instruction from the Purchase
Contract Agent, the Collateral Agent shall release such
Pledged Preferred Securities and shall promptly Transfer such
Pledged Preferred Securities, free and clear of any lien,
pledge or security interest created hereby, to the Purchase
Contract Agent.
Section 4.2. Pledge of Preferred Securities and
Re-establishment of Income PRIDES. At any time on or prior to
the second Business Day immediately preceding the Purchase
Contract Settlement Date, a Holder of Growth PRIDES shall have
the right to establish or reestablish Income PRIDES consisting
of Purchase Contracts and Preferred Securities in integral
multiples of 20 Growth PRIDES by (a) Transferring to the
Collateral Agent Preferred Securities having a Value equal to
the aggregate principal amount of the Pledged Treasury
Securities to be released and (b) delivering the related
Growth PRIDES to the Purchase Contract Agent, accompanied by a
notice, substantially in the form of Exhibit B hereto, to the
Purchase Contract Agent stating that such Holder has
Transferred Preferred Securities to the Collateral Agent
pursuant to clause (a) above (stating the Value of the
Preferred Securities transferred by such Holder) and
requesting that the Purchase Contract Agent instruct the
Collateral Agent to release from the Pledge the Pledged
Treasury Securities related to such Growth PRIDES. The
Purchase Contract Agent shall so instruct the Collateral Agent
in the form provided in Exhibit A. Upon receipt of the
Preferred Securities from such Holder and the instruction from
the Purchase Contract Agent, the Collateral Agent shall
release such Pledged Treasury Securities and shall promptly
Transfer such Pledged Treasury Securities, free and clear of
any lien, pledge or security interest created hereby, to the
Purchase Contract Agent.
Section 4.3. Termination Event. Upon receipt by the
Collateral Agent of written notice from the Company or the
Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from
the Pledge and shall promptly Transfer
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any Pledged Preferred Securities and Pledged Treasury
Securities to the Purchase Contract Agent for distribution to
the Holders of the Income PRIDES and the Growth PRIDES,
respectively, free and clear of any lien, pledge or security
interest or other interest created hereby.
If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code, and if the
Collateral Agent shall for any reason fail promptly to
effectuate the release and Transfer of all Pledged Preferred
Securities or of all Pledged Treasury Securities, as the case
may be, as provided by this Section 4.3, 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 4.3,
and shall deliver such opinion to the Collateral Agent within
ten days after the occurrence of such Termination Event, and
if (y) the Purchase Contract Agent shall be unable to obtain
such opinion within ten days after the occurrence of such
Termination Event or (z) the Collateral Agent shall continue,
after delivery of such opinion, to refuse to effectuate the
release and Transfer of all Pledged Preferred Securities or of
all Pledged Treasury Securities, as the case may be, as
provided in this Section 4.3, then the Purchase Contract Agent
shall within fifteen days after the occurrence of such
Termination Event commence an action or proceeding in the
court with jurisdiction of the Company's case under the
Bankruptcy Code seeking an order requiring the Collateral
Agent to effectuate the release and transfer of all Pledged
Preferred Securities or of all Pledged Treasury Securities, as
the case may be, as provided by this Section 4.3 or (ii)
commence an action or proceeding like that described in
subsection (i)(z) hereof within ten days after the occurrence
of such Termination Event.
Section 4.4. Cash Settlement. Upon receipt by the
Collateral Agent of (a) notice from the Purchase Contract
Agent prior to the Purchase Contract Settlement Date, as
provided in the Purchase Contract Agreement, that a Holder
elects to effect a Cash Settlement with respect to some or all
of such
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Holder's Purchase Contracts in accordance with the terms of
such Purchase Contracts and the Purchase Contract Agreement
and (b) payment by such Holder on or prior to 12:00 p.m., New
York City time, on the Business Day immediately preceding the
Purchase Contract Settlement Date, of the Purchase Price of
such Purchase Contracts by certified or cashiers' check
payable to or upon the order of the Company, or wire transfer
in immediately available funds, then the Collateral Agent
shall, upon the written direction of the Purchase Contract
Agent, promptly invest any Cash received from a Holder in
connection with a Cash Settlement in overnight Permitted
Investments that will mature on the Purchase Contract
Settlement Date. Upon the receipt of the proceeds of any such
investment, the Collateral Agent shall pay or deliver any
certified or cashiers' check received in an aggregate amount
equal to the Purchase Price to the Company on the Purchase
Contract Settlement Date. After payment of the Purchase Price
to the Company on the Purchase Contract Settlement Date, the
Collateral Agent shall release from the Pledge and promptly
Transfer to the Purchase Contract Agent Pledged Preferred
Securities or Pledged Treasury Securities with a Stated Amount
or principal amount, as the case may be, equal to the product
of the Stated Amount and the number of Purchase Contracts as
to which such Holder has elected to effect a Cash Settlement.
The Collateral Agent shall distribute, when received, any
funds in respect of the interest earned from any such
investment to the Purchase Contract Agent, for payment to the
relevant Holders.
Section 4.5. Early Settlement. Upon written notice to
the Collateral Agent by the Purchase Contract Agent that one
or more Holders of Securities have elected to effect Early
Settlement of their respective obligations under the Purchase
Contracts forming a part of such Securities in accordance with
such terms of the Purchase Contracts and the Purchase Contract
Agreement (setting forth the number of such Purchase Contracts
as to which such Holders have elected to effect Early
Settlement), and that the Purchase Contract Agent has received
from such Holders, and paid to the Company as confirmed in
writing by the Company, the related Early Settlement Amounts
pursuant to such terms of the Purchase Contracts and the
Purchase Contract Agreement and that all conditions to such
Early Settlement have been satisfied, then the Collateral
Agent shall release from the Pledge, (a) Pledged Preferred
Securities in the case of a Holder of Income PRIDES or (b)
Pledged Treasury Securities in the case of a Holder of Growth
PRIDES, in either case, with a Stated Amount or principal
amount, as applicable, equal
14
to the product of (i) the Stated Amount times (ii) the number
of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement and shall Transfer all such
Pledged Preferred Securities or Pledged Treasury Securities,
as the case may be, free and clear of the Pledge created
hereby, to the Purchase Contract Agent for the benefit of the
Holders.
Section 4.6. Application of Proceeds Settlement.
(a) In accordance with Section 5.4 of the Purchase Contract
Agreement, a Holder of Income PRIDES who does not make an
effective Cash Settlement or any Early Settlement of the
Purchase Contract(s) shall be deemed to have instructed the
Purchase Contract Agent, without any further instruction from
the Holder of the Income PRIDES: (a) to the extent that the
Debentures continue to remain the assets of the Trust, to
direct the Institutional Trustee to exercise its right as a
holder of Debentures to put the Debentures to the Company on
the Purchase Contract Settlement Date in accordance with
Section 2.8(2) of the Indenture or (b) to the extent that the
Collateral Agent has become the holder of the Debentures (as a
result of the termination of the Trust or otherwise), to
exercise the Collateral Agent's right as a holder of
Debentures to put the Debentures to the Company on the
Purchase Contract Settlement Date in accordance with Section
2.8.(2) of the Indenture. As provided in Section 5.4 of the
Purchase Contract Agreement, the consideration received from
the Company with respect to the put of the Debentures shall be
considered to be Proceeds of the Preferred Securities and as
such will be paid to the Collateral Agent as secured party
with respect to the Preferred Securities. The Collateral
Agent shall pay or deliver any certified or cashiers' checks
received in an aggregate amount equal to the Purchase Price to
the Company on the Purchase Contract Settlement Date, and such
amount shall be applied by the Company to the Purchase Price
for the Purchase Contracts. Any excess funds shall be
distributed by the Collateral Agent to the Purchase Contract
Agent for payment to the relevant Holders.
(b) In the event a Holder of Growth PRIDES has not made an
effective Cash Settlement or an Early Settlement of the
Purchase Contract(s) forming a part of its Growth PRIDES, such
Holder shall be deemed to have elected to pay for the shares
of Common Stock to be issued under such Purchase Contract(s)
from the Proceeds of the relat-
15
ed Pledged Treasury Securities. On the Business Day
immediately preceding the Purchase Contract Settlement Date,
the Collateral Agent shall, at the written direction of the
Purchase Contract Agent, invest the Cash Proceeds received by
the Collateral Agent from the matured Pledged Treasury
Securities in overnight Permitted Investments. Without
receiving any instruction from the Holder of Growth PRIDES,
the Collateral Agent shall apply the Proceeds of such
investment 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 and the investment earnings from
the investment of such Proceeds in overnight Permitted
Investments is in excess of the aggregate Purchase Price of
the Purchase Contracts being settled thereby, the Collateral
Agent shall distribute such excess, when received, to the
Purchase Contract Agent for payment to the Holders of the
related Purchase Contracts.
Section 5. Voting Rights -- Preferred Securities. The
Purchase Contract Agent may exercise, or refrain from
exercising, any and all voting and other consensual rights
pertaining to the Pledged Preferred Securities or any part
thereof for any purpose not inconsistent with the terms of
this Agreement and in accordance with the terms of the
Purchase Contract Agreement; provided, that the Purchase
Contract Agent shall not exercise or, as the case may be,
shall not refrain from exercising such right if, in the
judgment of the Company, such action would impair or otherwise
have a material adverse effect on the value of all or any of
the Pledged Preferred Securities; and provided, further, that
the Purchase Contract Agent shall give the Company and the
Collateral Agent at least five days' prior written notice of
the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of
any notices and other communications in respect of any Pledged
Preferred Securities, including notice of any meeting at which
holders of Preferred Securities are entitled to vote or
solicitation of consents, waivers or proxies of holders of
Preferred Securities, the Collateral Agent shall use
reasonable efforts to send promptly to the Purchase Contract
Agent such notice or communication, and as soon as reasonably
practicable after receipt of a written request therefor from
the Purchase Contract Agent, execute and deliver to the
Purchase Contract Agent
16
such proxies and other instruments in respect of such Pledged
Preferred Securities (in form and substance satisfactory to
the Collateral Agent) as are prepared by the Purchase Contract
Agent with respect to the Pledged Preferred Securities.
Section 6. Rights and Remedies.
Section 6.1. Rights and Remedies of the Collateral
Agent. (a) The Collateral Agent shall have all of the rights
and remedies with respect to the Collateral of a secured party
under the Uniform Commercial Code as in effect in the State of
New York (the "Code") (whether or not the Code is in effect in
the jurisdiction where the rights and remedies are asserted),
and the TRADES Regulations and such additional rights and
remedies to which a secured party is entitled under the laws
in effect in any jurisdiction where any rights and remedies
hereunder may be asserted.
(b) Without limiting any rights or powers otherwise
granted by this Agreement to the Collateral Agent, in the
event the Collateral Agent is unable to make payments to the
Company on account of principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof in
satisfaction of the obligations of the Holder of the
Securities to which such Pledged Treasury Securities relate
under the related Purchase Contracts, the Collateral Agent
shall have and may exercise, with reference to such Pledged
Treasury Securities and such obligations of such Holder, any
and all of the rights and remedies available to a secured
party under the Code and the TRADES Regulations after default
by a debtor, and as otherwise granted herein or under any
other law.
(c) Without limiting any rights or powers otherwise
granted by this Agreement to the Collateral Agent, the
Collateral Agent is hereby irrevocably authorized to receive
and collect all payments of (i) the Stated Amount of, or cash
distributions on, the Pledged Preferred Securities, or (ii)
the principal of the Pledged Treasury Securities, subject, in
each case, to the provisions of Section 3, and as otherwise
granted herein.
(d) The Purchase Contract Agent and each Holder of
Securities agrees that, from time to time, upon the written
request of the Collateral Agent, the Purchase Contract Agent
or such Holder shall execute and deliver
17
such further documents and do such other acts and things as
the Collateral Agent may reasonably request in order to
maintain the Pledge, and the perfection and priority thereof,
and to confirm the rights of the Collateral Agent hereunder.
The Purchase Contract Agent shall have no liability to any
Holder for executing any documents or taking any such acts
requested by the Collateral Agent hereunder, except for
liability for its own negligent act, its own negligent failure
to act or its own willful misconduct.
Section 6.2. Liquidation of the Trust. Upon the
liquidation of the Trust and after satisfaction of liabilities
to creditors of the Trust, if any, an aggregate principal
amount of the Debentures constituting the assets of the Trust
and underlying the Preferred Securities equal to the
aggregated Stated Amount of the Pledged Preferred Securities
shall be delivered to the Collateral Agent in exchange for the
Pledged Preferred Securities. In the event the Collateral
Agent receives such Debentures in respect of Pledged Preferred
Securities upon a liquidation of the Trust, the Collateral
Agent shall Transfer such Debentures to the Collateral Account
in the manner specified herein for Pledged Preferred
Securities to secure the obligations of the Holders of the
related Income PRIDES to purchase Common Stock under the
related Purchase Contracts. Thereafter, the Collateral Agent
shall have such security interests, rights and obligations
with respect to such Debentures as it had in respect of the
Pledged Preferred Securities as provided in Articles II, III,
IV, V and VI hereof.
Section 7. Representation and Warranties; Covenants.
Section 7.1. Representations and Warranties. The
Holders from time to time, acting through the Purchase
Contract Agent as their attorney-in-fact (it being understood
that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder),
hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on
each day a Holder Transfers Collateral to the Collateral Agent
that:
(a) such Holder has the power to grant a security
interest in and lien on the Collateral being
transferred to the Collat-
18
eral Agent to secure such Holder's obligations under the
related Purchase Contract(s);
(b) such Holder, in the case of Collateral
delivered in physical form, is the sole holder
of such Collateral and is the sole beneficial
owner of, or has the right to Transfer, the
Collateral it Transfers to the Collateral
Agent, free and clear of any security interest,
lien, encumbrance, calls, liabilities to pay
money or other restrictions other than the
security interest and lien granted under
Section 2 hereof;
(c) upon the Transfer of such Collateral to the
Collateral Account, the Collateral Agent, for
the benefit of the Company, will have a valid
and perfected first priority security interest
therein (assuming that any central clearing
operation or any Intermediary or other entity
not within the control of the Holder involved
in the Transfer of the Collateral, including
the Collateral Agent, gives the notices and
takes the action required of it hereunder and
under applicable law for perfection of that
interest and assuming the establishment and
exercise of control pursuant to Section 2.2
hereof); and
(d) the execution and performance by such Holder of
its obligations under this Agreement will not
result in the creation of any security
interest, lien or other encumbrance on such
Collateral other than the security interest and
lien granted under Section 2 hereof or violate
any provision of any existing law or regulation
applicable to it or of any mortgage, charge,
pledge, indenture, contract or undertaking to
which it is a party or which is binding on it
or any of its assets.
Section 7.2. Covenants. The Holders from time to time,
acting through the Purchase Contract Agent as their
19
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.
Section 8. The Collateral Agent. It is hereby agreed as
follows:
Section 8.1. Appointment, Powers and Immunities. The
Collateral Agent shall act as agent for the Company hereunder
with such powers as are specifically vested in the Collateral
Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. The Collateral
Agent: (a) shall have no duties or responsibilities except
those expressly set forth in this Agreement and no implied
covenants or obligations shall be inferred from this Agreement
against the Collateral Agent, nor shall the Collateral Agent
be bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof; (b) shall not be
responsible for any recitals contained in this Agreement, or
in any certificate or other document referred to or provided
for in, or received by it under, this Agreement, the
Securities or the Purchase Contract Agreement, or for the
value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement (other than as against the
Collateral Agent), the Securities or the Purchase Contract
Agreement or any other document referred to or provided for
herein or therein or for any failure by the Company or any
other Person (except the Collateral
20
Agent) to perform any of its obligations hereunder or
thereunder or for the perfection, priority or, except as
expressly required hereby, maintenance of any security
interest created hereunder; (c) shall not be required to
initiate or conduct any litigation or collection proceedings
hereunder (except pursuant to directions furnished under
Section 8.2 hereof, subject to Section 8.6 hereof); (d) shall
not be responsible for any action taken or omitted to be taken
by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith
or therewith, except for its own negligence or willful
misconduct; and (e) shall not be required to advise any party
as to selling or retaining, or taking or refraining from
taking any action with respect to, any securities or other
property deposited hereunder. Subject to the foregoing,
during the term of this Agreement, the Collateral Agent shall
take all reasonable action in connection with the safekeeping
and preservation of the Collateral hereunder.
No provision of this Agreement shall require the
Collateral Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent be
liable for any amount in excess of the Value of the
Collateral. Notwithstanding the foregoing, the Collateral
Agent and Securities Intermediary in its individual capacity
hereby waive any right of setoff, bankers lien, liens or
perfection rights as securities intermediary or any
counterclaim with respect to any of the Collateral.
Section 8.2. Instructions of the Company. The Company
shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, to direct the
time, method and place of conducting any proceeding for the
realization of any right or remedy available to the Collateral
Agent, or of exercising any power conferred on the Collateral
Agent, or to direct the taking or refraining from taking of
any action authorized by this Agreement; provided, however,
that (i) such direction shall not conflict with the provisions
of any law or of this Agreement and (ii) the Collateral Agent
shall be adequately indemnified as provided herein. Nothing
in this Section 8.2 shall impair the right of the Collateral
Agent in its discretion to take any action or omit to take any
action which it deems proper and which is not inconsistent
with such direction.
21
Section 8.3. Reliance by Collateral Agent. Each of the
Securities Intermediary and the Collateral Agent shall be
entitled to rely upon any certification, order, judgment,
opinion, notice or other communication (including, without
limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person
or Persons (without being required to determine the
correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the
Collateral Agent and the Securities Intermediary. As to any
matters not expressly provided for by this Agreement, the
Collateral Agent and the Securities Intermediary shall in all
cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions given by the
Company in accordance with this Agreement.
Section 8.4. Rights in Other Capacities. The Collateral
Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept
deposits from, lend money to, make their investments in and
generally engage in any kind of banking, trust or other
business with the Purchase Contract Agent and any Holder of
Securities (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent,
and the Collateral Agent and its 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 and the Collateral Agent covenants and agrees
with the Company that it shall not accept, receive or permit
there to be created in favor of itself and shall take no
affirmative action to permit there to be created in favor of
any other Person, any security interest, lien or other
encumbrance of any kind in or upon the Collateral.
Section 8.5. Non-Reliance on Collateral Agent. Neither
the Securities Intermediary nor the Collateral Agent shall be
required to keep itself informed as to the performance or
observance by the Purchase Contract Agent or any Holder of
Securities of this Agreement, the Purchase Contract Agreement,
the Securities or any other document referred to or provided
for herein or therein or to inspect the properties or books of
the Purchase Contract Agent or any Holder of Securities. The
Collateral Agent shall not have any duty or responsibility to
pro-
22
vide 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 or the Securities Intermediary or any
of their respective affiliates.
Section 8.6. Compensation and Indemnity. The Company
agrees: (i) to pay the Collateral Agent from time to time such
compensation as shall be agreed in writing between the Company
and the Collateral Agent for all services rendered by it
hereunder and (ii) to indemnify the Collateral Agent and the
Securities Intermediary for, and to hold each of them harmless
from and against, any loss, liability or expense incurred
without negligence, willful misconduct or bad faith on its
part, arising out of or in connection with the acceptance or
administration of its powers and duties under this Agreement,
including the costs and expenses (including reasonable fees
and expenses of counsel) of defending itself against any claim
or liability in connection with the exercise or performance of
such powers and duties.
Section 8.7. Failure to Act. In the event of any
ambiguity in the provisions of this Agreement or any dispute
between or conflicting claims by or among the parties hereto
and/or any other Person with respect to any funds or property
deposited hereunder, the Collateral Agent shall be entitled,
after prompt notice to the Company and the Purchase Contract
Agent, at its sole option, to refuse to comply with any and
all claims, demands or instructions with respect to such
property or funds so long as such dispute or conflict shall
continue, and the Collateral Agent 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 shall be entitled to
refuse to act until either (i) such conflicting or adverse
claims or demands shall have been finally determined by a
court of competent jurisdiction or settled by agreement
between the conflicting parties as evidenced in a writing,
satisfactory to the Collateral Agent or (ii) the Collateral
Agent shall have received security or an indemnity
satisfactory to the Collateral Agent sufficient to save the
Collateral Agent harmless from and against any and all loss,
liability or expense which the Collateral Agent may incur by
reason of its acting. The Col-
23
lateral Agent may in addition elect to commence an
interpleader action or seek other judicial relief or orders as
the Collateral Agent may deem necessary. Notwithstanding
anything contained herein to the contrary, the Collateral
Agent shall not be required to take any action that is in its
opinion contrary to law or to the terms of this Agreement, or
which would in its opinion subject it or any of its officers,
employees or directors to liability.
Section 8.8. Resignation of Collateral Agent. Subject
to the appointment and acceptance of a successor Collateral
Agent as provided below, (a) the Collateral Agent may resign
at any time by giving notice thereof to the Company and the
Purchase Contract Agent as attorney-in-fact for the Holders of
Securities, (b) the Collateral Agent may be removed at any
time by the Company and (c) if the Collateral Agent fails to
perform any of its material obligations hereunder in any
material respect for a period of not less than 20 days after
receiving written notice of such failure by the Purchase
Contract Agent and such failure shall be continuing, the
Collateral Agent may be removed by the Purchase Contract
Agent. The Purchase Contract Agent shall promptly notify the
Company of any removal of the Collateral Agent pursuant to
clause (c) of the immediately preceding sentence. Upon any
such resignation or removal, the Company shall have the right
to appoint a successor Collateral Agent. If no successor
Collateral Agent shall have been so appointed and shall have
accepted such appointment within 30 days after the retiring
Collateral Agent's giving of notice of resignation or such
removal, then the retiring Collateral Agent may petition any
court of competent jurisdiction for the appointment of a
successor Collateral Agent. The Collateral Agent shall be a
bank which has an office in New York, New York with a combined
capital and surplus of at least $50,000,000. Upon the
acceptance of any appointment as Collateral Agent hereunder by
a successor Collateral Agent, such successor Collateral Agent
shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall take
all appropriate action to transfer any money and property held
by it hereunder (including the Collateral) to such successor
Collateral Agent. The retiring Collateral Agent shall, upon
such succession, be discharged from its duties and obligations
as Collateral Agent hereunder. After any retiring Collateral
Agent's resignation hereunder as Collateral Agent, the
provisions
24
of this Section 8 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it
while it was acting as the Collateral Agent.
Section 8.9. Right to Appoint Agent or Advisor. The
Collateral Agent shall have the right to appoint agents or
advisors in connection with any of its duties hereunder, and
the Collateral Agent shall not be liable for any action taken
or omitted by, or in reliance upon the advice of, such agents
or advisors selected in good faith. The appointment of agents
pursuant to this Section 8.9 shall be subject to prior consent
of the Company, which consent shall not be unreasonably
withheld.
Section 8.10. Survival. The provisions of this Section
8 shall survive termination of this Agreement and the
resignation or removal of the Collateral Agent.
Section 8.11. Indemnity. Anything in this Agreement to
the contrary notwithstanding, in no event shall the Collateral
Agent or the Securities Intermediary or their officers,
employees or agents be liable under this Agreement to any
third party for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known
to the Collateral Agent or the Securities Intermediary, or any
of them, incurred without any act or deed that is found to be
attributable to gross negligence on the part of the Collateral
Agent or the Securities Intermediary.
Section 9. Amendment.
Section 9.1. Amendment Without Consent of Holders.
Without the consent of any Holders, the Company, the
Collateral Agent 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 and the
Purchase Contract Agent, for any of the following purposes:
(1) to evidence the succession of another Person to
the Company, and the assumption by any such successor of
the covenants of the Company; or
(2) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or
power herein conferred upon the Company so
25
long as such covenants or such surrender do not adversely
affect the validity, perfection or priority of the security
interests granted or created hereunder; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Collateral Agent,
Securities Intermediary or Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement
any provisions herein which may be mistaken or
inconsistent with any other such provisions herein, or to
make any other provisions with respect to such matters or
questions arising under this Agreement, provided such
action shall not materially adversely affect the
interests of the Holders.
Section 9.2. Amendment with Consent of Holders. With
the consent of the Holders of not less than 662/3% of the
Purchase Contracts at the time outstanding, by Act of said
Holders delivered to the Company, the Purchase Contract Agent
or the Collateral Agent, as the case may be, the Company, when
authorized by a Board Resolution, the Purchase Contract Agent
and the Collateral Agent may amend this Agreement for the
purpose of modifying in any manner the provisions of this
Agreement or the rights of the Holders in respect of the
Securities; provided, however, that no such supplemental
agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the amount or type of Collateral
underlying a Security (except for the rights of holders
of Income PRIDES to substitute Treasury Securities for
the Pledged Preferred Securities or the rights of Holders
of Growth PRIDES to substitute Preferred Securities for
Pledged Treasury Securities), impair the right of the
Holder of any Security to receive distributions on the
underlying Collateral or otherwise adversely affect the
Holder's rights in or to such Collateral; or
(2) otherwise effect any action that would require
the consent of the Holder of each Outstanding Security
affected thereby pursuant to the Purchase Contract
Agreement if such action were effected by an agreement
supplemental thereto; or
26
(3) reduce the percentage of Purchase Contracts the
consent of whose Holders is required for any such
amendment; or
(4) materially and adversely alter the rights of the
holders of Preferred Securities.
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 9.3. Execution of Amendments. In executing any
amendment permitted by this Section, the Collateral Agent and
the Purchase Contract Agent shall be entitled to receive and
(subject to Section 6.1 hereof, with respect to the Collateral
Agent, and Section 7.1 of the Purchase Contract Agreement,
with respect to the Purchase Contract Agent) shall be fully
protected in relying upon, an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by
this Agreement and that all conditions precedent, if any, to
the execution and delivery of such amendment have been
satisfied.
Section 9.4. Effect of Amendments. Upon the execution
of any amendment under this 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 9.5. Reference to Amendments. Security
Certificates authenticated, executed on behalf of the Holders
and delivered after the execution of any amendment pursuant to
this Section may, and shall if required by the Collateral
Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral
Agent as to any matter provided for in such amendment. If the
Company shall so determine, new Security Certificates so
modified as to conform, in the opinion of the Collateral
Agent, the Purchase Contract Agent and the Company, to any
such amendment may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered
by the Purchase Contract Agent in accordance
27
with the Purchase Contract Agreement in exchange for
Outstanding Security Certificates.
Section 10. Miscellaneous.
Section 10.1. No Waiver. No failure on the part of the
Collateral Agent or any of its agents to exercise, and no
course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the
Collateral Agent or any of its agents of any right, power or
remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of
any remedies provided by law.
Section 10.2. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. Without limiting the foregoing, the above
choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent and the Holders from time
to time acting through the Purchase Contract Agent, as their
attorney-in-fact, in connection with the establishment and
maintenance of the Collateral Account. The Company, the
Collateral Agent and the Holders from time to time of the
Securities, acting through the Purchase Contract Agent as
their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court
sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or
the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the
Securities, acting through the Purchase Contract Agent as
their attorney-in-fact, irrevocably waive, to the fullest
extent permitted by applicable law, any objection which they
may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an
inconvenient forum.
Section 10.3. Notices. All notices, requests, consents
and other communications provided for herein (including,
without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in
writing (including, without limitation, by
28
telecopy) delivered to the intended recipient at the "Address
for Notices" specified below its name on the signature pages
hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
Section 10.4. Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the
Collateral Agent and the Purchase Contract Agent, and the
Holders from time to time of the Securities, by their
acceptance of the same, shall be deemed to have agreed to be
bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.
Section 10.5. Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any
of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 10.6. Severability. If any provision hereof is
invalid and unenforceable in any jurisdiction, then, to the
fullest extent permitted by law, (i) the other provisions
hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to
carry out the intentions of the parties hereto as nearly as
may be possible and (ii) the invalidity or unenforceability of
any provision hereof in any jurisdiction shall not affect the
validity or enforceability of such provision in any other
jurisdiction.
Section 10.7. Expenses, etc. The Company agrees to
reimburse the Collateral Agent for: (a) all reasonable
out-of-pocket costs and expenses of the Collateral Agent
(including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent), in connection
with (i) the negotiation, preparation, execution and delivery
or performance of this Agreement and (ii) any modification,
supplement or waiver of any of the terms of this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation,
29
reasonable fees and expenses of counsel) in connection with
(i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy
its obligations under the Purchase Contracts forming a part of
the Securities and (ii) the enforcement of this Section 10.7;
and (c) all transfer, stamp, documentary or other similar
taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other
document referred to herein and all costs, expenses, taxes,
assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security
interest contemplated hereby.
Section 10.8. Security Interest Absolute. All rights of
the Collateral Agent and security interests hereunder, and all
obligations of the Holders from time to time hereunder, shall
be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any
provision of the Purchase Contracts or the Securities or
any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of
payment of, or any other term of, or any increase in the
amount of, all or any of the obligations of Holders of
Securities under the related Purchase Contracts, or any
other amendment or waiver of any term of, or any consent
to any departure from any requirement of, the Purchase
Contract Agreement or any Purchase Contract or any other
agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise
constitute a defense available to, or discharge of, a
borrower, a guarantor or a pledgor.
30
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first
above written.
Protective Life Corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President,
Secretary and General Counsel
Address for Notices:
Protective Life Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Bank of New York
as Purchase Contract Agent and
as attorney-in-fact of the Holders
from time to time of the Securities
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice President
Address for Notices:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Corporate Trust Administration
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Derivatives Products
Unit
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Chase Manhattan Bank
as Collateral Agent and as Securities
Intermediary
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇'▇▇▇▇▇
Title: Senior Trust Officer
Address for Notices:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration
Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration Department
Re: FELINE PRIDES of Protective Life Corporation (the
"Company"), and PLC Capital Trust II
We hereby notify you in accordance with Section 4.1 of
the Pledge Agreement, dated as of ______ __, 1997, (the "Pledge
Agreement") among the Company, yourselves, as Collateral Agent,
and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Income PRIDES] [Growth PRIDES] from time to
time, that the holder of securities listed below (the "Holder")
has elected to substitute [$_____ aggregate principal amount of
Treasury Securities] [$_______Stated Amount of Preferred
Securities] in exchange for an equal Value of [Pledged Preferred
Securities] [Pledged Treasury Securities] held by you in
accordance with the Pledge Agreement and has delivered to us a
notice stating that the Holder has Transferred [Treasury
Securities] [Preferred Securities] to you, as Collateral Agent.
We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Preferred Securities], to release the
[Preferred Securities] [Treasury Securities] related to such
[Income PRIDES] [Growth PRIDES] to us in accordance with the
Holder's instructions. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Date:_____________ THE BANK OF NEW YORK
By:______________________
Name:
Title:
Please print name and address of Registered Holder electing to
substitute [Treasury Securities] [Preferred Securities] for the
[Pledged Preferred Securities] [Pledged Treasury Securities]:
___________________________ _________________________
Name Social Security or other
Taxpayer Identification
___________________________ Number, if any
Address
___________________________
___________________________
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Re: FELINE PRIDES of PROTECTIVE LIFE CORPORATION (the
"Company"), and PLC Capital Trust II
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent,
$_______ aggregate [principal amount] [Stated Amount] of
[Treasury Securities] [Preferred Securities] in exchange for an
equal Value of [Pledged Preferred Securities] [Pledged Treasury
Securities] held by the Collateral Agent (the "Pledge
Agreement"), in accordance with Section 4.1 of the Pledge
Agreement, dated ________ __, 1997, between you, the Company and
the Collateral Agent. The undersigned Holder hereby instructs
you to instruct the Collateral Agent to release to you on behalf
of the undersigned Holder the [Pledged Preferred Securities]
[Pledged Treasury Securities] related to such [Income PRIDES]
[Growth PRIDES]. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Dated:_____________ _________________________
Signature
Please print name and address of Registered Holder:
_________________________ _________________________
Name Social Security or other
Taxpayer Identification
_________________________ Number, if any
Address
_________________________
_________________________
_________________________
EXHIBIT C
____________, 1997
PLC Capital Trust II
Protective Life Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Reference is made to the ___ % Trust Originated
Preferred Securities identified on Schedule I hereto (the
"Preferred Securities") issued by you for which we, as agent (the
"Purchase Contract Agent") for certain holders of securities
issued by the Protective Life Corporation (the "Company") known
as FELINE PRIDES (the "Securities") are the record owner.
Pursuant to a Pledge Agreement dated as of ___________, 1997
among the Company, The Chase Manhattan Bank as collateral agent
for the benefit of the Company (the "Collateral Agent") and the
Purchase Contract Agent, we have this date pledged the Preferred
Securities to the Collateral Agent as security for the
obligations of the holders of the Securities to the Company. You
are hereby instructed that in the event of a repurchase by you of
the Preferred Securities, the proceeds thereof should be paid by
you to the Collateral Agent for all such Preferred Securities
except for any Preferred Securities for which you have received
written notice from the Collateral Agent that such Preferred
Securities have been released from the pledge of the Pledge
Agreement.
Very truly yours,
THE BANK OF NEW YORK,
as Purchase Contract Agent
BY:___________________
AGREED AND ACKNOWLEDGED
PLC Capital Trust II
BY: _____________________________
