Exhibit 4(bp)


 




 





 


FPL GROUP, INC.,

as Pledgee


 


                   ,


as Collateral Agent,
Custodial Agent

and Securities Intermediary,


 


AND


 


 


THE BANK OF NEW
YORK MELLON,

as Purchase Contract Agent


 


 


PLEDGE AGREEMENT


 


 


DATED AS OF    




 


 





 

















 


TABLE OF
CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  RECITALS

  	
   

  	
  1

  
	
  ARTICLE I. DEFINITIONS

  	
  2

  
	
  ARTICLE II. PLEDGE;
  CONTROL AND PERFECTION

  	
  6

  
	
  SECTION 2.1

  	
  The Pledge

  	
  6

  
	
  SECTION 2.2

  	
  Control and Perfection

  	
  7

  
	
  ARTICLE III.
  DISTRIBUTIONS ON PLEDGED COLLATERAL

  	
  8

  
	
  ARTICLE
  IV. SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF DEBENTURES

  	
  10

  
	
  SECTION 4.1

  	
  Substitution for
  Debentures and the Creation of Treasury Units

  	
  10

  
	
  SECTION 4.2

  	
  Substitution for
  Treasury Securities and the Creation of Corporate Units

  	
  11

  
	
  SECTION 4.3

  	
  Termination Event

  	
  13

  
	
  SECTION 4.4

  	
  Cash Settlement

  	
  14

  
	
  SECTION 4.5

  	
  Early Settlement;
  Fundamental Change Early Settlement

  	
  15

  
	
  SECTION 4.6

  	
  Application of Proceeds
  Settlement

  	
  16

  
	
  ARTICLE V. VOTING
  RIGHTS — DEBENTURES

  	
  18

  
	
  ARTICLE
  VI. RIGHTS AND REMEDIES; DISTRIBUTION OF THE DEBENTURES; SPECIAL EVENT REDEMPTION;
  REMARKETING

  	
  19

  
	
  SECTION 6.1

  	
  Rights and Remedies of
  the Collateral Agent

  	
  19

  
	
  SECTION 6.2

  	
  Special Event
  Redemption; Mandatory Redemption; Remarketing

  	
  20

  
	
  SECTION 6.3

  	
  Remarketing During the
  Period for Early Remarketing

  	
  21

  
	
  SECTION 6.4

  	
  Substitutions

  	
  22

  
	
  ARTICLE VII.
  REPRESENTATIONS AND WARRANTIES; COVENANTS

  	
  22

  
	
  SECTION 7.1

  	
  Representations and
  Warranties

  	
  22

  
	
  SECTION 7.2

  	
  Covenants

  	
  23

  
	
  ARTICLE VIII. THE
  COLLATERAL AGENT

  	
  23

  
	
  SECTION 8.1

  	
  Appointment, Powers and
  Immunities

  	
  23

  
	
  SECTION 8.2

  	
  Instructions of the
  Company

  	
  24

  
	
  SECTION 8.3

  	
  Reliance

  	
  24

  
	
  SECTION 8.4

  	
  Rights in Other
  Capacities

  	
  25

  
	
  SECTION 8.5

  	
  Non-Reliance

  	
  25

  
	
  SECTION 8.6

  	
  Compensation and
  Indemnity

  	
  25

  
	
  SECTION 8.7

  	
  Failure to Act

  	
  26

  
	
  SECTION 8.8

  	
  Resignation of
  Collateral Agent

  	
  26

  
	
  SECTION 8.9

  	
  Right to Appoint Agent
  or Advisor

  	
  27

  
	
  SECTION 8.10

  	
  Survival

  	
  27

  
	
  SECTION 8.11

  	
  Exculpation

  	
  27

  
	
  ARTICLE IX. AMENDMENT

  	
  28

  
	
  SECTION 9.1

  	
  Amendment Without
  Consent of Holders

  	
  28

  
	
  SECTION 9.2

  	
  Amendment with Consent
  of Holders

  	
  28

  
	
  SECTION 9.3

  	
  Execution of Amendments

  	
  29

  



 

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 9.4

  	
  Effect of Amendments

  	
  29

  
	
  SECTION 9.5

  	
  Reference to Amendments

  	
  30

  
	
  ARTICLE X.
  MISCELLANEOUS

  	
  30

  
	
  SECTION 10.1

  	
  No Waiver

  	
  30

  
	
  SECTION 10.2

  	
  Governing Law

  	
  30

  
	
  SECTION 10.3

  	
  Notices

  	
  31

  
	
  SECTION 10.4

  	
  Successors and Assigns

  	
  31

  
	
  SECTION 10.5

  	
  Counterparts

  	
  31

  
	
  SECTION 10.6

  	
  Separability

  	
  31

  
	
  SECTION 10.7

  	
  Expenses, etc.

  	
  31

  
	
  SECTION 10.8

  	
  Security Interest
  Absolute

  	
  32

  
	
   

  	
   

  
	
  EXHIBIT A

  	
  Instruction From
  Purchase Contract Agent To Collateral Agent

  	
  A-1

  
	
  EXHIBIT B

  	
  Instruction To Purchase
  Contract Agent

  	
  B-1

  
	
  EXHIBIT C

  	
  Instruction To
  Custodial Agent Regarding Remarketing

  	
  C-1

  
	
  EXHIBIT D

  	
  Instruction To
  Custodial Agent Regarding Withdrawal From Remarketing

  	
  D-1

  
				



 


ii

















 


PLEDGE AGREEMENT, dated as of                    
(this “Agreement”), by and among FPL Group, Inc.,
a Florida corporation (the “Company”), as
pledgee,                    ,
a                    
banking corporation, not individually but solely as collateral agent (in such
capacity, together with its successors in such capacity, the “Collateral  Agent”), as
custodial agent (in such capacity, together with its successors in such
capacity, the “Custodial  Agent”)
and as a “securities intermediary” as defined in Section 8-102(a)(14) of
the UCC (as defined herein) (in such capacity, together with its successors in
such capacity, the “Securities  Intermediary”), and The Bank of New York Mellon, a New York
banking corporation, not individually but solely as purchase contract agent and
as attorney-in-fact of the Holders of the Units (each as defined in the
Purchase Contract Agreement (as hereinafter defined)) from time to time of the
Equity Units (as hereinafter defined) (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 there may
be issued up to                    
units (referred to as “Equity Units”)  of the Company, having a stated amount of $50 (the “Stated Amount”) per Equity Unit.


 


The Equity Units will initially consist of                    
Corporate Units and 0 Treasury Units. 
Each Corporate Unit will initially be comprised of (a) a stock
purchase contract (as modified and supplemented and in effect from time to
time, a “Purchase Contract”) under which (i) the
Holder will purchase from the Company not later than                    
(“Purchase Contract Settlement Date”),
for $50 in cash, a number of newly-issued shares of common stock, $0.01 par
value per share, of the Company (“Common Stock”)
equal to the applicable Settlement Rate and (ii) the Company will pay
certain Contract Adjustment Payments to the Holders as provided in the Purchase
Contract Agreement, and (b) either (A) prior to the Purchase Contract
Settlement Date so long as no Special Event Redemption or Mandatory Redemption
has occurred, (i) the Applicable Ownership Interest in Debentures, such
debentures the Series        
Debentures (“Debentures”) issued by FPL Group
Capital Inc (“FPL Group Capital”), or (ii) following
a Successful Remarketing during the Period for Early Remarketing, the
Applicable Ownership Interest in the Treasury Portfolio, or (B) upon the
occurrence of a Special Event Redemption or a Mandatory Redemption (if the
Purchase Contracts have not been previously or concurrently terminated in
accordance with the Purchase Contract Agreement) prior to the Purchase Contract
Settlement Date, the Applicable Ownership Interest in the Treasury Portfolio.


 


Each Treasury Unit will initially be comprised of (a) a
Purchase Contract under which (i) the Holder will purchase from the
Company not later than the Purchase Contract Settlement Date, for $50 in cash,
a number of newly-issued shares of Common Stock equal to the applicable
Settlement Rate and (ii) the Company will pay certain Contract Adjustment
Payments to the Holders as provided in the Purchase Contract Agreement, and (b) a
1/20, or 5%, undivided beneficial ownership interest in a zero-coupon U.S.
Treasury security having a principal amount at maturity equal to $1,000 and
maturing on                    
(CUSIP No.                    
(“Treasury Security”).


 

















 


Pursuant to the terms of the Purchase Contract
Agreement, the Company may issue up to                    
additional Corporate Units and, if the Company issues such additional Corporate
Units, the related Applicable Ownership Interest in Debentures will be pledged
hereunder.


 


Pursuant to the terms of the Purchase Contract
Agreement and the Purchase Contracts, the Holders, from time to time, of the
Equity Units have irrevocably authorized the Purchase Contract Agent, as
attorney-in-fact of such Holders, among other things, to execute and deliver
this Agreement on behalf of and in the name of such Holders and to grant the
pledge provided hereby of the Applicable Ownership Interest in Debentures, any
Applicable Ownership Interest in the Treasury Portfolio and any Treasury
Securities to secure each Holder’s obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof.  Upon such pledge, the Debentures underlying
the Applicable Ownership Interest in Debentures will be beneficially owned by
the Holders but will be owned of record by the Purchase Contract Agent subject
to the Pledge hereunder, and the Treasury Securities (and the Applicable
Ownership Interest in the Treasury Portfolio) will be beneficially owned by the
Holders but will be held in book-entry form by the Securities Intermediary
subject to the Pledge.


 


Accordingly, the Company, the Collateral Agent, the
Securities Intermediary, the Custodial Agent and the Purchase Contract Agent,
on its own behalf and as attorney-in-fact of the Holders from time to time of
the Equity Units, agree as follows:


 


ARTICLE I.


 


DEFINITIONS


 


For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires (terms
not otherwise defined herein are used herein with the meaning ascribed to them
in the Purchase Contract Agreement):


 


(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, other subdivision or Exhibit ; and


 


(c)            the following terms have the meanings given to them in
this Article I:


 


“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 and trust companies in The City of New
York (in the State of New York) are permitted or required by any applicable
law, regulation or executive order to close.


 


2

















 


“Collateral”
means the collective reference to:


 


(a)            the Collateral Account and all securities, financial
assets, cash and other property credited thereto and all Security Entitlements
related thereto from time to time credited to the Collateral Account,
including, without limitation, (A) the Applicable Ownership Interests in
Debentures and security entitlements relating thereto (and the Debentures and
security entitlements relating thereto delivered to the Collateral Agent in
respect of such Applicable Ownership Interests in Debentures), (B) the
Applicable Ownership Interests in the Treasury Portfolio (as specified in
clause (i) of the definition of such term) and Security Entitlements
relating thereto, (C) any Treasury Securities and Security Entitlements
relating thereto Transferred to the Securities Intermediary from time to time
in connection with the creation of Treasury Units in accordance with Section 3.13 of the Purchase Contract
Agreement and (D) payments made by Holders pursuant to Section 4.4 hereof;


 


(b)           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


 


(c)            all powers and rights now owned or hereafter acquired
under or with respect to the Collateral.


 


“Collateral Account” means the securities account (number                    )
maintained at                    
in the name “The Bank of New York Mellon, as Purchase Contract Agent on behalf
of the Holders of Equity Units subject to the security interest of                    
as Collateral Agent under this Agreement, for the benefit of FPL Group, Inc.,
as pledgee” and any successor account.


 


“Collateral Agent” has the meaning specified in the first paragraph of
this Agreement.


 


“Common Stock” has the meaning specified in the Recitals.


 


“Company” means the Person named as the “Company”
in the first paragraph of this Agreement until a successor shall have become
such pursuant to the applicable provisions of this Agreement, and thereafter “Company” shall mean such successor.


 


“Custodial Agent” has the meaning specified in the first paragraph of
this Agreement.


 


“Debentures” has the meaning specified in the Recitals.


 


“Entitlement Orders” has the meaning specified in Section 8-102(a)(8) of
the UCC.


 


“Equity Units” has the meaning specified in the Recitals.


 


“FPL Group Capital” has the meaning specified in the Recitals.


 


“Indenture” means the Indenture (For Unsecured Debt Securities),
dated as of June 1, 1999, between FPL Group Capital and the Indenture
Trustee pursuant to which the Debentures are to be issued, as originally
executed and delivered and as it may from time to time 


 


3

















 


be supplemented or
amended by one or more indentures supplemental thereto entered into pursuant to
the applicable provisions thereof and shall include the terms of a particular
series of securities established as contemplated by Section 301
thereof.


 


“Indenture Trustee” means The Bank of New York Mellon, as trustee under
the Indenture, or any successor thereto.


 


“Permitted Investments” means any one of the following which
shall mature not later than the next succeeding Business Day (i) any
evidence of indebtedness with an original maturity of 365 days or less issued,
or directly and fully guaranteed or insured, by the United States of America or
any agency or instrumentality thereof (provided that the full faith and credit
of the United States of America is pledged in support thereof or such
indebtedness constitutes a 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 U.S. $200
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 an institution 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 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; (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 Service,
a Division of McGraw-Hill Companies, Inc. (“S&P”),
or at least equal to “P-1” by Moody’s Investors Service, Inc. (“Moody’s”); and (vi) 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 a legal person, including 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 or any other entity
of whatever nature.


 


“Pledge” has the meaning specified in Section 2.1
hereof.


 


“Pledged Applicable
Ownership Interests in Debentures” means the Applicable Ownership
Interests in Debentures and Security Entitlements with respect thereto from
time to time credited to the Collateral Account and not then released from the
Pledge.


 


“Pledged Applicable
Ownership Interests in the Treasury Portfolio” means the Applicable
Ownership Interests in the Treasury Portfolio (as specified in clause (i) of
the definition thereof) and Security Entitlements with respect thereto from
time to time credited to the Collateral Account and not then released from the
Pledge.


 


4

















 


“Pledged Securities”
means the Pledged Applicable Ownership Interests in Debentures, the Pledged
Applicable Ownership Interests in the Treasury Portfolio and 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.


 


“Proceeds” means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of
the UCC) and other property from time to time received, receivable or otherwise
distributed upon the sale, exchange, collection or disposition of the
Collateral or any proceeds thereof.


 


“Purchase Contract” has the meaning specified in the Recitals.


 


“Purchase Contract Agent” has the meaning specified in the first
paragraph of this Agreement.


 


“Purchase Contract Agreement” has the meaning specified in the
Recitals.


 


“Purchase Contract Settlement Date” has the meaning specified in the
Recitals.


 


“Securities Intermediary” has the meaning specified in the first
paragraph of this Agreement.


 


“Security Entitlement” has the meaning specified in Section 8-102(a)(17)
of the UCC.


 


“Separate Debentures” means any Debentures that have been released
from the Pledge following Collateral Substitution and therefore no longer
underlie Corporate Units.


 


“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.


 


“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:


 


(a)            except as otherwise provided in Section 2.1
hereof, 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 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


 


5

















 


(b)           in the case of Collateral
consisting of securities maintained in book-entry form, causing a “securities
intermediary” (as defined in Section 8-102(a)(14) of the UCC) to (i) credit
a Security Entitlement with respect to such securities to a “securities account”
(as defined in Section 8-501(a) of the UCC) maintained by or on
behalf of the recipient and (ii) to issue a confirmation to the recipient
with respect to such credit.  In the case
of Collateral to be delivered to the Collateral Agent, the securities
intermediary shall be the Securities Intermediary and the securities account
shall be the Collateral Account.


 


“Treasury Security” has the meaning specified in the Recitals.


 


“UCC” has the meaning specified in Section 6.1
hereof.


 


“Value” with respect to any item of Collateral on any date
means, as to (i) cash, the amount thereof, (ii) Treasury Securities
or Applicable Ownership Interest in Debentures, the aggregate principal amount
thereof at maturity and (iii) Applicable Ownership Interests in the
Treasury Portfolio (as specified in clause (i) of the definition thereof),
the aggregate percentage of the aggregate principal amount at maturity.


 


ARTICLE II.


 


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, and the Purchase Contract
Agent, as such 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 all of the right, title and
interest of such Holders and the Purchase Contract Agent in the
Collateral.  Prior to or concurrently with
the execution and delivery of this Agreement, the Purchase Contract Agent, on
behalf of the initial Holders of the Equity Units, shall cause the Debentures
underlying the Pledged Applicable Ownership Interests in Debentures comprising
a part of the Corporate Units, to be Transferred to the Collateral Agent for
the benefit of the Company.  Such
Debentures shall be Transferred by physically delivering such Debentures to the
Collateral Agent endorsed in blank.  From
time to time, the Treasury Securities and the Treasury Portfolio, as applicable,
shall be Transferred to the Collateral Account maintained by the Collateral
Agent as the Securities Intermediary by book-entry transfer to the Collateral
Account in accordance with the TRADES Regulations and other applicable law and
by the notation by the Securities Intermediary on its books that a Security
Entitlement with respect to such Treasury Securities or Treasury Portfolio, has
been credited to the Collateral Account. 
For purposes of perfecting the Pledge under applicable law, including,
to the extent applicable, the TRADES Regulations or the Uniform Commercial Code
as adopted and in effect in any applicable jurisdiction, the Collateral Agent
shall be the agent of the Company as provided herein.  The pledge provided in this Section 2.1
is herein referred to as the “Pledge.”  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.  The Collateral Agent shall have 


 


6

















 


the right to have the
Debentures held in physical form reregistered in its name or in the name of its
agent or the Securities Intermediary and credited to the Collateral Account.


 


Except as may be required in order to release Pledged
Applicable Ownership Interest in Debentures (or if (i) a Special Event
Redemption, (ii) a Mandatory Redemption if the Purchase Contracts have not
been previously or concurrently terminated in accordance with the Purchase
Contract Agreement or (iii) a Successful Remarketing has occurred, the
Pledged Applicable Ownership Interest in the Treasury Portfolio) or Pledged
Treasury Securities in connection with a Holder’s election to convert its
investment from Corporate Units to Treasury Units, or from Treasury Units to
Corporate Units, as the case may be, or except as otherwise required to release
Pledged Securities as specified herein, neither the Collateral Agent nor the
Securities Intermediary shall relinquish physical possession of any certificate
evidencing Debentures (or if (i) a Special Event Redemption, (ii) Mandatory
Redemption if the Purchase Contracts have not been previously or concurrently
terminated in accordance with the Purchase Contract Agreement or (iii) a
Successful Remarketing has occurred, the Applicable Ownership Interest in the
Treasury Portfolio) or Treasury Securities 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 Debentures evidenced thereby from the Pledge, the
Collateral Agent shall use its best efforts to obtain physical possession of a
replacement certificate evidencing any Debentures remaining subject to the
Pledge hereunder registered to it or endorsed in blank within ten 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


 


(a)            In connection with the Pledge granted in Section 2.1, and subject to the
other provisions of this Agreement, the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, 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 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 Debentures, the Treasury Securities, any Treasury Portfolio and any
Security Entitlements with respect thereto and to pay and deliver any income,
proceeds or other funds derived therefrom to the Company.  The Purchase Contract Agent and the Holders
from time to time, acting through the Purchase Contract Agent, each hereby
further authorize and direct the Collateral Agent, as agent of the Company, to
itself issue instructions and Entitlement Orders, and to otherwise take action,
with respect to the Collateral Account, the Collateral credited thereto and any
Security Entitlements with respect thereto, pursuant to the terms and
provisions hereof, all without the necessity of obtaining the further consent
of the Purchase Contract Agent or any of the Holders.  The Collateral Agent shall be the agent of
the Company and shall act as directed in writing by the Company.  Without limiting the generality of the
foregoing, the Collateral Agent shall issue Entitlement Orders to the
Securities Intermediary when and as required by the terms hereof or as directed
by the Company.


 


7














 


(b)           The Securities Intermediary hereby
confirms and agrees that: (i) all securities or other property underlying
any financial assets credited to the Collateral Account shall be registered in
the name of the Securities Intermediary, endorsed to the Securities
Intermediary or in blank or credited to another collateral account maintained
in the name of the Securities Intermediary and in no case will any financial
asset credited to the Collateral Account be registered in the name of the
Purchase Contract Agent, the Company or any Holder, payable to the order of, or
specially endorsed to, the Purchase Contract Agent, the Collateral Agent, the
Company or any Holder except to the extent the foregoing have been specially
endorsed to the Securities Intermediary or in blank; (ii) all property
delivered to the Securities Intermediary pursuant to this Agreement (including,
without limitation, any Pledged Securities) will be promptly credited to the
Collateral Account; (iii) the Collateral Account is an account to which
financial assets are or may be credited, and the Securities Intermediary shall,
subject to the terms of this Agreement, treat the Purchase Contract Agent as
the “entitlement holder” (as defined in Section 8-102(a)(7) of
the UCC) with respect to the Collateral Account; (iv) the Securities
Intermediary has not entered into, and until the termination of this Agreement
will not enter into, any agreement with any other Person relating to the
Collateral Account and/or any financial assets credited thereto pursuant to
which it has agreed to comply with Entitlement Orders of such other Person; and
(v) the Securities Intermediary has not entered into, and until the
termination of this Agreement will not enter into, any agreement with the
Company, the Collateral Agent, the Purchase Contract Agent or the Holders of
the Equity Units purporting to limit or condition the obligation of the
Securities Intermediary to comply with Entitlement Orders as set forth in this Section 2.2
hereof.


 


(c)            The Securities Intermediary hereby
agrees that each item of property (whether investment property, financial
asset, security, instrument or cash) credited to the Collateral Account shall
be treated as a “financial asset” within the
meaning of Section 8-102(a)(9) of the UCC.


 


(d)           In the event of any conflict between
this Agreement (or any portion hereof) and any other agreement now existing or
hereafter entered into, the terms of this Agreement shall prevail.


 


(e)            The Purchase Contract Agent hereby
irrevocably constitutes and appoints the Collateral Agent and the Company, and
each of them severally, with full power of substitution, as the Purchase
Contract Agent’s attorney-in-fact to take on behalf of, and in the name, place
and stead of the Purchase Contract Agent and the Holders, any action necessary
or desirable to perfect and to keep perfected the security interest in the
Collateral referred to in Section 2.1.  The grant of such power-of-attorney shall not
be deemed to require of the Collateral Agent any specific duties or obligations
not otherwise assumed by the Collateral Agent hereunder.


 


ARTICLE III.


 


DISTRIBUTIONS ON PLEDGED COLLATERAL


 


So long as the Purchase Contract Agent is the
registered owner of the Debentures underlying the Pledged Applicable Ownership
Interests in Debentures, it shall receive all 


 


8

















 


payments thereon.  If the Debentures underlying the Pledged
Applicable Ownership Interests in Debentures are reregistered, such that the
Collateral Agent becomes the registered holder, all payments of principal or
interest on such Debentures, together with any payments of principal or
interest or cash distributions in respect of any other Pledged 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) payment of
interest with respect to the Pledged Applicable Ownership Interests in
Debentures or cash distributions on the Pledged Applicable Ownership Interests
in the Treasury Portfolio (as specified in clause (ii) of the definition
of the term “Applicable Ownership Interest in the Treasury Portfolio”), as the
case may be, and (B) any payments of principal with respect to any
Applicable Ownership Interest in Debentures or the Applicable Ownership
Interest in the Treasury Portfolio (as specified in clause (i) of the
definition of such term), as the case may be, 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 Corporate Units, 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 Treasury Units, to the accounts designated by them to the
Collateral Agent in writing for such purpose, no later than 2:00 p.m., New
York City time, on the Business Day such payment is received by the Collateral
Agent (provided that in the event such payment is received by the Collateral
Agent on a day that is not a Business Day or after 12:30 p.m., New York
City time, on a Business Day, then such payment shall be made no later than
10:30 a.m., New York City time, on the next succeeding Business Day); and


 


(iii)          In the case of payments of the
principal of any Pledged Applicable Ownership Interests in Debentures or on the
Pledged Applicable Ownership Interests in the Treasury Portfolio (as specified
in clause (i) of the definition of the term “Applicable Ownership Interest
in the Treasury Portfolio”), as the case may be, 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, 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 or a Holder of Corporate Units shall receive any
payments of principal on account of any Applicable Ownership Interest in
Debentures or, if applicable, the Applicable Ownership Interest in the Treasury
Portfolio (as specified in clause (i) of the definition of such term) in
the Treasury Portfolio that, at the time of such payment, is a Pledged
Applicable Ownership Interest in Debentures or the Pledged Applicable Ownership
Interests in the Treasury Portfolio, as the case 


 


9

















 


may be, or the Purchase
Contract Agent or a Holder of Treasury Units 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, as the case may be, shall transfer the Proceeds of such payment of
principal on such Pledged Applicable Ownership Interests in Debentures, Pledged
Applicable Ownership Interests in the Treasury Portfolio, or Pledged Treasury
Securities, as the case may be, to the Collateral Agent and the Collateral
Agent shall hold such Proceeds for the benefit of the Company as Collateral for
the performance when due by such Holder of its obligations under the related
Purchase Contracts.


 


ARTICLE IV.


 


SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF
DEBENTURES


 


SECTION 4.1                                                                     Substitution for Debentures and the
Creation of Treasury Units


 


A Holder of a Corporate Unit may create or recreate a
Treasury Unit and separate the Applicable Ownership Interest in Debentures or
the Applicable Ownership Interest in the Treasury Portfolio, as applicable,
from the related Purchase Contract in respect of such Corporate Unit by
substituting Treasury Securities for all, but not less than all, of the
Applicable Ownership Interest in Debentures or Applicable Ownership Interest in
the Treasury Portfolio that form a part of such Corporate Unit in accordance
with this Section 4.1 and Section 3.13 of the
Purchase Contract Agreement; provided, however, that if the
Applicable Ownership Interest in the Treasury Portfolio has not replaced the
Applicable Ownership Interest in Debentures as a component of Corporate Units
as a result of a Successful Remarketing or a Special Event Redemption or a Mandatory
Redemption, such Collateral Substitutions may only be made on or prior to 5:00 p.m.,
New York City time, on the seventh Business Day immediately preceding the
Purchase Contract Settlement Date; and if the Treasury Portfolio has replaced
the Debentures underlying the Applicable Ownership Interest in Debentures as a
component of Corporate Units as a result of a Successful Remarketing or a
Special Event Redemption or a Mandatory Redemption, such Collateral
Substitutions may only be made on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date.  In accordance with Section 3.13
of the Purchase Contract Agreement, unless a Successful
Remarketing or a Special Event Redemption or a Mandatory Redemption has
previously occurred, Holders of Corporate Units shall not be permitted to
effect Collateral Substitutions during the period commencing on and including
the Business Day prior to the first of the three sequential Remarketing Dates
comprising a Three-Day Remarketing Period and ending on and including the Reset
Date relating to a Successful Remarketing during such Three-Day Remarketing
Period or, if none of the Remarketings during such Three-Day Remarketing Period
is successful, the Business Day following the last of the three sequential
Remarketing Dates occurring during such Three-Day Remarketing Period.  Holders of Corporate Units may make
Collateral Substitutions and establish Treasury Units (i) only in integral
multiples of 20 Corporate Units if Applicable Ownership Interests in
Debentures are being substituted for Treasury Securities, or (ii) only in
integral multiples of                       
Corporate Units (or such other number of Corporate Units as may be determined
by the Remarketing Agent following a Successful Remarketing if the Reset Date
is not a Payment Date) if the Applicable Ownership Interests in the Treasury
Portfolio are being substituted for Treasury Securities.  For example, to create 20 Treasury Units (if
a Special Event Redemption or a Mandatory Redemption has not occurred and the
Applicable Ownership 


 


10

















 


Interests in Debentures
remain components of Corporate Units), or                       
Treasury Units (if a Special Event Redemption or a Mandatory Redemption has
occurred or the Treasury Portfolio has replaced the Applicable Ownership
Interests in Debentures as components of Corporate Units as a result of a
Successful Remarketing) (or such other number of Treasury Units as may be
determined by the Remarketing Agent following a Successful Remarketing if the
Reset Date is not a Payment Date), the Corporate Unit Holder shall,


 


(a)            if the Treasury Portfolio has not
replaced the Applicable Ownership Interest in Debentures as a component of
Corporate Units as a result of a Successful Remarketing or a Special Event
Redemption or a Mandatory Redemption, on or prior to the seventh Business Day
immediately preceding the Purchase Contract Settlement Date, deposit with the
Collateral Agent a Treasury Security having a principal amount at maturity of
$1,000; or


 


(b)           if the Treasury Portfolio has
replaced the Applicable Ownership Interest in Debentures as a component of
Corporate Units as a result of a Successful Remarketing or a Special Event
Redemption or a Mandatory Redemption, on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, deposit with the
Collateral Agent Treasury Securities having an aggregate principal amount at
maturity of $1,000,000; and


 


(c)            in each case, transfer and surrender
the related 20 Corporate Units, or in the event the Treasury Portfolio is a
component of Corporate Units,                       
Corporate Units (or such other number of Corporate Units as may be determined
by the Remarketing Agent following a Successful Remarketing if the Reset Date
is not a Payment Date), to the Purchase Contract Agent accompanied by an
instruction to the Purchase Contract Agent, substantially in the form of Exhibit B
hereto, stating that the Holder has transferred the relevant amount of Treasury
Securities to the Collateral Agent and requesting that the Purchase Contract
Agent instruct the Collateral Agent to release the Applicable Ownership
Interest in Debentures or the Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, underlying such Corporate Units, whereupon the
Purchase Contract Agent shall promptly give such instruction to the Collateral
Agent, substantially in the form of Exhibit A hereto.


 


Upon receipt of the Treasury Securities described in
clause (a) or (b) above and the instructions described in clause (c) above
from the Purchase Contract Agent, the Collateral Agent shall release the
Pledged Applicable Ownership Interests in Debentures or the Pledged Applicable
Ownership Interests in the Treasury Portfolio, as the case may be, and shall
promptly Transfer such Pledged Applicable Ownership Interests in Debentures or
the Pledged Applicable Ownership Interests in the Treasury Portfolio, as the
case may be, free and clear of the lien, pledge or security interest created
hereby, to the Purchase Contract Agent for the benefit of the Holders.


 


SECTION 4.2                                                                     Substitution for Treasury Securities and
the Creation of Corporate Units


 


A Holder of a Treasury Unit may create or recreate a
Corporate Unit by depositing with the Collateral Agent the Applicable Ownership
Interest in Debentures or the Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, in substitution for all, but not less than all,
of the Treasury Securities comprising part of the Treasury Unit in accordance
with 


 


11

















 


this Section 4.2
and 3.14 of the Purchase Contract Agreement; provided, however,
that if the Applicable Ownership Interest in the Treasury Portfolio has not
replaced the Applicable Ownership Interest in Debentures as a component of
Corporate Units as a result of a Successful Remarketing or a Special Event
Redemption or a Mandatory Redemption, such Collateral Substitutions may only be
made on or prior to 5:00 p.m., New York City time, on the second Business
Day immediately preceding the first day of the Final Three-Day Remarketing
Period; and if the Treasury Portfolio has replaced the Debentures underlying
the Applicable Ownership Interest in Debentures as a component of Corporate
Units as a result of a Successful Remarketing or a Special Event Redemption or
a Mandatory Redemption, such Collateral Substitutions may only be made on or
prior to the second Business Day immediately preceding the Purchase Contract
Settlement Date.  In accordance with Section 3.14 of the Purchase Contract
Agreement, unless a Successful Remarketing or a Special Event
Redemption or a Mandatory Redemption has previously occurred, Holders of
Treasury Units shall not be permitted to effect Collateral Substitutions during
the period commencing on and including the Business Day prior to the first of
the three sequential Remarketing Dates comprising a Three-Day Remarketing
Period and ending on and including the Reset Date relating to a Successful
Remarketing during such Three-Day Remarketing Period or, if none of the
Remarketings during such Three-Day Remarketing Period is successful, the
Business Day following the last of the three sequential Remarketing Dates
occurring during such Three-Day Remarketing Period.  Holders of Treasury Units may make such
Collateral Substitutions and establish Corporate Units (i) only in
integral multiples of 20 Treasury Units if Treasury Securities are being
replaced by Applicable Ownership Interest in Debentures, or (ii) only in
integral multiples of                       
Treasury Units (or such other number of Treasury Units as may be determined by
the Remarketing Agent following a Successful Remarketing if the Reset Date is
not a Payment Date) if any Treasury Security is being replaced by the
Applicable Ownership Interest in the Treasury Portfolio.


 


For example, to create 20 Corporate Units (if a
Special Event Redemption or a Mandatory Redemption has not occurred and the
Applicable Ownership Interests in Debentures remain components of Corporate
Units), or                       
Corporate Units (if a Special Event Redemption or a Mandatory Redemption has
occurred or the Treasury Portfolio has replaced the Applicable Ownership
Interests in Debentures as components of Corporate Units as a result of a
Successful Remarketing) (or such other number of Corporate Units as may be
determined by the Remarketing Agent following a Successful Remarketing if the
Reset Date is not a Payment Date), the Treasury Unit Holder shall


 


(a)            if the Treasury Portfolio has not
replaced the Applicable Ownership Interests in Debentures as a component of
Corporate Units as a result of a Successful Remarketing or a Special Event
Redemption or a Mandatory Redemption, on or prior to the seventh Business Day
immediately preceding the Purchase Contract Settlement Date, deposit with the
Collateral Agent a $1,000 principal amount Debenture; or


 


(b)           if the Treasury Portfolio has
replaced the Applicable Ownership Interests in Debentures as a component of
Corporate Units as a result of a Successful Remarketing or a Special Event
Redemption or a Mandatory Redemption, on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, deposit with the
Collateral Agent 


 


12

















 


the Applicable Ownership Interest in the Treasury
Portfolio having an aggregate principal amount of $1,000,000; and


 


(c)            in each case, transfer and surrender
the related 20 Treasury Units, or in the event the Treasury Portfolio is a
component of Corporate Units,                       
Treasury Units (or such other number of Treasury Units as may be determined by
the Remarketing Agent following a Successful Remarketing if the Reset Date is
not a Payment Date), to the Purchase Contract Agent accompanied by an
instruction to the Purchase Contract Agent, substantially in the form of Exhibit B
hereto, stating that the Holder has transferred the relevant amount of
Applicable Ownership Interest in Debentures or the Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, to the Collateral Agent
and requesting that the Purchase Contract Agent instruct the Collateral Agent
to release the Pledged Treasury Securities underlying such Treasury Units,
whereupon the Purchase Contract Agent shall promptly give such instruction to
the Collateral Agent, substantially in the form of Exhibit A
hereto.


 


Upon receipt of the Debenture or the Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, described in
clause (a) or (b) above and the instructions described in clause (c) above
from the Purchase Contract Agent, the Collateral Agent shall release the
Pledged Treasury Securities and shall promptly Transfer such Pledged Treasury
Securities, free and clear of the lien, pledge or security interest created
hereby, to the Purchase Contract Agent for the benefit of the Holders.


 


SECTION 4.3                                                                     Termination Event


 


Upon receipt by the Collateral Agent of written notice
from the Company or the Purchase Contract Agent that there has occurred a
Termination Event, the Collateral Agent shall release all Collateral from the
Pledge and shall promptly Transfer any Debentures underlying Pledged Applicable
Ownership Interests in Debentures (or, if (i) a Special Event Redemption, (ii) a
Mandatory Redemption if the proceeds thereof were used to acquire the Treasury
Portfolio in accordance with the Purchase Contract Agreement or (iii) a
Successful Remarketing, as the case may be, has occurred, the Pledged
Applicable Ownership Interests in the Treasury Portfolio) and Pledged Treasury
Securities to the Purchase Contract Agent for the benefit of the Holders of the
Corporate Units and the Treasury Units, respectively, free and clear of any
lien, pledge or security interest or other interest created hereby.


 


If such Termination Event shall result from the
Company’s becoming a debtor under the Bankruptcy Code, and if the Collateral
Agent shall for any reason fail promptly to effectuate the release and Transfer
of all Pledged Applicable Ownership Interests in Debentures, the Pledged
Applicable Ownership Interests in the Treasury Portfolio or the Pledged
Treasury Securities, as the case may be, as provided by this Section 4.3,
any Holder may, and the Purchase Contract Agent shall, upon receipt from the
Holders of security or indemnity satisfactory to it against the costs, expenses
and liabilities which might be incurred by the Purchase Contract Agent in
compliance with this paragraph, (i) use its reasonable 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 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 


 


13

















 


Termination Event, and if
(A) any such Holder or 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
Applicable Ownership Interests in Debentures, the Pledged Applicable Ownership
Interests in the Treasury Portfolio or the Pledged Treasury Securities, as the
case may be, as provided in this Section 4.3, then any Holder may, and the
Purchase Contract Agent shall within 15 days after the occurrence of such
Termination Event, commence an action or proceeding in the court with
jurisdiction of the Company’s case under the Bankruptcy Code seeking an order
requiring the Collateral Agent to effectuate the release and transfer of all
Pledged Applicable Ownership Interests in Debentures, the Pledged Applicable
Ownership Interests in the Treasury Portfolio or of the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3 or (ii) commence
an action or proceeding in the court with jurisdiction of the Company’s case
under the Bankruptcy Code like that described in clause (i)(B) of
this Section 4.3 within ten days after the occurrence of such Termination
Event.


 


SECTION 4.4                                                                     Cash Settlement


 


(a)            Upon receipt by the Collateral Agent
of (i) a notice from the Purchase Contract Agent that a Holder of a
Corporate Unit or Treasury Unit has elected, in accordance with the procedures
specified in Section 5.4(a)(i) or (c)(i) of
the Purchase Contract Agreement, respectively, to settle its
Purchase Contract with cash and (ii) payment by such Holder of the amount
required to settle the Purchase Contract prior to 11:00 a.m., New York
City time, on the sixth Business Day immediately preceding the Purchase
Contract Settlement Date in lawful money of the United States by certified or
cashiers’ check or wire transfer in immediately available funds payable to or
upon the order of the Company, then the Collateral Agent shall, upon written
direction of the Company, promptly invest any cash received from a Holder in
connection with a Cash Settlement in Permitted Investments.  Upon receipt of the proceeds upon the
maturity of the Permitted Investments on the Purchase Contract Settlement Date,
the Collateral Agent shall pay the portion of such proceeds and deliver any
certified or cashiers’ checks received, in an aggregate amount equal to the
Purchase Price, to the Company on the Purchase Contract Settlement Date, and
shall distribute any funds in respect of the interest earned from the Permitted
Investments to the Purchase Contract Agent for payment to the relevant Holder.


 


(b)           If a Holder of Corporate Units (if
Applicable Ownership Interests in Debentures are components thereof) fails to
notify the Purchase Contract Agent of its intention to effect a Cash Settlement
in accordance with Section 5.4(a)(i) of
the Purchase Contract Agreement, such failure shall constitute a
default under the related Purchase Contracts, and the Holder shall be deemed to
have consented to the disposition of the Debentures underlying the Pledged
Applicable Ownership Interests in Debentures pursuant to the Remarketing as
described in Section 5.4(a) of the Purchase
Contract Agreement, which is incorporated herein by reference,
and Section 4.6 hereof, and the
Collateral Agent, for the benefit of the Company, will exercise its rights as a
secured party with respect to the Pledged Applicable Ownership Interests in
Debentures at the direction of the Company to cause the Remarketing of the
Debentures underlying such Pledged Applicable Ownership Interests in
Debentures.  If a Holder of Corporate
Units does notify the Purchase Contract Agent as provided in Section 5.4(a)(i) of the Purchase
Contract Agreement of its intention to effect a Cash Settlement,
but fails to make such 


 


14

















 


payment as required by Section 5.4(a)(ii) of
the Purchase Contract Agreement, such failure shall constitute a
default under the related Purchase Contracts, and the Pledged Applicable
Ownership Interests in Debentures of such a Holder will not be remarketed but
instead the Collateral Agent, for the benefit of the Company, will exercise its
rights as a secured party with respect to such Applicable Ownership Interest in
Debentures at the direction of the Company to retain or dispose of the
Collateral in accordance with applicable law. 
If all the Remarketings during the Final Three-Day Remarketing Period
result in Failed Remarketings as described in Section 5.4(a) of
the Purchase Contract Agreement, such Failed Remarketings shall
constitute a default under the related Purchase Contracts by such Holder, and
the Collateral Agent, for the benefit of the Company, will exercise its rights
as a secured party with respect to such Debentures underlying the Applicable
Ownership Interests in Debentures at the direction of the Company to retain or
dispose of the Collateral in accordance with applicable law.


 


(c)            If a Holder of Treasury Units or
Corporate Units (if the Applicable Ownership Interests in the Treasury
Portfolio has replaced the Applicable Ownership Interests in Debentures as a
component of the Corporate Units) fails to notify the Purchase Contract Agent
of its intention to effect a Cash Settlement in accordance with Section 5.4(c)(i) of the Purchase
Contract Agreement, or if a Holder of Treasury Units or
Corporate Units (if the Applicable Ownership Interest in the Treasury Portfolio
has replaced the Applicable Ownership Interest in Debentures as a component of
the Corporate Units) notifies the Purchase Contract Agent as provided in Section 5.4(c)(i) of the Purchase
Contract Agreement of its intention to effect a Cash Settlement,
but fails to make such payment as required by Section 5.4(c)(ii) of
the Purchase Contract Agreement, such failure shall constitute a
default under the related Purchase Contracts by such Holder and upon the
maturity of the related Pledged Treasury Securities or the Pledged Applicable
Ownership Interests in the Treasury Portfolio, if any, held by the Collateral
Agent on the Business Day immediately preceding the Purchase Contract
Settlement Date, the principal amount of such Pledged Treasury Securities, or
the portion of the Pledged Applicable Ownership Interests in the Treasury
Portfolio, as the case may be, corresponding to such Purchase Contracts
received by the Collateral Agent shall, upon written direction of the Company,
be invested promptly in Permitted Investments. 
On the Purchase Contract Settlement Date, an aggregate amount equal to
the Purchase Price will be remitted to the Company as payment of the Purchase
Price of such Purchase Contracts.  In the
event the sum of the Proceeds from the Pledged Treasury Securities or the
Pledged Applicable Ownership Interests in the Treasury Portfolio, as the case
may be, and the investment earnings earned from the Permitted Investments is in
excess of the aggregate Purchase Price of the Purchase Contracts being settled
thereby, the Collateral Agent will distribute such excess to the Purchase
Contract Agent for the benefit of the Holder of the related Treasury Units or
Corporate Units.


 


SECTION 4.5                                                                     Early Settlement; Fundamental Change
Early Settlement


 


Upon written notice to the Collateral Agent by the
Purchase Contract Agent that a Holder of an Equity Unit has elected to effect
Early Settlement or Fundamental Change Early Settlement of its entire
obligation under the Purchase Contract forming a part of such Equity Unit in
accordance with the terms of the Purchase Contract and the Purchase Contract
Agreement, and that the Purchase Contract Agent has received from such Holder,
and paid to the Company as confirmed in writing by the Company, the related
Early Settlement Amount or Fundamental Change Early Settlement Amount, as the
case may be, pursuant to the terms of the Purchase 


 


15

















 


Contract and the Purchase
Contract Agreement and that all conditions to such Early Settlement or
Fundamental Change Early Settlement, as the case may be, have been satisfied,
then the Collateral Agent shall release from the Pledge, (a) the Pledged
Applicable Ownership Interests in Debentures or the Pledged Applicable
Ownership Interests in the Treasury Portfolio in the case of a Holder of
Corporate Units or (b) Pledged Treasury Securities in the case of a Holder
of Treasury Units, in each case that had been components of such Equity Unit,
and shall transfer such Pledged Applicable Ownership Interests in Debentures or
the Pledged Applicable Ownership Interests in the Treasury Portfolio 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 such Holder.


 


SECTION 4.6                                                                     Application of Proceeds Settlement


 


(a)            In the event a Holder of Corporate
Units, unless the Applicable Ownership Interests in the Treasury Portfolio has
replaced the Applicable Ownership Interests in Debentures, has not elected to
make an effective Cash Settlement by notifying the Purchase Contract Agent in
the manner provided for in Section 5.4(a)(i) of
the Purchase Contract Agreement or has not made an Early
Settlement or a Fundamental Change Early Settlement of the Purchase Contracts
underlying its Corporate Units, such Holder shall be deemed to have consented
to the disposition of the Debentures underlying the Pledged Applicable
Ownership Interests in Debentures pursuant to the Remarketing as described in Section 5.4(a) of the Purchase Contract
Agreement in order to pay for the shares of Common Stock to be
issued under such Purchase Contract.  The
Collateral Agent shall by 10:00 a.m., New York City time, on the sixth
Business Day immediately preceding the Purchase Contract Settlement Date,
without any instruction from such Holder of Corporate Units, present the
related Debentures underlying the Pledged Applicable Ownership Interests in
Debentures to the Remarketing Agent for remarketing.  Upon receiving such Debentures, the
Remarketing Agent, pursuant to the terms of the Remarketing Agreement, will use
its commercially reasonable efforts to remarket such Debentures underlying the
Pledged Applicable Ownership Interests in Debentures on such date at a price
equal to or greater than 100% of the aggregate Value of such Pledged Applicable
Ownership Interests in Debentures plus the applicable Remarketing Fee.  The Remarketing Agent may deduct the
Remarketing Fee from any portion of the proceeds from the Remarketing of the
Debentures that is in excess of the sum of 100% of the aggregate Value of such
Pledged Applicable Ownership Interests in Debentures and the aggregate Separate
Debentures Purchase Price.  Upon a
Successful Remarketing and after deducting the Remarketing Fee from such
Proceeds, the Remarketing Agent will remit the remaining portion of the
Proceeds of a Successful Remarketing related to such Applicable Ownership
Interest in Debentures to the Collateral Agent. 
On the Purchase Contract Settlement Date, the Collateral Agent shall
apply that portion of the Proceeds from such Remarketing equal to the aggregate
Value of the Pledged Applicable Ownership Interests in Debentures to satisfy in
full the obligations of such Holders of Corporate Units to pay the Purchase
Price for the Common Stock under the related Purchase Contracts.  The remaining portion of such Proceeds, if
any, shall be distributed by the Collateral Agent to the Purchase Contract
Agent for payment to the Holders.  If the
Remarketing Agent advises the Collateral Agent in writing that it cannot
remarket the related Pledged Applicable Ownership Interests in Debentures of
such Holders of Corporate Units at a price not less than 100% of the aggregate
Value of such Pledged Applicable Ownership Interests in Debentures, or if the
Remarketing does not occur because a condition precedent to such Remarketing
has not 


 


16

















 


been fulfilled, thus resulting in a Failed
Remarketing, the Collateral Agent will, for the benefit of the Company, at the
written direction of the Company, retain or dispose of the Pledged Applicable
Ownership Interests in Debentures in accordance with applicable law and satisfy
in full, from any such disposition or retention, such Holder’s obligation to
pay the Purchase Price for the Common Stock under the related Purchase
Contracts.


 


(b)           In the event a Holder of Treasury
Units or, if the Treasury Portfolio has replaced the Applicable Ownership
Interests in Debentures as a component of Corporate Units, Corporate Units, has
not made an Early Settlement or a Fundamental Change Early Settlement of the
Purchase Contracts underlying its Treasury Units or Corporate Units, as the
case may be, such Holder shall be deemed to have elected to pay for the shares
of Common Stock to be issued under such Purchase Contracts from the Proceeds of
the related Pledged Treasury Securities or the related Pledged Applicable
Ownership Interests in the Treasury Portfolio, as the case may be.  On the Business Day immediately prior to the
Purchase Contract Settlement Date, the Collateral Agent shall, at the written
direction of the Purchase Contract Agent, invest the cash Proceeds of the
maturing Pledged Treasury Securities or the Pledged Applicable Ownership
Interests in the Treasury Portfolio, as the case may be, in Permitted
Investments.  Without receiving any
instruction from any such Holder of Treasury Units or Corporate Units, the
Collateral Agent shall apply the Proceeds of the related Pledged Treasury
Securities or Pledged Applicable Ownership Interests in the Treasury Portfolio
to the settlement of the related Purchase Contracts on the Purchase Contract Settlement
Date.  In the event the sum of the
Proceeds from the related Pledged Treasury Securities or related Pledged
Applicable Ownership Interests in the Treasury Portfolio and the investment
earnings from the investment in Permitted Investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being settled thereby on the
Purchase Contract Settlement Date, the Collateral Agent shall distribute such
excess, when received, to the Purchase Contract Agent for the benefit of the
Holders.


 


The Company shall not be obligated to issue any shares
of Common Stock in respect of the Purchase Contract(s) or deliver any
certificate therefor to the Holder unless it shall have received payment in
full of the Purchase Price for the shares of Common Stock to be purchased
thereunder.


 


(c)            Pursuant to the Remarketing
Agreement, on or prior to 5:00 p.m., New York City time, on the second
Business Day immediately preceding the first Remarketing Date of the applicable
Three-Day Remarketing Period, but no earlier than 5:00 p.m., New York City
time, on the fifth Business Day immediately preceding such first Remarketing
Date of the applicable Three-Day Remarketing Period, holders of Separate
Debentures may elect to have their Separate Debentures remarketed by delivering
the Separate Debentures, together with a notice of such election, substantially
in the form of Exhibit C hereto, to the Custodial Agent.  The Custodial Agent will hold the Separate
Debentures in an account separate from the Collateral Account.  A holder of Separate Debentures electing
to have its Separate Debentures remarketed will also have the right to withdraw
such election by written notice to the Custodial Agent, substantially in the
form of Exhibit D hereto, on or prior to 5:00 p.m., New York
City time, on the second Business Day immediately preceding the first
Remarketing Date of the relevant Three-Day Remarketing Period, upon which
notice the Custodial Agent shall return such Separate Debentures to such
holder.  After such time, such election to
remarket shall become an irrevocable election to have such Separate Debentures
remarketed in such


 


17














 


Remarketing. 
Promptly after 11:00 a.m., New York City time, on the Business Day
immediately preceding the first Remarketing Date of the relevant Three-Day
Remarketing Period, the Custodial Agent shall notify the Remarketing Agent of
the aggregate principal amount of the Separate Debentures to be remarketed and
shall deliver to the Remarketing Agent for Remarketing all Separate Debentures
delivered to the Custodial Agent, and not withdrawn, pursuant to this Section 4.6(c) prior
to such date.  The portion of the
proceeds from such remarketing equal to the aggregate Value of the Separate
Debentures will automatically be remitted by the Remarketing Agent to the
Custodial Agent for the benefit of the holders of the Separate Debentures.


 


(d)           In addition, after deducting the
Remarketing Fee from the Value of the remarketed Separate Debentures, from any
amount of such proceeds in excess of the aggregate Value of the remarketed
Separate Debentures, the Remarketing Agent will remit to the Custodial Agent
the remaining portion of the proceeds, if any, for the benefit of such
holders.  If, despite using its
commercially reasonable efforts, a remarketing attempt is unsuccessful on the
first Remarketing Date of a Three-Day Remarketing Period, subsequent
remarketings will be attempted on each of the two following Remarketing Dates
in that Three-Day Remarketing Period until a Successful Remarketing
occurs.  If the Remarketing Agent advises
the Custodial Agent in writing that none of the three remarketings occurring
during a Three-Day Remarketing Period resulted in a Successful Remarketing or,
if a condition to the Remarketing shall not have been fulfilled, thus in either
case resulting in a Failed Remarketing, the Remarketing Agent will promptly
return the Separate Debentures to the Custodial Agent for redelivery to such
holders.


 


ARTICLE V.


 


VOTING RIGHTS — DEBENTURES


 


The Purchase Contract Agent may exercise, or refrain
from exercising, any and all voting and other consensual rights pertaining to
the Debentures underlying the Pledged Applicable Ownership Interests in
Debentures 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 evidenced in writing and delivered to 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 Applicable Ownership Interests
in Debentures; 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 Applicable Ownership Interests in Debentures, including notice of any
meeting at which holders of Debentures are entitled to vote or solicitation of
consents, waivers or proxies of holders of Debentures, 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 Applicable Ownership Interests in Debentures (in
form and substance satisfactory to the Collateral Agent) as are prepared by the



 


18

















 


Purchase Contract Agent
with respect to the Pledged Applicable Ownership Interests in Debentures.


 


ARTICLE VI.


 


RIGHTS AND REMEDIES;
DISTRIBUTION OF THE DEBENTURES; 

SPECIAL EVENT REDEMPTION; REMARKETING


 


SECTION 6.1                                                                     Rights and Remedies of the Collateral
Agent


 


(a)           In addition to the rights and
remedies specified in Section 4.4
hereof or otherwise available at law or in equity, after a default hereunder,
the Collateral Agent shall have all of the rights and remedies with respect to
the collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
“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. 
Wherever reference is made in this Agreement to any Section of the
UCC, such reference shall be deemed to include a reference to any provision of
the UCC which is a successor to, or amendment of, such Section.  Without limiting the generality of the
foregoing, such remedies may include, to the extent permitted by applicable
law, (i) retention of the Pledged Applicable Ownership Interests in
Debentures or other Collateral in full satisfaction of the Holders’ obligations
under the Purchase Contracts or (ii) sale of the Pledged Applicable
Ownership Interests in Debentures or other Collateral in one or more public or
private sales and application of the Proceeds in full satisfaction of the
Holders’ obligations under the Purchase Contracts.


 


(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
Pledged Applicable Ownership Interests in the Treasury Portfolio (as specified
in clauses (i) or (ii) of the definition of the term “Applicable
Ownership Interest in the Treasury Portfolio”) or on account of principal
payments of any Pledged Treasury Securities as provided in Article III
hereof in satisfaction of the obligations of the Holder of the Equity Units of
which such Pledged Treasury Securities, or the Pledged Applicable Ownership
Interests in the Treasury Portfolio (as specified in clause (i) of the
definition of the term “Applicable Ownership Interest in the Treasury Portfolio”),
as applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute a default under the related Purchase
Contracts and the Collateral Agent shall have and may exercise, with reference
to such Pledged Treasury Securities, or such Pledged Applicable Ownership
Interests in the Treasury Portfolio (as specified in clauses (i) or (ii) of
the definition of the term “Applicable Ownership Interest in the Treasury
Portfolio”), as applicable, and such obligations of such Holder, any and all of
the rights and remedies available to a secured party under the 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) principal
of, or interest on, the Debentures underlying the Pledged Applicable 


 


19

















 


Ownership Interests in Debentures, (ii) the
principal amount of the Pledged Treasury Securities, or (iii) the Pledged
Applicable Ownership Interests in the Treasury Portfolio, subject, in each
case, to the provisions of Article III,
and as otherwise provided herein.


 


(d)           The Purchase Contract Agent
individually and as attorney-in-fact for each Holder of Equity Units agrees
that, from time to time, upon the written request of the Collateral Agent, the
Purchase Contract Agent or such Holder it shall execute and deliver such
further documents and do such other acts and things as the Collateral Agent may
reasonably request in order to maintain the Pledge, and the perfection and
priority thereof, and to confirm the rights of the Collateral Agent
hereunder.  The Purchase Contract Agent
shall have no liability to any Holder for executing any documents or taking any
such acts requested by the Collateral Agent hereunder, except for liability for
its own negligent act, its own negligent failure to act or its own willful
misconduct.


 


SECTION 6.2                                                                     Special Event Redemption; Mandatory
Redemption; Remarketing


 


(a)           Upon the occurrence of a Special
Event Redemption or a Mandatory Redemption prior to the Purchase Contract
Settlement Date, the Collateral Agent will, upon the written instruction of the
Company and the Purchase Contract Agent, deliver the Debentures underlying the
Pledged Applicable Ownership Interests in Debentures to the Indenture Trustee
for payment of the Redemption Price.  The
Collateral Agent shall, or in the event the Debentures underlying the Pledged
Applicable Ownership Interests in Debentures are registered in the name of the
Purchase Contract Agent, the Purchase Contract Agent shall, direct the
Indenture Trustee to pay the Redemption Price therefor payable on the Special
Event Redemption Date or the Mandatory Redemption Date, as the case may be, on
or prior to 12:30 p.m., New York City time, by check or wire transfer in
immediately available funds at such place and to such account as may be
designated by the Collateral Agent.  In
the event the Collateral Agent receives such Redemption Price, subject to the
provisions of Section 4.3, the
Collateral Agent will, at the written direction of the Company, apply an amount
equal to the Redemption Amount of such Redemption Price to purchase from the
Quotation Agent, the Treasury Portfolio and promptly remit the remaining
portion of such Redemption Price to the Purchase Contract Agent for payment to
the Holders of Corporate Units.  The
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral
Account to secure the obligation of all Holders of Corporate Units to purchase
Common Stock of the Company under the Purchase Contracts constituting a part of
such Corporate Units, in substitution for the Debentures underlying the Pledged
Applicable Ownership Interests in Debentures. 
Thereafter the Collateral Agent shall have such security interests,
rights and obligations with respect to the Treasury Portfolio as it had in
respect of the Debentures underlying the Pledged Applicable Ownership Interests
in Debentures, as provided in Articles II, III, IV, V
and VI, and any reference herein to the Debentures underlying
the Pledged Applicable Ownership Interests in Debentures shall be deemed to be
a reference to the Treasury Portfolio.


 


(b)           Upon a Successful Remarketing during
the Period for Early Remarketing, the proceeds of such Remarketing with respect
to the Pledged Applicable Ownership Interests in Debentures (after deducting
the applicable Remarketing Fee, if any) shall be delivered to the Collateral
Agent in exchange for the Debentures underlying the Pledged Applicable
Ownership Interests in Debentures.  Pursuant
to the terms of this Agreement, the Collateral Agent will apply an amount equal
to the Treasury Portfolio Purchase Price to purchase on behalf of the Holders
of 


 


20

















 


Corporate Units the Treasury Portfolio and promptly
remit the remaining portion, if any, of such proceeds to the Purchase Contract
Agent for payment to the Holders of such Corporate Units.  The Treasury Portfolio will be substituted
for the Debentures underlying the Pledged Applicable Ownership Interests in
Debentures, and will be held by the Collateral Agent in accordance with the
terms of this Agreement to secure the obligation of each Holder of a Corporate
Unit to purchase the Common Stock on the Purchase Contract Settlement Date
under the Purchase Contract constituting a part of such Corporate Unit.  Following a Successful Remarketing during the
Period for Early Remarketing, the Holders of Corporate Units and the Collateral
Agent shall have such security interests, rights and obligations with respect
to the Treasury Portfolio as the Holders of Corporate Units and the Collateral
Agent had in respect of the Debentures underlying the Pledged Applicable
Ownership Interests in Debentures subject to the Pledge thereof as provided in Articles II, III, IV, V and VI
of this Agreement, and any reference herein to the Debentures underlying the
Pledged Applicable Ownership Interests in Debentures shall be deemed to be
reference to the Treasury Portfolio.


 


SECTION 6.3                                                                     Remarketing During the Period for Early
Remarketing


 


The Collateral Agent shall, by 10:00 a.m., New
York City time, on the Business Day immediately preceding the first Remarketing
Date of the applicable Three-Day Remarketing Period selected by FPL Group
Capital pursuant to the Officer’s Certificate, without any instruction from any
Holder of Corporate Units, present the Debentures underlying the Pledged
Applicable Ownership Interests in Debentures to the Remarketing Agent for
remarketing.  Upon receiving such
Debentures, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement and the Supplemental Remarketing Agreement, will use its commercially
reasonable efforts to remarket such Debentures, during the Three-Day
Remarketing Period, at a price not less than 100% of the Treasury Portfolio
Purchase Price plus the applicable Remarketing Fee.  If a Remarketing on the first Remarketing
Date during the applicable Three-Day Remarketing Period is not successful, the
Remarketing Agent shall, in accordance with the Remarketing Agreement, remarket
the Debentures on each of the next two succeeding Remarketing Dates during such
Three-Day Remarketing Period until a Successful Remarketing occurs.  The Remarketing Agent may deduct the
Remarketing Fee from any amount of Proceeds from such Remarketing in excess of
sum of the Remarketing Treasury Portfolio Purchase Price, plus the Separate
Debentures Purchase Price.  After
deducting the Remarketing Fee, if any, the Remarketing Agent will remit the
entire amount of the Proceeds of such remarketing to the Collateral Agent on or
prior to 12:00 p.m., New York City time on the Reset Effective Date.  In the event the Collateral Agent receives
such Proceeds with respect to the Pledged Applicable Ownership Interests in
Debentures, 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 remit the remaining portion of
such Proceeds, if any, to the Purchase Contract Agent for payment to the
Holders of Corporate Units.  The
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral
Account to secure the obligation of all Holders of Corporate Units to purchase
Common Stock of the Company under the Purchase Contracts constituting a part of
such Corporate Units, in substitution for the Debentures underlying the Pledged
Applicable Ownership Interests in Debentures. 
Thereafter the Collateral Agent shall have such security interests,
rights and obligations with respect to the Treasury Portfolio as it had in
respect of the Debentures underlying the Pledged Applicable Ownership Interests
in Debentures as provided in Articles II, III, IV,
V and VI, and any reference herein to 


 


21

















 


the Debentures underlying
the Pledged Applicable Ownership Interests in Debentures shall be deemed to be
a reference to such Treasury Portfolio, and any reference herein to interest on
the Debentures underlying the Pledged Applicable Ownership Interests in
Debentures shall be deemed to be a reference to distributions on such Treasury
Portfolio.


 


SECTION 6.4                                                                     Substitutions


 


Whenever a Holder has the right to substitute Treasury
Securities, Debentures or the Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, for Collateral held by the Collateral Agent,
such substitution shall not constitute a novation of the security interest
created hereby.


 


ARTICLE VII.


 


REPRESENTATIONS AND WARRANTIES; COVENANTS


 


SECTION 7.1                                                                     Representations and Warranties


 


The Holders from time to time, acting through the
Purchase Contract Agent as their attorney-in-fact (it being understood that the
Purchase Contract Agent shall not be liable for any representation or warranty
made by or on behalf of a Holder), hereby represent and warrant to the
Collateral Agent, which representations and warranties shall be deemed repeated
on each day a Holder Transfers Collateral that:


 


(a)           such Holder has the power to grant a
security interest in and lien on the Collateral;


 


(b)           such Holder is the sole beneficial
owner of the Collateral and, in the case of Collateral delivered in physical
form, is the sole holder of such Collateral and is the sole beneficial owner
of, or has the right to Transfer, the Collateral it Transfers to the Collateral
Agent, free and clear of any security interest, lien, encumbrance, call,
liability to pay money or other restriction other than the security interest
and lien granted under Article II
hereof;


 


(c)           upon the Transfer of the Collateral
to the Collateral Account or physical delivery of the Debentures to the
Collateral Agent, the Collateral Agent, for the benefit of the Company, will
have a valid and perfected first priority security interest therein (assuming
that any central clearing operation or any Intermediary or other entity not
within the control of the Holder involved in the Transfer of the Collateral,
including the Collateral Agent, gives the notices and takes the action required
of it hereunder and under applicable law for perfection of that interest and
assuming the establishment and exercise of control pursuant to Section 2.2 hereof); and


 


(d)           the execution and performance by the
Holder of its obligations under this Agreement will not result in the creation
of any security interest, lien or other encumbrance on the Collateral other
than the security interest and lien granted under Article II
hereof or violate any provision of any existing law or regulation applicable to
it or of any mortgage, charge, pledge, indenture, contract or undertaking to
which it is a party or which is binding on it or any of its assets.


 


22

















 


SECTION 7.2                                                                     Covenants


 


The Holders from time to time, acting through the
Purchase Contract Agent as their attorney-in-fact (it being understood that the
Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long
as the Collateral remains subject to the Pledge:


 


(a)           neither the Purchase Contract Agent
nor such Holders will create or purport to create or allow to subsist any
mortgage, charge, lien, pledge or any other security interest whatsoever over
the Collateral or any part of it other than pursuant to this Agreement; and


 


(b)           neither the Purchase Contract Agent
nor such Holders will sell or otherwise dispose (or attempt to dispose) of the
Collateral or any part of it except for the beneficial interest therein,
subject to the pledge hereunder, transferred in connection with the Transfer of
the Equity Units.


 


ARTICLE VIII.


 


THE COLLATERAL AGENT


 


It is hereby agreed as
follows:


 


SECTION 8.1                                                                     Appointment, Powers and Immunities


 


The Collateral Agent shall act as agent for the
Company hereunder with such powers as are specifically vested in the Collateral
Agent by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto.  Each of
the Collateral Agent, the Custodial Agent and the Securities Intermediary: (a) shall
have no duties or responsibilities except those expressly set forth or
incorporated in this Agreement and no implied covenants or obligations shall be
inferred from this Agreement against any of them, nor shall any of them be
bound by the provisions of any agreement by any party hereto beyond the
specific or incorporated 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 Equity Units or the Purchase Contract Agreement (except as
specifically incorporated by reference herein), or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
(other than as against the Collateral Agent, the Custodial Agent or the
Securities Intermediary), the Equity Units or the Purchase Contract Agreement
or any other document referred to or provided for herein (except as
specifically incorporated by reference herein) or therein or for any failure by
the Company or any other Person (except the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be) to perform any of its
obligations hereunder or thereunder or for the perfection, priority or, except
as expressly required hereby, maintenance of any security interest created
hereunder; (c) shall not be required to initiate or conduct any litigation
or collection proceedings hereunder (except in the case of the Collateral
Agent, pursuant to directions furnished under Section 8.2 hereof, subject
to Section 8.6 hereof); (d) shall
not be responsible for any action taken or omitted to be taken by it hereunder
or under any other document or instrument referred to or provided for herein or
in connection herewith or therewith, except for its own negligence or 


 


23

















 


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, the Equity Units or other
property deposited hereunder in accordance with the terms hereof.  Subject to the foregoing, during the term of
this Agreement, the Collateral Agent shall take all reasonable action in
connection with the safekeeping and preservation of the Collateral hereunder.


 


No provision of this Agreement shall require the
Collateral Agent, the Custodial Agent or the Securities Intermediary to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. 
In no event shall the Collateral Agent, the Custodial Agent or the
Securities Intermediary be liable for any amount in excess of the Value of the
Collateral.  Notwithstanding the
foregoing, the Collateral Agent, the Custodial Agent and Securities
Intermediary, each in its individual capacity, hereby waive any right of
setoff, banker’s lien, liens or perfection rights as Securities Intermediary or
any counterclaim with respect to any of the Collateral.


 


SECTION 8.2                                                                     Instructions of the Company


 


The Company shall have the right, by one or more
instruments in writing executed and delivered to the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may be, to direct
the time, method and place of conducting any proceeding for the realization of
any right or remedy available to the Collateral Agent, or of exercising any
power conferred on the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be, or to direct the taking or refraining from
taking of any action authorized by this Agreement; provided, however, that (i) such
direction shall not conflict with the provisions of any law or of this
Agreement and (ii) the Collateral Agent, the Custodial Agent and the
Securities Intermediary shall be adequately indemnified as provided
herein.  Nothing in this Section 8.2
shall impair the right of the Collateral Agent in its discretion to take any
action or omit to take any action which it deems proper and which is not
inconsistent with such direction.  The
Company shall promptly confirm in writing any oral instructions furnished to
the Collateral Agent by the Company.


 


SECTION 8.3                                                                     Reliance


 


Each of the Securities Intermediary, the Custodial
Agent and the Collateral Agent shall be entitled conclusively to rely upon any
certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be.  As to any matters not expressly provided for
by this Agreement, the Collateral Agent, the Custodial Agent and the Securities
Intermediary shall in all cases be fully protected in acting, or in refraining
from acting, hereunder in accordance with instructions given by the Company in
accordance with this Agreement.


 


24

















 


SECTION 8.4                                                                     Rights in Other Capacities


 


The Collateral Agent, the Custodial Agent and the
Securities Intermediary and their affiliates may (without having to account
therefor to the Company) accept deposits from, lend money to, make their
investments in and generally engage in any kind of banking, trust or other
business with the Purchase Contract Agent and any Holder of Equity Units (and any
of their respective subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, and the Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent and any Holder of Equity Units 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.


 


SECTION 8.5                                                                     Non-Reliance


 


None of the Securities Intermediary, the Custodial
Agent or the Collateral Agent shall be required to keep itself informed as to
the performance or observance by the Purchase Contract Agent or any Holder of
Equity Units of this Agreement, the Purchase Contract Agreement, the Equity
Units or any other document referred to or provided for herein or therein or to
inspect the properties or books of the Purchase Contract Agent or any Holder of
Equity Units.  The Collateral Agent, the
Custodial Agent and the Securities Intermediary shall not 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 Equity Units (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 8.6                                                                     Compensation and Indemnity


 


The Company agrees:


 


(a)            to pay each of 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, the Custodial Agent or the Securities Intermediary, as the case may be,
for all services rendered by each of them hereunder; and


 


(b)           to indemnify the Collateral Agent,
the Custodial Agent and the Securities Intermediary and each of their
respective directors, officers, agents and employees for, and to hold each of
them harmless from and against, any loss, all claims (whether asserted by the
Company, a Holder or any other Person) and liabilities and reasonable
out-of-pocket expense incurred without negligence, willful misconduct or bad
faith on its part, arising out of or in connection with the acceptance or
administration of its powers and duties under this Agreement, including the
reasonable out-of-pocket costs and expenses (including reasonable fees and
expenses of counsel) of defending itself against any claim or liability in
connection with the exercise or performance of such powers and duties.


 


25














 


The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall each promptly notify the Company of any third
party claim which may give rise to indemnity hereunder and give the Company the
opportunity to participate in the defense of such claim with counsel reasonably
satisfactory to the indemnified party, and no such claim shall be settled
without the written consent of the Company, which consent shall not be
unreasonably withheld.


 


Without prejudice to its rights hereunder, when any of
the Collateral Agent or Securities Intermediary incurs expenses after a
Termination Event occurs, or renders services after a Termination Event occurs,
such expenses and compensation are intended to constitute expenses of
administration under the Bankruptcy Code or any applicable state bankruptcy,
insolvency or other similar law.


 


SECTION 8.7                                                                     Failure to Act


 


In the event of any ambiguity in the provisions of
this Agreement or any dispute between or conflicting claims by or among the
parties hereto or any other Person with respect to any funds or property
deposited hereunder, the Collateral Agent and the Custodial Agent shall be
entitled, after prompt notice to the Company and the Purchase Contract Agent,
at its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and neither the Collateral Agent nor the Custodial
Agent shall be or become liable in any way to any of the parties hereto for its
failure or refusal to comply with such conflicting claims, demands or
instructions.  The Collateral Agent and
the Custodial Agent shall be entitled to refuse to act until either (i) such
conflicting or adverse claims or demands shall have been finally determined by
a court of competent jurisdiction or settled by agreement between the
conflicting parties as evidenced in a writing, satisfactory to the Collateral
Agent or the Custodial Agent, as the case may be, or (ii) the Collateral
Agent or the Custodial Agent, as the case may be, shall have received security
or an indemnity satisfactory to the Collateral Agent or the Custodial Agent, as
the case may be, sufficient to save the Collateral Agent or the Custodial
Agent, as the case may be, harmless from and against any and all loss,
liability or reasonable out-of-pocket expense which the Collateral Agent or the
Custodial Agent, as the case may be, may without negligence, willful
misconduct, or bad faith on its part incur by reason of its acting.  The Collateral Agent or the Custodial Agent
may in addition elect to commence an interpleader action or seek other judicial
relief or orders as the Collateral Agent or the Custodial Agent, as the case
may be, may deem necessary.  Notwithstanding
anything contained herein to the contrary, neither the Collateral Agent nor the
Custodial Agent shall be required to take any action that is in its opinion
contrary to law or to the terms of this Agreement, or which would in its
opinion subject it or any of its officers, employees or directors to liability.


 


SECTION 8.8                                                                     Resignation of Collateral Agent


 


Subject to the appointment and acceptance of a
successor Collateral Agent or Custodial Agent as provided below, (a) the
Collateral Agent and the Custodial Agent may resign at any time by giving
notice thereof to the Company and the Purchase Contract Agent as
attorney-in-fact for the Holders of Equity Units, (b) the Collateral Agent
and the Custodial Agent may be removed at any time by the Company and (c) if
the Collateral Agent or the Custodial Agent fails to perform any of its
material obligations hereunder in any material respect for a 


 


26

















 


period of not less than
20 days after receiving written notice of such failure by the Purchase Contract
Agent and such failure shall be continuing, the Collateral Agent or the
Custodial Agent may be removed by the Purchase Contract Agent.  The Purchase Contract Agent shall promptly
notify the Company of any removal of the Collateral Agent pursuant to clause (c) of
the immediately preceding sentence.  Upon
any such resignation or removal, the Company shall have the right to appoint a
successor Collateral Agent or Custodial Agent, as the case may be.  If no successor Collateral Agent or Custodial
Agent, as the case may be, shall have been so appointed and shall have accepted
such appointment within 30 days after the retiring Collateral Agent’s or
Custodial Agent’s giving of notice of resignation or such removal, then the
retiring Collateral Agent or Custodial Agent, as the case may be, may petition
any court of competent jurisdiction for the appointment of a successor
Collateral Agent or Custodial Agent, as the case may be.  Each of the Collateral Agent and the Custodial
Agent shall be a bank which has an office in New York, New York with a combined
capital and surplus of at least $50,000,000. 
Upon the acceptance of any appointment as Collateral Agent or Custodial
Agent, as the case may be, hereunder by a successor Collateral Agent or
Custodial Agent, as the case may be, such successor shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Collateral Agent or Custodial Agent, as the case may be, and the
retiring Collateral Agent or Custodial Agent, as the case may be, shall take
all appropriate action to transfer any money and property held by it hereunder
(including the Collateral) to such successor. 
The retiring Collateral Agent or Custodial Agent shall, upon such
succession, be discharged from its duties and obligations as Collateral Agent
or Custodial Agent hereunder.  After any
retiring Collateral Agent’s or Custodial Agent’s resignation hereunder as
Collateral Agent or Custodial Agent, the provisions of this Article VIII
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Collateral Agent or
Custodial Agent.  Any resignation or
removal of the Collateral Agent hereunder shall be deemed for all purposes of
this Agreement as the simultaneous resignation or removal of the Custodial
Agent and the Securities Intermediary.


 


SECTION 8.9                                                                     Right to Appoint Agent or Advisor


 


The Collateral Agent shall have the right to appoint
agents or advisors in connection with any of its duties hereunder, and the
Collateral Agent shall not be liable for any action taken or omitted by, or in
reliance upon the advice of, such agents or advisors selected in good
faith.  The appointment of agents
pursuant to this Section 8.9 shall be subject to prior consent of the
Company, which consent shall not be unreasonably withheld.


 


SECTION 8.10                                                              Survival


 


The provisions of this Article VIII and Section 10.7
shall survive termination of this Agreement and the resignation or removal of
the Collateral Agent, the Custodial Agent or the Securities Intermediary.


 


SECTION 8.11                                                              Exculpation


 


Anything in this Agreement to the contrary
notwithstanding, in no event shall any of the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, employees or agents be
liable under this Agreement to any third party for indirect, special, punitive,
or 


 


27

















 


consequential loss or
damage of any kind whatsoever, including lost profits, whether or not the likelihood
of such loss or damage was known to the Collateral Agent, the Custodial Agent
or the Securities Intermediary, or any of them, incurred without any act or
deed that is found to be attributable to negligence or willful misconduct on
the part of the Collateral Agent, the Custodial Agent or the Securities
Intermediary.


 


ARTICLE IX.


 


AMENDMENT


 


SECTION 9.1                                                                     Amendment Without Consent of Holders


 


Without the consent of any Holders, the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
for any of the following purposes:


 


(a)           to evidence the succession of another
Person to the Company, and the assumption by any such successor of the
covenants of the Company;


 


(b)           to add to the covenants of the
Company for the benefit of the Holders or to surrender any right or power
herein conferred upon the Company so long as such covenants or such surrender
do not adversely affect the validity, perfection or priority of the security
interests granted or created hereunder;


 


(c)           to evidence and provide for the
acceptance of appointment hereunder by a successor Collateral Agent, Custodial
Agent, Securities Intermediary or Purchase Contract Agent; or


 


(d)           to cure any ambiguity, to correct or
supplement any provisions herein which may be inconsistent with any other provisions
herein, or to make any other provisions with respect to such matters or
questions arising under this Agreement, provided such action shall not
adversely affect the interests of the Holders in any material respect, provided
further that any amendment made solely to conform the provisions of this
Agreement to the description of the Equity Units, the Purchase Contracts and
the other components of the Equity Units contained in the prospectus
supplement, dated                       ,
relating to the Equity Units will not be deemed to adversely affect the
interests of the Holders.


 


SECTION 9.2                                                                     Amendment with Consent of Holders


 


With the consent of the Holders of not less than a
majority of the outstanding Purchase Contracts voting together as one class, by
Act of said Holders delivered to the Company, the Purchase Contract Agent or
the Collateral Agent, as the case may be, the Company, the Purchase Contract
Agent, the Collateral Agent, the Custodial Agent and the Securities
Intermediary may amend this Agreement for the purpose of modifying in any
manner the provisions of this Agreement or the rights of the Holders in respect
of the Equity Units; provided, however, that no 


 


28

















 


such supplemental
agreement shall, without the consent of the Holder of each Outstanding Equity
Unit adversely affected thereby,


 


(a)           change the amount or the type of
Collateral required to be Pledged to secure a Holder’s Obligations under the
Purchase Contracts (except for the rights of Holders of Corporate Units to
substitute the Treasury Securities for the Pledged Applicable Ownership
Interests in Debentures or the Applicable Ownership Interest in the Treasury
Portfolio or the rights of Holders of Treasury Units to substitute Debentures or
the Applicable Ownership Interest in the Treasury Portfolio for the Pledged
Treasury Securities);


 


(b)           unless such change is not adverse to
the Holders, impair the right of the Holder of any Equity Unit to receive
distributions on the related Collateral or otherwise adversely affect the
Holder’s rights in or to such Collateral;


 


(c)           otherwise effect any action that
would require the consent of the Holder of each Outstanding Equity Unit
affected thereby pursuant to the Purchase Contract Agreement if such action
were effected by an agreement supplemental thereto; or


 


(d)           reduce the percentage of the
outstanding Purchase Contracts the consent of whose Holders is required for any
such amendment;


 


provided,
that if any such supplemental amendment referred to above would adversely
affect only the Corporate Units or the Treasury Units, then only Holders of the affected
class of Equity Units as of the record date for the Holders entitled
to vote thereon will be entitled to vote on or consent to 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.


 


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 Article IX,
the Collateral Agent, the Custodial Agent, the Securities Intermediary 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 Article IX,
this Agreement shall be modified in accordance therewith, and such amendment
shall form a part of this Agreement for all purposes; and every Holder of
Equity Units theretofore or thereafter authenticated, executed on behalf of the
Holders and delivered under the Purchase Contract Agreement shall be bound
thereby.


 


29

















 


SECTION 9.5                                                                     Reference to Amendments


 


Certificates authenticated, executed on behalf of the
Holders and delivered after the execution of any amendment pursuant to this Article IX
may, and shall if required by the Collateral Agent or the Purchase Contract
Agent, bear a notation in form approved by the Purchase Contract Agent and the
Collateral Agent as to any matter provided for in such amendment.  If the Company shall so determine,
Certificates so modified as to conform, in the opinion of the Collateral Agent,
the Purchase Contract Agent and the Company, to any such amendment may be
prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in accordance with the
Purchase Contract Agreement in exchange for outstanding Certificates.


 


ARTICLE X.


 


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 REGARD TO CONFLICT
OF LAWS PRINCIPLES THEREUNDER, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY OTHER
JURISDICTION SHALL BE MANDATORILY APPLICABLE. 
Without limiting the foregoing, the above choice of law is expressly
agreed to by the Company, the Securities Intermediary, the Custodial Agent, 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 Equity Units, acting through the Purchase Contract Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby.  The Company, the Collateral
Agent and the Holders from time to time of the Equity Units, acting through the
Purchase Contract Agent as their attorney-in-fact, irrevocably waive, to the
fullest extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.


 


30

















 


SECTION 10.3                                                              Notices


 


All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to
the intended recipient at the “Address for Notices” specified below its name on
the signature pages hereof (or in the case of Holders, may be made and
deemed given as provided in Sections 1.5 and 1.6 of
the Purchase Contract Agreement) 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
(except as aforesaid).


 


SECTION 10.4                                                              Successors and Assigns


 


This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent, and the Holders from time to time of the Equity Units, by their
acceptance of the same, shall be deemed to have agreed to be bound by the
provisions hereof and to have ratified the agreements of, and the grant of the
Pledge hereunder by, the Purchase Contract Agent.


 


SECTION 10.5                                                              Counterparts


 


This Agreement may be executed in any number of
counterparts by the parties hereto on separate counterparts, each of which,
when so executed and delivered, shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.


 


SECTION 10.6                                                              Separability


 


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
and the Custodial Agent for: (a) all reasonable out-of-pocket costs and
expenses of the Collateral Agent and the Custodial Agent (including, without
limitation, the reasonable fees and expenses of the necessary services of a
Securities Intermediary and of counsel to the Collateral Agent and the Custodial
Agent), in connection with (i) the negotiation, preparation, execution and
delivery or performance of this Agreement and (ii) any modification,
supplement or waiver of any of the terms of this Agreement; (b) all
reasonable costs and expenses of the Collateral Agent (including, without
limitation, reasonable fees and expenses of counsel) in connection with (i) any
enforcement or proceedings resulting or incurred in connection with causing any
Holder of Equity Units to 


 


31

















 


satisfy its obligations
under the Purchase Contracts forming a part of the Equity Units 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 Equity Units
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 Equity Units under the related
Purchase Contracts, or any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the Purchase Contract Agreement
or any Purchase Contract or any other agreement or instrument relating thereto;
or


 


(c)           any other circumstance which might
otherwise constitute a defense available to, or discharge of, a borrower, a
guarantor or a pledgor.


 


32

















 


IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the day and year first above written.


 


	
  FPL GROUP, INC.

  	
   

  
	
   

  	
  as Collateral Agent,
  Custodial Agent and as Securities Intermediary

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
  Address for Notices:

  	
  Title:

  
	
   

  	
   

  
	
  FPL Group, Inc.

  	
   

  
	
  700 Universe Boulevard

  	
   

  
	
  Juno Beach, Florida
  33408

  	
  By:

  	
   

  
	
  Attention: Treasurer

  	
  Name:

  
	
  Telecopy:

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE BANK OF NEW YORK
  MELLON,

  	
  Address for Notices:

  
	
  as Purchase Contract
  Agent and as attorney-in-fact of the Holders from time to time of the Equity
  Units

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Telecopy:

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
  with copies to:

  
	
  Address for Notices:

  	
   

  
	
   

  	
  The Bank of New York
  Mellon Trust Company, N.A.

  
	
  The Bank of New York
  Mellon

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  Attention:

  
	
  Telecopy:

  	
  Telecopy:

  



 














 


EXHIBIT A


 


Instruction
From Purchase Contract Agent to Collateral Agent


 


	
                            ,
  as Collateral Agent

  
	
                            

  
	
                            

  



Attention:


 


Re:                               Securities of FPL Group, Inc. (the “Company”)


 


We hereby notify you in accordance with Section [4.1]
[4.2] of the Pledge Agreement, dated as of                           
(the “Pledge Agreement”), among the Company,
yourselves, as Collateral Agent, Custodial Agent and Securities Intermediary
and ourselves, as Purchase Contract Agent and as attorney-in-fact for the
Holders of Equity Units from time to time, that the Holder of securities listed
below (the “Holder”) has elected to substitute
$           [principal amount
at maturity of Treasury Securities] [of the Applicable Ownership Interests in
Debentures] [of the Applicable Ownership Interests in the Treasury Portfolio]
in exchange for an equal Value of [the Debentures underlying the Pledged
Applicable Ownership Interests in Debentures] [the Pledged Applicable Ownership
Interests in the Treasury Portfolio] [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 [the Applicable Ownership Interests in
Debentures] [the Applicable Ownership Interest in the Treasury Portfolio]
[Treasury Securities] to you, as Collateral Agent.  We hereby instruct you, upon receipt of such
[Treasury Securities] [Applicable Ownership Interests in Debentures]
[Applicable Ownership Interest in the Treasury Portfolio] so Transferred, to
release the [Pledged Applicable Ownership Interests in Debentures] [Pledged
Applicable Ownership Interests in the Treasury Portfolio] [Pledged Treasury
Securities] related to such [Equity Units] to us in accordance with the Holder’s
instructions.  Capitalized terms used
herein but not defined shall have the meaning set forth or incorporated by
reference in the Pledge Agreement.


 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  

  
	
   

  	
  Signature
  Guarantee:

  	
   

  
						



 


Please
print name and address of registered Holder electing to substitute [Treasury
Securities] [Applicable Ownership Interests in Debentures or the Applicable
Ownership Interests in the Treasury Portfolio] for [Pledged Applicable
Ownership Interest in Debentures or Pledged Applicable Ownership Interests in
the Treasury Portfolio] [Pledged Treasury Securities]:


 


	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Social Security or
  other Taxpayer

  
	
   

  	
  Identification Number,
  if any

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


A-1

















 


EXHIBIT B


 


Instruction
to Purchase Contract Agent


 


	
  The Bank of New York
  Mellon

  
	
                            

  
	
                            

  



 


Attention:


 


Re:          Securities of FPL Group, Inc.
(the “Company”)


 


The undersigned Holder hereby notifies you that it has
delivered to                           ,
as Collateral Agent, $        [principal
amount at maturity of Treasury Securities] [of Applicable Ownership Interests
in Debentures] [of the Applicable Ownership Interests in the Treasury
Portfolio] in exchange for an equal Value of [Pledged Applicable Ownership
Interests in Debentures or the Pledged Applicable Ownership Interests in the
Treasury Portfolio, as the case may be,] [Pledged Treasury Securities] held by
the Collateral Agent, in accordance with Section [4.1] [4.2] of the Pledge
Agreement, dated as of                           
(the “Pledge Agreement”), among 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 Applicable
Ownership Interests in Debentures or the Pledged Applicable Ownership Interests
in the Treasury Portfolio] [Pledged Treasury Securities] related to such
[Corporate Units] [Treasury Units]. 
Capitalized terms used herein but not defined shall have the meaning set
forth or incorporated by reference in the Pledge Agreement.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature
  Guarantee:

  	
   

  



 


Please print name and
address of Registered Holder:


 


	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Social Security or
  other Taxpayer

  
	
   

  	
  Identification Number,
  if any

  
	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


B-1

















 


EXHIBIT C


 


Instruction
to Custodial Agent Regarding Remarketing


 


	
                            ,
  as Custodial Agent

  
	
                            

  
	
                            

  



 


Attention:


 


Re:          Securities of FPL Group Capital Inc
(the “Company”)


 


The undersigned hereby notifies you in accordance with
Section 4.6(c) of the Pledge Agreement, dated as of                           
(the “Pledge Agreement”), among the Company,
yourselves, as Collateral Agent, Securities Intermediary and Custodial Agent,
and The Bank of New York Mellon, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from
time to time, that the undersigned elects to deliver $             
principal amount of Debentures for delivery to the Remarketing Agent prior to
5:00 p.m., New York City time, on the second Business Day immediately
preceding the first of the three sequential Remarketing Dates of the applicable
Three-Day Remarketing Period for Remarketing pursuant to Section 4.6(c) of
the Pledge Agreement.  The undersigned
will, upon request of the Remarketing Agent, execute and deliver any additional
documents deemed by the Remarketing Agent or by the Company to be necessary or
desirable to complete the sale, assignment and transfer of the Debentures
tendered hereby.


 


The undersigned hereby instructs you, upon receipt of
the proceeds of such remarketing from the Remarketing Agent to deliver such proceeds
to the undersigned in accordance with the instructions indicated herein under “A. Payment Instructions”. 
The undersigned hereby instructs you, in the event of Failed
Remarketing, upon receipt of the Debentures tendered herewith from the
Remarketing Agent, to deliver such Debentures 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 Debentures tendered hereby and that the undersigned is
the record owner of any Debentures tendered herewith in physical form or a
participant in The Depository Trust Company (“DTC”)
and the beneficial owner of any Debentures tendered herewith by book-entry
transfer to your account at DTC and (ii) agrees to be bound by the terms
and conditions of Section 4.6(c) of the Pledge Agreement.  Capitalized terms used herein but not defined
shall have the meaning set forth or incorporated by reference in the Pledge
Agreement.


 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  

  
	
   

  	
  Signature
  Guarantee:

  	
   

  
						



 


C-1

















 


Please print name and address:


 


	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Social Security or
  other Taxpayer

  
	
   

  	
  Identification Number,
  if any

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


C-2

















 


	
  A.            PAYMENT INSTRUCTIONS

  	
   

  	
  B.            DELIVERY 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. 

  	
   

  	
  In the event of a
  Failed Remarketing, Debentures 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)

  	
   

  	
   

  
	
   

  	
   

  	
  Name(s)

  
	
  (Please Print)

  	
   

  	
   

  
	
   

  	
   

  	
  (Please Print)

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Please Print)

  	
   

  	
   

  
	
   

  	
   

  	
  (Please Print)

  
	
   

  	
   

  	
   

  
	
  (Zip Code)

  	
   

  	
   

  
	
   

  	
   

  	
  (Zip Code)

  
	
   

  	
   

  	
   

  
	
  (Tax
  Identification or Social 

  	
   

  	
   

  
	
  Security Number)

  	
   

  	
  (Tax
  Identification or Social

  
	
   

  	
   

  	
   Security Number)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In the event of a
  Failed Remarketing, Debentures 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:

  	
   

  
						



 


C-3

















 


EXHIBIT D


 


Instruction
to Custodial Agent Regarding


 


Withdrawal
From Remarketing


 


	
                            ,
  as Custodial Agent

  
	
                            

  
	
                            

  



 


Attention:


 


Re:          Securities of FPL Group Capital Inc
(the “Company”)


 


The undersigned hereby notifies you in accordance with
Section 4.6(c) of the Pledge Agreement, dated as of                           
(the “Pledge Agreement”), among the Company,
yourselves, as Collateral Agent, Securities Intermediary and Custodial Agent
and The Bank of New York Mellon, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from
time to time, that the undersigned elects to withdraw the $             
principal amount of Debentures delivered to the Custodial Agent on                           
for remarketing pursuant to Section 4.6(c) of the Pledge
Agreement.  The undersigned hereby
instructs you to return such Debentures to the undersigned in accordance with
the undersigned’s instructions.  With
this notice, the Undersigned hereby agrees to be bound by the terms and
conditions of Section 4.6(c) of the Pledge Agreement.  Capitalized terms used herein but not defined
shall have the meaning set forth or incorporated in the Pledge Agreement.


 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  

  
	
   

  	
  Signature
  Guarantee:

  	
   

  
						



 


Please print name and
address:


 


	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Social Security or
  other Taxpayer

  
	
   

  	
  Identification Number,
  if any

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


D-1