EXHIBIT 4.5
EXECUTION COPY
CINERGY CORP.
and
JPMORGAN CHASE BANK,
as Collateral Agent, Custodial Agent and Securities Intermediary
and
THE BANK OF NEW YORK,
as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of December 18, 2001
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS
SECTION 1.01. Definitions...................................................................1
ARTICLE 2 PLEDGE
SECTION 2.01. Pledge........................................................................6
SECTION 2.02. Control; Financing Statement..................................................6
SECTION 2.03. Termination...................................................................6
ARTICLE 3 DISTRIBUTIONS ON PLEDGED COLLATERAL
SECTION 3.01. Income Distributions..........................................................7
SECTION 3.02. Principal Payments Following Termination Event................................7
SECTION 3.03. Principal Payments Prior to or on Purchase Contract Settlement Date...........7
SECTION 3.04. Payments to Purchase Contract Agent...........................................8
SECTION 3.05. Assets Not Properly Released..................................................8
ARTICLE 4 CONTROL
SECTION 4.01. Establishment of Collateral Account...........................................8
SECTION 4.02. Treatment as Financial Assets.................................................9
SECTION 4.03. Sole Control by Collateral Agent..............................................9
SECTION 4.04. Securities Intermediary's Location............................................9
SECTION 4.05. No Other Claims...............................................................9
SECTION 4.06. Investment and Release........................................................9
SECTION 4.07. Statements and Confirmations..................................................9
SECTION 4.08. Tax Allocations...............................................................9
SECTION 4.09. No Other Agreements..........................................................10
SECTION 4.10. Powers Coupled with an Interest..............................................10
ARTICLE 5 INITIAL DEPOSIT; ESTABLISHMENT OF GROWTH PRIDES AND REESTABLISHMENT OF INCOME PRIDES
SECTION 5.01. Initial Deposit of Preferred Securities......................................10
SECTION 5.02. Establishment of Growth PRIDES...............................................10
SECTION 5.03. Reestablishment of Income PRIDES.............................................12
SECTION 5.04. Termination Event............................................................14
SECTION 5.05. Cash Settlement..............................................................15
SECTION 5.06. Early Settlement.............................................................17
SECTION 5.07. Application of Proceeds in Settlement of Purchase Contracts..................17
SECTION 5.08. Tax Event Redemption.........................................................19
ARTICLE 6 VOTING RIGHTS - PLEDGED PREFERRED SECURITIES AND PLEDGED NOTES
SECTION 6.01. Voting Rights................................................................20
ARTICLE 7 RIGHTS AND REMEDIES
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SECTION 7.01. Rights and Remedies of the Collateral Agent..................................20
SECTION 7.02. Substitution of Notes or Treasury Portfolio..................................21
SECTION 7.03. Tax Event Redemption.........................................................22
SECTION 7.04. Substitutions................................................................22
ARTICLE 8 REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 8.01. Representations and Warranties...............................................22
SECTION 8.02. Covenants....................................................................23
ARTICLE 9 THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES INTERMEDIARY
SECTION 9.01. Appointment, Powers and Immunities...........................................23
SECTION 9.02. Instructions of the Company..................................................24
SECTION 9.03. Reliance.....................................................................25
SECTION 9.04. Rights in Other Capacities...................................................25
SECTION 9.05. Non-Reliance.................................................................25
SECTION 9.06. Compensation and Indemnity...................................................25
SECTION 9.07. Failure to Act...............................................................26
SECTION 9.08. Resignation..................................................................27
SECTION 9.09. Right to Appoint Agent or Advisor............................................28
SECTION 9.10. Survival.....................................................................28
SECTION 9.11. Exculpation..................................................................28
ARTICLE 10 AMENDMENT
SECTION 10.01. Amendment Without Consent of Holders.........................................28
SECTION 10.02. Amendment with Consent of Holders............................................29
SECTION 10.03. Execution of Amendments......................................................30
SECTION 10.04. Effect of Amendments.........................................................30
SECTION 10.05. Reference of Amendments......................................................30
ARTICLE 11 MISCELLANEOUS
SECTION 11.01. No Waiver....................................................................30
SECTION 11.02. Governing Law................................................................30
SECTION 11.03. Notices......................................................................31
SECTION 11.04. Successors and Assigns.......................................................31
SECTION 11.05. Counterparts.................................................................31
SECTION 11.06. Severability.................................................................31
SECTION 11.07. Expenses, Etc................................................................31
SECTION 11.08. Security Interest Absolute...................................................32
SECTION 11.09. Notice of Tax Event, Tax Event Redemption and Termination Event..............32
Exhibit A - Instruction from Purchase Contract Agent to Collateral Agent
(Establishment of Growth PRIDES)
Exhibit B - Instruction from Collateral Agent to Securities Intermediary
(Establishment of Growth PRIDES)
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Exhibit C - Instruction from Purchase Contract Agent to Collateral Agent
(Reestablishment of Income PRIDES)
Exhibit D - Instruction from Collateral Agent to Securities Intermediary
(Reestablishment of Income PRIDES)
Exhibit E - Notice of Cash Settlement from Securities Intermediary to Purchase
Contract Agent (Cash Settlement Amounts)
Exhibit F - Instruction to Custodial Agent Regarding Remarketing
Exhibit G - Instruction to Custodial Agent Regarding Withdrawal From Remarketing
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of December 18, 2001, among
Cinergy Corp., a
Delaware corporation (the "COMPANY"), JPMorgan Chase Bank, a
New York banking
corporation, not individually but solely as collateral agent (in such capacity,
together with its successors in such capacity, the "COLLATERAL AGENT"), as
custodial agent (in such capacity, together with its successors in such
capacity, the "CUSTODIAL AGENT") and as "securities intermediary" as defined in
Section 8-102(a)(14) of the UCC (as defined herein) (in such capacity, together
with its successors in such capacity, the "SECURITIES INTERMEDIARY"), and The
Bank of
New York, a
New York banking corporation, not individually but solely as
purchase contract agent and as attorney-in-fact of the Holders (as defined in
the Purchase Contract Agreement) from time to time of the Securities (as defined
in the Purchase Contract Agreement) (in such capacity, together with its
successors in such capacity, the "PURCHASE CONTRACT AGENT") under the Purchase
Contract Agreement (as defined herein).
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 6,325,000 Income PRIDES (as defined herein)
will be issued (including the over-allotment option exercised in full by the
underwriters).
Each Income PRIDES (as defined herein), at issuance, consists of a unit
comprised of (a) a stock purchase contract (a "PURCHASE CONTRACT") under which
the Holder will purchase from the Company on the Purchase Contract Settlement
Date (as defined herein), for an amount equal to $50 (the "STATED AMOUNT"), a
number of shares of
Cinergy Corp. common stock, par value $0.01 per share
("COMMON STOCK"), equal to the Settlement Rate (as defined herein), and (b)
beneficial ownership of a preferred trust security due 2007 (a "PREFERRED
SECURITY") issued by CC Funding Trust I, a Delaware statutory business trust
(the "TRUST"), having a liquidation amount equal to the Stated Amount.
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders of the Securities have irrevocably authorized
the Purchase Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such Holders and to
grant the pledge provided herein of the Collateral (as defined herein) to secure
the Obligations (as defined herein).
Accordingly, the Company, the Collateral Agent, the Custodial Agent,
the Securities Intermediary and the Purchase Contract Agent, on its own behalf
and as attorney-in-fact of the Holders from time to time of the Securities,
agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. DEFINITIONS. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision;
(c) the following terms which are defined in the UCC shall have the
meanings set forth therein: "CERTIFICATED SECURITY," "CONTROL," "FINANCIAL
ASSET," "ENTITLEMENT ORDER," "SECURITIES ACCOUNT" and "SECURITY ENTITLEMENT";
(d) the following terms have the meanings assigned to them in the
Purchase Contract Agreement: "ACT," "BANKRUPTCY CODE," "BOARD RESOLUTION,"
"BUSINESS DAY," "CASH MERGER," "CASH SETTLEMENT," "CERTIFICATE," "EARLY
SETTLEMENT," "EARLY SETTLEMENT AMOUNT," "EARLY SETTLEMENT DATE," "FAILED
REMARKETING," "HOLDER," "NOTES," "OFFICERS' CERTIFICATE," "OPINION OF COUNSEL,"
"OUTSTANDING SECURITIES," "PURCHASE CONTRACT," "PURCHASE CONTRACT SETTLEMENT
DATE," "PURCHASE PRICE," "REMARKETING AGENT," "REMARKETING AGREEMENT,"
"SECURITY," "SETTLEMENT RATE," "TERMINATION EVENT," and "UNDERWRITING
AGREEMENT";
(e) the following terms have the meanings assigned to them in the
Amended and Restated Declaration of Trust of CC Funding Trust I, of even date
herewith (the "DECLARATION"): "APPLICABLE OWNERSHIP INTEREST," "APPLICABLE
PRINCIPAL AMOUNT," "INDENTURE," "INDENTURE TRUSTEE," "LIQUIDATION DISTRIBUTION,"
"PRIMARY TREASURY DEALER," "PROPERTY TRUSTEE," "QUOTATION AGENT," "REMARKETING,"
"REDEMPTION AMOUNT," "REDEMPTION PRICE," "TAX Event," "TAX EVENT REDEMPTION,"
"TAX EVENT REDEMPTION DATE," and "TREASURY PORTFOLIO"; and
(f) the following terms have the meanings given to them in this Section
1.01(f):
"AGREEMENT" means this
Pledge Agreement, as the same may be amended,
modified or supplemented from time to time.
"CASH" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"COLLATERAL" means the collective reference to:
(i) all investment property and other financial assets from
time to time credited to the Collateral Account, including, without
limitation, (A) the Preferred Securities and security entitlements
relating thereto which are a component of the Income PRIDES from time
to time, (B) the Applicable Ownership Interests (as specified in Clause
(A) of the definition of such term) of the Holders with respect to the
Treasury Portfolio which are a component of the Income PRIDES from time
to time; (C) the Notes and security entitlements relating thereto which
are a component of the Income PRIDES from time to time, (D) any
Treasury Securities and security entitlements relating thereto
delivered from time to time upon establishment of Growth PRIDES in
accordance with Section 5.02 hereof and (E) payments made by Holders
pursuant to Section 5.05 hereof;
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(ii) all Proceeds of any of the foregoing (whether such
Proceeds arise before or after the commencement of any proceeding under
any applicable bankruptcy, insolvency or other similar law, by or
against the pledgor or with respect to the pledgor) (Notwithstanding
the foregoing, for the avoidance of doubt, the cash payments at a rate
of 9.5% per year of the Stated Amount of Income PRIDES to Holders of
Income PRIDES, whether current or deferred, shall not be considered as
Proceeds of the Pledged Securities and therefore are not part of the
Collateral); and
(iii) all powers and rights now owned or hereafter acquired
under or with respect to the Collateral Account
"COLLATERAL ACCOUNT" means the securities account of JPMorgan Chase
Bank, as Collateral Agent, maintained by the Securities Intermediary and
designated "JPMorgan Chase Bank, as Collateral Agent of
Cinergy Corp., as
pledgee of The Bank of
New York, as the Purchase Contract Agent on behalf of and
as attorney-in-fact for the Holders."
"COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"GROWTH PRIDES" means, following the substitution of Treasury
Securities for Preferred Securities or Notes as collateral to secure a Holder's
obligations under the Purchase Contract, the collective rights and obligations
of a Holder of a Growth PRIDES Certificate in respect of such Treasury
Securities, subject to the Pledge thereof, and the related Purchase Contract.
"GROWTH PRIDES CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth PRIDES specified
on such certificate.
"INCOME PRIDES" means the collective rights and obligations of a Holder
of an Income PRIDES Certificate in respect of a Preferred Security, the Notes or
an appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, subject in each case to the Pledge thereof, and the related
Purchase Contract; PROVIDED that the appropriate Applicable Ownership Interest
(as specified in clause (B) of the definition of such term) of the Treasury
Portfolio shall not be subject to the Pledge.
"INCOME PRIDES CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Income PRIDES specified
on such certificate.
"OBLIGATIONS" means, with respect to each Holder, the collective
reference to all obligations and liabilities of such Holder under such Holder's
Purchase Contract, the Purchase Contract Agreement, and this Agreement or any
other document made, delivered or given in connection herewith or therewith, in
each case whether on account of principal, interest (including, without
limitation, interest accruing before and after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to such Holder, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Company or the Collateral Agent or the Securities
3
Intermediary that are required to be paid by the Holder pursuant to the terms of
any of the foregoing agreements).
"PERMITTED INVESTMENTS" means any one of the following which shall
mature not later than the next succeeding Business Day:
(1) any evidence of indebtedness with an original maturity of
365 days or less issued, or directly and fully guaranteed or insured,
by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States
of America is pledged in support of the timely payment thereof or such
indebtedness constitutes a general obligation of it);
(2) deposits, certificates of deposit or acceptances with an
original maturity of 365 days or less of any institution which is a
member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $200.0 million at the
time of deposit (and which may include the Collateral Agent);
(3) investments with an original maturity of 365 days or less
of any Person that is fully and unconditionally guaranteed by a bank
referred to in clause (2);
(4) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by any agency
thereof and backed as to timely payment by the full faith and credit of
the United States Government;
(5) investments in commercial paper, other than commercial
paper issued by the Company or its affiliates, of any corporation
incorporated under the laws of the United States or any State thereof,
which commercial paper has a rating at the time of purchase at least
equal to "A-1" by Standard & Poor's Ratings Services ("S&P") or at
least equal to "P-1" by ▇▇▇▇▇'▇ Investors Service, Inc. ("MOODY'S");
(6) investments in money market funds (including, but not
limited to, money market funds managed by the Collateral Agent or an
affiliate of the Collateral Agent) registered under the Investment
Company Act of 1940, as amended, rated in the highest applicable rating
category by S&P or Moody's; and
(7) a cash escrow product offered by the Collateral Agent,
which may consist of trust funds, trust accounts or interest-bearing
demand or time deposits, including certificates of deposit, which are
held by any commercial bank having a short term deposit rating at the
time of purchase of at least "A-2" or the equivalent thereof by S&P or
at least "P-2" or the equivalent thereof by Moody's.
"PERSON" means any 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.
"PLEDGE" means the lien and security interest created by this
Agreement.
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"PLEDGED APPLICABLE OWNERSHIP INTERESTS" means the Applicable Ownership
Interests (as specified in clause (A) of the definition thereof) of the Holders
with respect to the Treasury Portfolio from time to time credited to the
Collateral Account and not then released from the Pledge.
"PLEDGED NOTES" means Notes and security entitlements with respect
thereto from time to time credited to the Collateral Account and not then
released from the Pledge.
"PLEDGED PREFERRED SECURITIES" means the Preferred Securities and
security entitlements with respect thereto from time to time credited to the
Collateral Account and not then released from the Pledge.
"PLEDGED SECURITIES" means the Pledged Preferred Securities, the
Pledged Applicable Ownership Interests, the Pledged Notes or the Pledged
Treasury Securities, collectively.
"PLEDGED TREASURY SECURITIES" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.
"PROCEEDS" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, cash, instruments, securities,
financial assets (as defined in Section 8-102(a)(9) of the UCC) and other
property received, receivable or otherwise distributed upon the sale, exchange,
collection or disposition of any financial assets from time to time held in the
Collateral Account.
"PURCHASE CONTRACT AGENT" has the meaning specified in the paragraph
preceding the recitals of this Agreement.
"SEPARATE NOTES" means Notes which are not components of Income PRIDES.
"SEPARATE PREFERRED SECURITIES" means Preferred Securities which are
not components of Income PRIDES.
"STATED AMOUNT" has the meaning specified in the recitals of this
Agreement.
"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, an amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"TRANSFER" means in the case of certificated securities in registered
form, delivery as provided in Section 8-301(a) of the UCC, indorsed to the
transferee or in blank by an effective endorsement; in the case of Treasury
Securities, registration of the transferee as the owner of such Treasury
Securities on TRADES; and in the case of security entitlements, including,
without limitation, security entitlements with respect to Treasury Securities, a
securities
5
intermediary indicating by book entry that such security entitlement has been
credited to the transferee's securities account.
"TREASURY SECURITIES" means zero-coupon U.S. treasury securities (CUSIP
No. ▇▇▇▇▇▇▇▇▇) which mature on February 15, 2005.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York from time to time.
"VALUE" means, with respect to any item of Collateral on any date, as
to (1) Cash, the face amount thereof and (2) Treasury Securities or Notes, the
aggregate principal amount thereof at maturity and (3) Applicable Ownership
Interests, the appropriate percentage (as specified in clause (A) of the
definition thereof) of the aggregate principal amount at maturity of the
Treasury Portfolio and (4) the Preferred Securities, the liquidation amount
thereof.
ARTICLE 2
PLEDGE
Section 2.01. PLEDGE. Each Holder, acting through the Purchase Contract
Agent as such Holder's attorney-in-fact, hereby pledges and grants to the
Collateral Agent, as agent of and for the benefit of the Company, a continuing
first priority security interest in and to, and a lien upon and right of set-off
against, all of such Holder's right, title and interest in and to the Collateral
to secure the prompt and complete payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of the Obligations. The
Collateral Agent shall have all of the rights, remedies and recourses with
respect to the Collateral afforded a secured party by the UCC, in addition to,
and not in limitation of, the other rights, remedies and recourses afforded to
the Collateral Agent by this Agreement.
Section 2.02. CONTROL; FINANCING STATEMENT.
(a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of ARTICLE 4 of this Agreement.
(b) Subsequent to the date of initial issuance of the Securities, the
Purchase Contract Agent shall file or cause to be filed a financing statement
prepared by the Company in the Office of the Secretary of State of the State of
New York and any other jurisdictions which the Company deems necessary, signed
by the Purchase Contract Agent, as attorney-in-fact for the Holders, as Debtors,
and describing the Collateral.
Section 2.03. TERMINATION. As to each Holder, this Agreement and the
Pledge created hereby shall terminate upon the satisfaction of such Holder's
Obligations. Upon such termination, the Collateral Agent shall Transfer such
Holder's portion of the Collateral to the Purchase Contract Agent for
distribution to such Holder in accordance with his interest, free and clear of
any lien, pledge or security interest created hereby.
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ARTICLE 3
DISTRIBUTIONS ON PLEDGED COLLATERAL
Section 3.01. INCOME DISTRIBUTIONS. All income distributions
received by the Collateral Agent on account of the Pledged Preferred
Securities, the Pledged Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, the
Pledged Notes or Permitted Investments from time to time held in the
Collateral Account shall be distributed to the Purchase Contract Agent at an
account specified by the Purchase Contract Agent for the benefit of the
applicable Holders as provided in the Purchase Contracts or Purchase Contract
Agreement. Notwithstanding anything contained herein to the contrary, for the
avoidance of doubt, the cash payments at a rate of 9.5% per year of the
Stated Amount of Income PRIDES to Holders of Income PRIDES, whether current
or deferred, shall not be subject to the Pledge and therefore are not part of
the Collateral.
Section 3.02. PRINCIPAL PAYMENTS FOLLOWING TERMINATION EVENT. All
payments received by the Collateral Agent following a Termination Event of (1)
the liquidation amount of Pledged Preferred Securities or securities
entitlements thereto, (2) the Applicable Ownership Interests (as specified in
clause (A) of the definition thereof) of the aggregate principal amount of the
Treasury Portfolio, (3) the aggregate principal amount of the Pledged Notes or
securities entitlements thereto, or (4) the principal amount of the Pledged
Treasury Securities, shall be distributed to the Purchase Contract Agent for the
benefit of the applicable Holders for distribution to such Holders in accordance
with their respective interests.
Section 3.03. PRINCIPAL PAYMENTS PRIOR TO OR ON PURCHASE CONTRACT
SETTLEMENT DATE.
(a) Subject to the provisions of Section 5.08 and Section 7.02 , and
except as provided in Section 3.03(b) below, if no Termination Event shall have
occurred, all payments received by the Collateral Agent of (1) the liquidation
amount with respect to the Pledged Preferred Securities or security entitlements
with respect thereto, (2) the Applicable Ownership Interests (as specified in
clause (A) of the definition thereof) of the aggregate principal amount of the
Treasury Portfolio, (3) the aggregate principal amount with respect to the
Pledged Notes or security entitlements with respect thereto or (4) the principal
amount of Pledged Treasury Securities, shall be held and invested in Permitted
Investments until the Purchase Contract Settlement Date and on the Purchase
Contract Settlement Date distributed to the Company as provided in Section 5.07
hereof. Any balance remaining in the Collateral Account shall be distributed to
the Purchase Contract Agent for the benefit of the applicable Holders for
distribution to such Holders in accordance with their respective interests. The
Company shall instruct the Collateral Agent as to the type of Permitted
Investments in which any payments made under this Section shall be invested,
provided, however, that if the Company fails to deliver such instructions by
10:30 a.m. (
New York City time), the Collateral Agent shall invest such payments
in the Permitted Investments described in clause (7) of the definition of
Permitted Investments.
(b) All payments received by the Collateral Agent of (1) the
liquidation amount of Preferred Securities or security entitlements with respect
thereto, (2) the Applicable Ownership Interests (as specified in clause (A) of
the definition thereof) of the aggregate principal amount
7
of the Treasury Portfolio, (3) the aggregate principal amount with respect to
the Notes or security entitlements with respect thereto or (4) the principal
amount of Treasury Securities or security entitlements with respect thereto,
that, in each case, have been released from the Pledge shall be distributed to
the Purchase Contract Agent for the benefit of the applicable Holders for
distribution to such Holders in accordance with their respective interests.
Section 3.04. PAYMENTS TO PURCHASE CONTRACT AGENT. The Collateral Agent
shall use all commercially reasonable efforts to deliver payments to the
Purchase Contract Agent hereunder to the account designated by the Purchase
Contract Agent for such purpose not later than 12:00 p.m. (
New York City time)
on the Business Day such payment is received by the Collateral Agent; provided,
however, that if such payment is received on a day that is not a Business Day or
after 11:00 a.m. (New York City time) on a Business Day, then the Collateral
Agent shall use all commercially reasonable efforts to deliver such payment no
later than 10:30 a.m. (New York City time) on the next succeeding Business Day.
Section 3.05. ASSETS NOT PROPERLY RELEASED. If the Purchase Contract
Agent or any Holder shall receive any principal payments on account of financial
assets credited to the Collateral Account and not released therefrom in
accordance with this Agreement, the Purchase Contract Agent or such Holder shall
hold the same as trustee of an express trust for the benefit of the Company and,
upon receipt of an Officers' Certificate of the Company so directing, promptly
deliver the same to the Collateral Agent for credit to the Collateral Account or
to the Company for application to the Obligations of the Holders, and the
Purchase Contract Agent and Holders shall acquire no right, title or interest in
any such payments of principal amounts so received.
ARTICLE 4
CONTROL
Section 4.01. ESTABLISHMENT OF COLLATERAL ACCOUNT. The Securities
Intermediary hereby confirms that:
(a) the Securities Intermediary has established the Collateral Account;
(b) the Collateral Account is a securities account;
(c) subject to the terms of this Agreement, the Securities Intermediary
shall identify in its records the Collateral Agent as the entitlement holder
entitled to exercise the rights that comprise any financial asset credited to
the Collateral Account;
(d) all property delivered to the Securities Intermediary pursuant to
this Agreement or the Purchase Contract Agreement will be credited promptly to
the Collateral Account;
(e) all securities or other property underlying any financial assets
credited to the Collateral Account shall be registered in the name of the
Collateral Agent, indorsed to the Collateral Agent or in blank, or credited to
another securities account maintained in the name of the Collateral Agent, and
the Collateral Agent may, at any time or from time to time, in its sole
discretion, cause any or all securities or other property underlying any
financial assets credited to the Collateral Account not registered in its name
to be so registered in its name; in no case will any financial asset credited to
the Collateral Account be registered in the name of the Purchase
8
Contract Agent or any Holder, payable to the order of the Purchase Contract
Agent or any Holder or specially indorsed to the Purchase Contract Agent or any
Holder.
Section 4.02. TREATMENT AS FINANCIAL ASSETS. Each item of property
(whether investment property, financial asset, security, instrument or cash)
credited to the Collateral Account shall be treated as a financial asset.
Section 4.03. SOLE CONTROL BY COLLATERAL AGENT. Except as provided in
Section 6.01, at all times prior to the termination of the Pledge, the
Collateral Agent shall have sole control of the Collateral Account, and the
Securities Intermediary shall take instructions and directions with respect to
the Collateral Account solely from the Collateral Agent. If at any time the
Securities Intermediary shall receive an entitlement order issued by the
Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Purchase Contract Agent or any Holder or any other Person. Until termination
of the Pledge, the Securities Intermediary will not comply with any entitlement
orders issued by the Purchase Contract Agent or any Holder.
Section 4.04. SECURITIES INTERMEDIARY'S LOCATION. The Collateral
Account, and the rights and obligations of the Securities Intermediary, the
Collateral Agent, the Purchase Contract Agent and the Holders with respect
thereto, shall be governed by the laws of the State of New York. Regardless of
any provision in any other agreement, for purposes of the UCC, New York shall be
deemed to be the Securities Intermediary's location.
Section 4.05. NO OTHER CLAIMS. Except for the claims and interest of
the Collateral Agent and of the Purchase Contract Agent and the Holders in the
Collateral Account, the Securities Intermediary (without making any
investigation) does not know of any claim to, or interest in, the Collateral
Account or in any financial asset credited thereto. If any Person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against the Collateral
Account or in any financial asset carried therein, the Securities Intermediary
will promptly notify the Collateral Agent and the Purchase Contract Agent.
Section 4.06. INVESTMENT AND RELEASE. All proceeds of financial assets
from time to time deposited in the Collateral Account shall be invested and
reinvested as provided in this Agreement. At all times prior to termination of
the Pledge, no property shall be released from the Collateral Account except in
accordance with this Agreement or upon written instructions of the Collateral
Agent.
Section 4.07. STATEMENTS AND CONFIRMATIONS. The Securities Intermediary
will promptly send copies of all statements, confirmations and other
correspondence concerning the Collateral Account and any financial assets
credited thereto simultaneously to each of the Purchase Contract Agent and the
Collateral Agent at their addresses for notices under this Agreement.
Section 4.08. TAX ALLOCATIONS. The Purchase Contract Agent shall report
all items of income, gain, expense and loss recognized in the Collateral
Account, to the extent such reporting is required by law, to the Internal
Revenue Service and all state and local taxing
9
authorities in the manner required by law. Neither the Securities
Intermediary nor the Collateral Agent shall have any tax reporting duties
hereunder.
Section 4.09. NO OTHER AGREEMENTS. The Securities Intermediary has not
entered into, and prior to the termination of the Pledge will not enter into,
any agreement with any other Person relating to the Collateral Account or any
financial assets credited thereto, including, without limitation, any agreement
to comply with entitlement orders of any Person other than the Collateral Agent.
Section 4.10. POWERS COUPLED WITH AN INTEREST. The rights and powers
granted in this ARTICLE 4 to the Collateral Agent have been granted in order to
perfect its security interests in the Collateral Account, are powers coupled
with an interest and will be affected neither by the bankruptcy of the Purchase
Contract Agent or any Holder nor by the lapse of time. The obligations of the
Securities Intermediary under this ARTICLE 4 shall continue in effect until the
termination of the Pledge.
ARTICLE 5
INITIAL DEPOSIT; ESTABLISHMENT OF GROWTH PRIDES AND REESTABLISHMENT OF INCOME
PRIDES
Section 5.01. INITIAL DEPOSIT OF PREFERRED SECURITIES. Prior to or
concurrently with the execution and delivery of this Agreement, the Purchase
Contract Agent, on behalf of the initial Holders of the Income PRIDES, shall
Transfer to the Collateral Agent, for credit to the Collateral Account, the
Preferred Securities or security entitlements relating thereto, and the
Securities Intermediary shall indicate by book-entry that a securities
entitlement to such Preferred Securities has been credited to the Collateral
Account.
Section 5.02. ESTABLISHMENT OF GROWTH PRIDES.
(a) So long as no Tax Event Redemption shall have occurred, and the
Trust shall not have been dissolved and liquidated, on or at any time prior to
the fifth Business Day immediately preceding the Purchase Contract Settlement
Date, a Holder of Income PRIDES shall have the right to establish or reestablish
Growth PRIDES by substitution of Treasury Securities or security entitlements
with respect thereto for the Pledged Preferred Securities comprising a part of
such Holder's Income PRIDES in integral multiples of 20 Income PRIDES by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Treasury Securities or security entitlements with
respect thereto having a Value equal to the aggregate liquidation
amount of the Pledged Preferred Securities to be released, accompanied
by a notice, substantially in the form of Exhibit C to the Purchase
Contract Agreement, whereupon the Purchase Contract Agent shall deliver
to the Collateral Agent a notice, substantially in the form of Exhibit
A hereto, (A) stating that such Holder has Transferred Treasury
Securities or security entitlements with respect thereto to the
Collateral Agent for credit to the Collateral Account, (B) stating the
Value of the Treasury Securities or security entitlements with respect
thereto Transferred by such
10
Holder and (C) requesting that the Collateral Agent release from the
Pledge the Pledged Preferred Securities that are a component of such
Income PRIDES; and
(ii) delivering the related Income PRIDES to the Purchase
Contract Agent.
Upon receipt of such notice and confirmation that Treasury Securities
or security entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice, substantially in the form of
Exhibit B hereto, to release such Pledged Preferred Securities from the Pledge
by Transfer to the Purchase Contract Agent for distribution to such Holder, free
and clear of any lien, pledge or security interest created hereby.
(b) If a Tax Event Redemption has occurred and the Treasury Portfolio
has become a component of the Income PRIDES, on or at any time prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date,
a Holder of Income PRIDES shall have the right to establish or reestablish
Growth PRIDES by substitution of Treasury Securities or security entitlements
with respect thereto for the Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio comprising
a part of such Holder's Income PRIDES in integral multiples of 80,000 Income
PRIDES by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Treasury Securities or security entitlements with
respect thereto having a Value equal to the Value of the Applicable
Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio to be released, accompanied by a
notice, substantially in the form of Exhibit C to the Purchase Contract
Agreement, whereupon the Purchase Contract Agent shall deliver to the
Collateral Agent a notice, substantially in the form of Exhibit A
hereto, (A) stating that such Holder has Transferred Treasury
Securities or security entitlements with respect thereto to the
Collateral Agent for credit to the Collateral Account, (B) stating the
Value of the Treasury Securities or security entitlements with respect
thereto Transferred by such Holder and (C) requesting that the
Collateral Agent release from the Pledge the Applicable Ownership
Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio that are a component of such Income PRIDES;
and
(ii) delivering the related Income PRIDES to the Purchase
Contract Agent.
Upon receipt of such notice and confirmation that Treasury Securities
or security entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice, substantially in the form of
Exhibit B hereto, to release such Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio from the
Pledge by Transfer to the Purchase Contract Agent for distribution to such
Holder, free and clear of any lien, pledge or security interest created hereby.
(c) If no Tax Event Redemption shall have occurred, but the Trust shall
have been dissolved and liquidated, and the Notes have become a component of the
Income PRIDES, at any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract
11
Settlement Date, a Holder of Income PRIDES shall have the right to
substitute Treasury Securities or security entitlements with respect
thereto for the Pledged Notes comprising a part of such Holder's Income
PRIDES in integral multiples of 20 Income PRIDES by:
(i) Transferring to the Securities Intermediary for credit to
the Collateral Account Treasury Securities or security entitlements
with respect thereto having a Value equal to the aggregate principal
amount at maturity of the Pledged Notes to be released, accompanied by
a notice, substantially in the form of Exhibit C to the Purchase
Contract Agreement, whereupon the Purchase Contract Agent shall deliver
to the Collateral Agent a notice, substantially in the form of Exhibit
A hereto, (A) stating that such Holder has Transferred Treasury
Securities or security entitlements with respect thereto to the
Collateral Agent for credit to the Collateral Account, (B) stating the
Value of the Treasury Securities or securities entitlements with
respect thereto Transferred by such Holder and (C) requesting that the
Collateral Agent release from the Pledge the Pledged Notes that are a
component of such Income PRIDES; and
(ii) delivering the related Income PRIDES to the Purchase
Contract Agent.
Upon receipt of such notice and confirmation that Treasury Securities
or security entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice, substantially in the form of
Exhibit B hereto, to release such Pledged Notes from the Pledge by Transfer to
the Purchase Contract Agent for distribution to such Holder free and clear of
any lien, pledge or security interest created hereby.
Section 5.03. REESTABLISHMENT OF INCOME PRIDES.
(a) So long as no Tax Event Redemption shall have occurred, and the
Trust shall not have been dissolved and liquidated, on or at any time on or
prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, a Holder of Growth PRIDES shall have the right to reestablish
Income PRIDES by substitution of Preferred Securities or security entitlements
with respect thereto for Pledged Treasury Securities in integral multiples of 20
Growth PRIDES by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Preferred Securities or security entitlements with
respect thereto having a liquidation amount equal to the Value of the
Pledged Treasury Securities to be released, accompanied by a notice,
substantially in the form of Exhibit C to the Purchase Contract
Agreement, whereupon the Purchase Contract Agent shall deliver to the
Collateral Agent a notice, substantially in the form of Exhibit C
hereto, stating that such Holder has transferred Preferred Securities
or security entitlements with respect thereto to the Collateral Agent
for credit to the Collateral Account and requesting that the Collateral
Agent release from the Pledge the Pledged Treasury Securities related
to such Growth PRIDES; and
(ii) Delivering the related Growth PRIDES to the Purchase
Contract Agent.
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Upon receipt of such notice and confirmation that Preferred Securities
or security entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice in the form provided in Exhibit
D to release such Pledged Treasury Securities from the Pledge by Transfer to the
Purchase Contract Agent for distribution to such Holder, free and clear of any
lien, pledge or security interest created hereby.
(b) If a Tax Event Redemption has occurred and the Treasury Portfolio
has become a component of the Income PRIDES, on or at any time prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date,
a Holder of Growth PRIDES shall have the right to reestablish Income PRIDES by
substitution of Treasury Securities or security entitlements with respect
thereto for the Applicable Ownership Interests (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio comprising a part of such
Holder's Growth PRIDES in integral multiples of 80,000 Growth PRIDES by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio
having a Value equal to the Treasury Securities or security
entitlements with respect thereto to be released, accompanied by a
notice, substantially in the form of Exhibit C to the Purchase Contract
Agreement, whereupon the Purchase Contract Agent shall deliver to the
Collateral Agent a notice, substantially in the form of Exhibit A
hereto, (A) stating that such Holder has Transferred Applicable
Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio to the Collateral Agent for credit
to the Collateral Account, (B) stating the Value of the Applicable
Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio Transferred by such Holder and (C)
requesting that the Collateral Agent release from the Pledge the
Treasury Securities or security entitlements with respect thereto that
are a component of such Growth PRIDES; and
(ii) delivering the related Growth PRIDES to the Purchase
Contract Agent.
Upon receipt of such notice and confirmation that the Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio have been credited to the Collateral Account as
described in such notice, the Collateral Agent shall instruct the Securities
Intermediary by a notice, substantially in the form of Exhibit B hereto, to
release the Treasury Securities or security entitlements with respect thereto
from the Pledge by Transfer to the Purchase Contract Agent for distribution to
such Holder, free and clear of any lien, pledge or security interest created
hereby.
(c) If no Tax Event Redemption shall have occurred, but the Trust shall
have been dissolved and liquidated, and the Notes have become a component of the
Income PRIDES, at any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, a Holder of Growth PRIDES shall
have the right to reestablish Income PRIDES by substitution of Notes or security
entitlements with respect thereto for Pledged Treasury Securities in integral
multiples of 20 Growth PRIDES by:
13
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Notes or security entitlements with respect thereto
having a principal amount equal to the Value of the Pledged Treasury
Securities to be released, accompanied by a notice, substantially in
the form of Exhibit C to the Purchase Contract Agreement, whereupon the
Purchase Contract Agent shall deliver to the Collateral Agent a notice,
substantially in the form of Exhibit C hereto, stating that such Holder
has Transferred the Notes or security entitlements with respect thereto
to the Collateral Agent for credit to the Collateral Account and
requesting that the Collateral Agent release from the Pledge the
Pledged Treasury Securities related to such Growth PRIDES; and
(ii) delivering the related Growth PRIDES to the Purchase
Contract Agent.
Upon receipt of such notice and confirmation that Notes or security
entitlements with respect thereto have been credited to the Collateral Account
as described in such notice, the Collateral Agent shall instruct the Securities
Intermediary by a notice in the form provided in Exhibit D to release such
Pledged Treasury Securities from Pledge by Transfer to the Purchase Contract
Agent for distribution to such Holder, free and clear of any lien, pledge or
security interest created hereby.
Section 5.04. TERMINATION EVENT.
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that a Termination Event has occurred,
the Collateral Agent shall release all Collateral from the Pledge and shall
promptly Transfer:
(i) any Pledged Preferred Securities or security entitlements
with respect thereto or the Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio (if a Tax Event Redemption has occurred and the Treasury
Portfolio has become a component of the Income PRIDES) or the Pledged
Notes (if the Trust has been dissolved and liquidated, and the Notes or
security entitlements with respect thereto have become a component of
the Income PRIDES);
(ii) any Pledged Treasury Securities, and
(iii) payments by Holders or the Permitted Investments of such
payments pursuant to Section 5.05 hereof,
to the Purchase Contract Agent for the benefit of the Holders for distribution
to such Holders in accordance with their respective interests, free and clear of
any lien, pledge or security interest or other interest created hereby;
provided, however, if any Holder shall be entitled to receive less than $1,000
with respect to his interest in the Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, the
Purchase Contract Agent shall have the right to dispose of such interest for
cash and deliver to such Holder cash in lieu of delivering the Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio.
(b) If such Termination Event shall result from the Company becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to
14
effectuate the release and Transfer of all Pledged Preferred Securities, the
Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, the Pledged Notes, the Pledged Treasury
Securities or payments by Holders or the Permitted Investments of such payments
pursuant to Section 5.05 hereof, as the case may be, as provided by this Section
5.04, the Purchase Contract Agent shall:
(i) use its best efforts to obtain an opinion of a nationally
recognized law firm reasonably acceptable to the Collateral Agent to
the effect that, as a result of the Company being the debtor in such a
bankruptcy case, the Collateral Agent will not be prohibited from
releasing or Transferring the Collateral as provided in this Section
5.04, and shall deliver such opinion to the Collateral Agent within ten
days after the occurrence of such Termination Event, and if (A) the
Purchase Contract Agent shall be unable to obtain such opinion within
ten days after the occurrence of such Termination Event or (B) the
Collateral Agent shall continue, after delivery of such opinion, to
refuse to effectuate the release and Transfer of all Pledged Preferred
Securities, Applicable Ownership Interests (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio, all the
Pledged Notes, the Pledged Treasury Securities, the payments by Holders
or the Permitted Investments of such payments pursuant to Section 5.05
hereof or the Proceeds of any of the foregoing, as the case may be, as
provided in this Section 5.04, then the Purchase Contract Agent shall
within fifteen days after the occurrence of such Termination Event
commence an action or proceeding in the court having jurisdiction of
the Company's case under the Bankruptcy Code seeking an order requiring
the Collateral Agent to effectuate the release and transfer of all
Pledged Preferred Securities, Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, all the Pledged Notes, the Pledged Treasury Securities, or
the payments by Holders or the Permitted Investments of such payments
pursuant to Section 5.05 hereof, or as the case may be, as provided by
this Section 5.04; or
(ii) commence an action or proceeding like that described in
clause Section 5.04(b)(i) hereof within ten days after the occurrence
of such Termination Event.
Section 5.05. CASH SETTLEMENT.
(a) Upon receipt by the Collateral Agent of (1) a notice from the
Purchase Contract Agent promptly after the receipt by the Purchase Contract
Agent of a notice from a Holder of Income PRIDES that such Holder has elected,
in accordance with the procedures specified in Section 5.02(a)(i) or (d)(i) of
the Purchase Contract Agreement, respectively, to effect a Cash Settlement and
(2) payment by such Holder by deposit in the Collateral Account prior to 11:00
a.m. (New York City time) on the fourth Business Day immediately preceding the
Purchase Contract Settlement Date, in the case of an Income PRIDES, unless a Tax
Event Redemption has occurred, or on the Business Day prior to the Purchase
Contract Settlement Date in the case of Treasury Stock Purchase or an Income
PRIDES, if a Tax Event Redemption has occurred, of the Purchase Price in lawful
money of the United States by certified or cashier's check or wire transfer of
immediately available funds payable to or upon the order of the Securities
Intermediary, then the Collateral Agent shall:
15
(i) instruct the Securities Intermediary promptly to invest
any such Cash in Permitted Investments;
(ii) release from the Pledge the Income PRIDES Holder's or the
Growth PRIDES Holder's related Pledged Preferred Securities, Applicable
Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, the Pledged Notes or Pledged
Treasury Securities, as applicable, as to which such Holder has elected
to effect a Cash Settlement pursuant to this Section 5.05(a); and
(iii) instruct the Securities Intermediary to Transfer all
such Pledged Preferred Securities, Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, Pledged Notes or the Pledged Treasury Securities, as the
case may be, to the Purchase Contract Agent for the benefit of such
Holder, in each case free and clear of the Pledge created hereby, for
distribution to such Holder.
The Company shall instruct the Collateral Agent in writing as to the
type of Permitted Investments in which any such Cash shall be invested;
provided, however, that if the Company fails to deliver such written
instructions by 10:30 a.m. (New York City time), the Securities Intermediary
shall invest such Cash in the Permitted Investments described in clause (7) of
the definition of Permitted Investments.
Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Purchase Contract Settlement Date, the Collateral Agent shall
(A) instruct the Securities Intermediary to pay the portion of such proceeds and
deliver any certified or cashier's checks received, in an aggregate amount equal
to the Purchase Price, to the Company on the Purchase Contract Settlement Date,
and (B) instruct the Securities Intermediary to release any amounts in excess of
the Purchase Price earned from such Permitted Investments to the Purchase
Contract Agent for distribution to such Holder.
(b) If a Holder of Income PRIDES (if a Tax Event Redemption shall not
have occurred) notifies the Purchase Contract Agent as provided in paragraph
5.02(a)(i) of the Purchase Contract Agreement of its intention to pay the
Purchase Price in cash, but fails to make such payment as required by paragraph
5.02(a)(ii) of the Purchase Contract Agreement, such Holder shall be deemed to
have consented to the disposition of such Holder's Pledged Preferred Securities
or Pledged Notes in accordance with paragraph 5.02(a)(iii) of the Purchase
Contract Agreement.
(c) If a Holder of a Growth PRIDES or a Holder of Income PRIDES (if a
Tax Event Redemption shall have occurred) notifies the Purchase Contract Agent
as provided in paragraph 5.02(d)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by paragraph 5.02(d)(ii) of the Purchase Contract Agreement, such
Holder shall be deemed to have elected to pay the Purchase Price in accordance
with paragraph 5.02(d)(iii) of the Purchase Contract Agreement.
(d) As soon as practicable after 11:00 a.m. (New York City time) on the
fourth Business Day immediately preceding the Purchase Contract Settlement Date,
the Collateral Agent shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit
16
E hereto, stating (i) the amount of Cash that it has received with respect to
the Cash Settlement of Income PRIDES and (ii) the amount of Cash that it has
received with respect to the Cash Settlement of Growth PRIDES.
Section 5.06. EARLY SETTLEMENT. Upon receipt by the Collateral Agent of
a notice from the Purchase Contract Agent that a Holder of Securities has
elected to effect Early Settlement of its obligations under the Purchase
Contracts forming a part of such Securities in accordance with the terms of the
Purchase Contracts and Section 5.07 or Section 5.04(b)(2) (in case of an early
settlement upon a Cash Merger) of the Purchase Contract Agreement (which notice
shall set forth the number of such Purchase Contracts as to which such Holder
has elected to effect Early Settlement), 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 Amounts or Purchase Price (if such
Early Settlement is pursuant to Section 5.04(b)(2) of the Purchase Contract
Agreement) pursuant to the terms of the Purchase Contracts and the Purchase
Contract Agreement and that all conditions to such Early Settlement have been
satisfied, then the Collateral Agent shall release from the Pledge, (1) Pledged
Preferred Securities or the appropriate Applicable Ownership Interests (as
specified in clause (A) of the definitions at such term) of the Treasury
Portfolio or Pledged Notes in the case of a Holder of Income PRIDES or (2)
Pledged Treasury Securities, in the case of a Holder of Growth PRIDES, in each
case with a Value equal to the product of (x) the Stated Amount times (y) the
number of Purchase Contracts as to which such Holder has elected to effect Early
Settlement, and shall instruct the Securities Intermediary to Transfer all such
Pledged Preferred Securities or the appropriate Applicable Ownership Interests
(as specified in clause (A) of the definitions at such term) of the Treasury
Portfolio or Pledged Notes or Pledged Treasury Securities, as the case may be,
to the Purchase Contract Agent for the benefit of such Holder, in each case free
and clear of the Pledge created hereby, for distribution to such Holder. A
Growth PRIDES holder may settle early only in integral multiples of 20 Purchase
Contracts.
Section 5.07. APPLICATION OF PROCEEDS IN SETTLEMENT OF PURCHASE
CONTRACTS.
(a) If a Holder of Income PRIDES (if a Tax Event Redemption has not
occurred) has not elected to make an effective Cash Settlement by notifying the
Purchase Contract Agent in the manner provided for in Section 5.02(a)(i) in the
Purchase Contract Agreement, or has given such notice but failed to deliver the
required cash prior to 11:00 a.m. (New York City time) on the fourth Business
Day immediately preceding the Purchase Contract Settlement Date, such Holder
shall be deemed to have elected to pay for the shares of Common Stock to be
issued under such Purchase Contracts from the Proceeds of the remarketing of the
related Pledged Preferred Securities or Pledged Notes. Upon written notice of
such event from the Purchase Contract Agent, the Collateral Agent shall instruct
the Securities Intermediary to Transfer the related Pledged Preferred Securities
or Pledged Notes to the Remarketing Agent for remarketing. Upon receiving such
Pledged Preferred Securities or Pledged Notes, the Remarketing Agent, pursuant
to the terms of the Remarketing Agreement, will use reasonable efforts to
remarket such Pledged Preferred Securities or Pledged Notes. The Remarketing
Agent will deposit the Proceeds of such remarketing (less an amount not
exceeding $0.125 per each Preferred Security remarketed plus 0.25% of the
deferred and unpaid distributions or deferred and unpaid interest thereon, as
the case may be, if any, which shall be retained by the Remarketing Agent as a
fee for its services in the Remarketing) in the Collateral Account, and the
Collateral Agent shall invest the Proceeds of
17
the remarketing in Permitted Investments set forth in clause (7) of the
definition of Permitted Investments. On the Purchase Contract Settlement Date,
the Purchase Contract Agent shall give written direction to the Collateral Agent
specifying the instruction the Collateral Agent shall give to the Securities
Intermediary in order to apply a portion of the Proceeds from such remarketing
equal to the aggregate liquidation amount of the Preferred Securities or
aggregate principal amount of such Pledged Notes to satisfy in full such
Holder's obligations to pay the Purchase Price to purchase the shares of Common
Stock under the related Purchase Contracts and the balance of the Proceeds from
the remarketing, if any, that shall be transferred to the Purchase Contract
Agent for the benefit of such Holder for distribution to such Holder.
If the Remarketing Agent advises the Collateral Agent in writing that
there has been a Failed Remarketing, thus resulting in an event of default under
the Purchase Contract Agreement and hereunder, the Collateral Agent, for the
benefit of the Company, shall, at the written direction of the Company, exercise
its rights as a secured party with respect to the Pledged Preferred Securities
or Pledged Notes and use commercially reasonable efforts to dispose of the
Pledged Preferred Securities or Pledged Notes in accordance with applicable law
and apply the proceeds from such disposition towards such Holder's obligations
to pay the Purchase Price for the shares of Common Stock.
(b) If a Holder of a Growth PRIDES or a Holder of Income PRIDES (if a
Tax Event Redemption has occurred) has not elected to make an effective Cash
Settlement by notifying the Purchase Contract Agent in the manner provided for
in Section 5.02(d)(i) of the Purchase Contract Agreement, or has given such
notice but failed to make such payment in the manner required by Section
5.02(d)(ii) of the Purchase Contract Agreement, such Holder shall be deemed to
have elected to pay for the shares of Common Stock to be issued under such
Purchase Contracts from the Proceeds of the related Pledged Treasury Securities
or such Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be.
Promptly, after 11:00 a.m. (New York City time) on the Business Day immediately
prior to the Purchase Contract Settlement Date, the Collateral Agent shall
invest the Cash Proceeds of the maturing Pledged Treasury Securities or such
Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, as the case may be, in Permitted
Investments set forth in clause (7) of the definition of Permitted Investments,
unless prior to 10:30 a.m. (New York City time), the Company shall otherwise
instruct the Collateral Agent as to the type of Permitted Investments in which
any such Cash Proceeds shall be invested. Without receiving any instruction from
any such Holder, the Collateral Agent shall apply the Proceeds of the related
Pledged Treasury Securities or such Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, to the settlement of such Purchase Contracts on the Purchase
Contract Settlement Date. In the event the sum of the Proceeds from the related
Pledged Treasury Securities or such Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio as the
case may be, and the investment earnings from the investment in Permitted
Investments exceeds the aggregate Purchase Price of the Purchase Contracts being
settled thereby, the Collateral Agent shall instruct the Securities Intermediary
to distribute such excess, when received, to the Purchase Contract Agent for the
benefit of such Holder for distribution to such Holder.
18
(c) Under the Remarketing Agreement and subject to the terms of the
Supplemental Remarketing Agreement, on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, but no earlier than
the Payment Date immediately preceding the Purchase Contract Settlement Date,
Holders of Separate Preferred Securities or Separate Notes, as the case may be,
may elect to have their Separate Preferred Securities or Separate Notes, as the
case may be, remarketed by delivering their Separate Preferred Securities or
Separate Notes, as the case may be, along with a notice of such election,
substantially in the form of Exhibit F hereto, to the Custodial Agent. The
Custodial Agent shall hold Separate Preferred Securities or Separate Notes, as
the case may be, in an account separate from the Collateral Account in which the
Pledged Securities shall be held. Holders of Separate Preferred Securities or
Separate Notes, as the case may be, electing to have their Separate Preferred
Securities or Separate Notes, as the case may be, remarketed will also have the
right to withdraw that election by written notice to the Custodial Agent,
substantially in the form of Exhibit G hereto, on or prior to the fifth Business
Day immediately preceding the Purchase Contract Settlement Date
On the fourth Business Day immediately preceding the Purchase Contract
Settlement Date, the Custodial Agent shall notify the Remarketing Agent of the
aggregate Stated Amount of the Separate Preferred Securities or the aggregate
principal amount of the Separate Notes, as the case may be, to be remarketed and
will deliver to the Remarketing Agent for remarketing all Separate Preferred
Securities or Separate Notes, as the case may be, delivered to the Custodial
Agent pursuant to this Section 5.07(c) and not withdrawn pursuant to the terms
hereof prior to such date. After deducting the Remarketing Fee to the extent
permitted under the terms of the Remarketing Agreement, the Remarketing Agent
will remit to the Custodial Agent the remaining portion of the proceeds of
such Remarketing for the benefit of such Holders. In the event of a Failed
Remarketing, the Remarketing Agent will promptly return such Separate Preferred
Securities or Separate Notes, as the case may be, to the Custodial Agent for
redelivery to such Holders.
Section 5.08. TAX EVENT REDEMPTION If the Collateral Agent receives
written notice that a Tax Event Redemption has occurred prior to the Purchase
Contract Settlement Date, the Collateral Agent shall apply the Redemption Amount
to purchase the Treasury Portfolio and the Collateral Agent shall credit the
Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio to the Collateral Account and shall
transfer the Applicable Ownership Interests (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio to the Purchase Contract
Agent for distribution to the Holders of the Income PRIDES. Upon credit to the
Collateral Account of the Applicable Ownership Interests (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio having a Value
equal to the liquidation amount of the Pledged Preferred Securities or the
aggregate principal amount of the Pledged Notes, the Collateral Agent shall
cause the Securities Intermediary to release the Pledged Preferred Securities or
the Pledged Notes, as applicable, from the Collateral Account and to promptly
transfer the Pledged Preferred Securities to the Purchase Contract Agent and the
Pledged Notes to the Company, as applicable.
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ARTICLE 6
VOTING RIGHTS - PLEDGED PREFERRED SECURITIES AND PLEDGED
NOTES
Section 6.01. VOTING RIGHTS. The Purchase Contract Agent may exercise,
or refrain from exercising, any and all voting and other consensual rights
pertaining to the Pledged Preferred Securities or the Pledged Notes or any part
thereof for any purpose not inconsistent with the terms of this Agreement and in
accordance with the terms of the Purchase Contract Agreement; provided, that the
Purchase Contract Agent shall not exercise or shall not refrain from exercising
such right, as the case may be, if, in the judgment of the Purchase Contract
Agent, such action would impair or otherwise have a material adverse effect on
the value of all or any of the Pledged Preferred Securities or the Pledged
Notes; and provided, further, that the Purchase Contract Agent shall give the
Company and the Collateral Agent at least five Business Days' prior written
notice of the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of any notices and
other communications in respect of any Pledged Preferred Securities or the
Pledged Notes, including notice of any meeting at which holders of the Preferred
Securities or the Notes are entitled to vote or solicitation of consents,
waivers or proxies of holders of the Preferred Securities or Notes, the
Collateral Agent shall use reasonable efforts to send promptly to the Purchase
Contract Agent such notice or communication, and as soon as reasonably
practicable after receipt of a written request therefor from the Purchase
Contract Agent, execute and deliver to the Purchase Contract Agent such proxies
and other instruments in respect of such Pledged Preferred Securities or the
Pledged Notes (in form and substance satisfactory to the Collateral Agent) as
are prepared by the Purchase Contract Agent with respect to the Pledged
Preferred Securities or the Pledged Notes.
ARTICLE 7
RIGHTS AND REMEDIES
Section 7.01. RIGHTS AND REMEDIES OF THE COLLATERAL AGENT.
(a) In addition to the rights and remedies specified in Section 5.07
hereof or otherwise available at law or in equity, after an event of default (as
specified in Section 7.01(b) below) hereunder, the Collateral Agent shall have
all of the rights and remedies with respect to the Collateral of a secured party
under the UCC (whether or not the UCC is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Without limiting the generality of the foregoing, such remedies may
include, to the extent permitted by applicable law, (1) retention of the Pledged
Preferred Securities, Pledged Notes, Pledged Treasury Securities or the
appropriate Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio in full satisfaction of the
Holders' obligations under the Purchase Contracts and the Purchase Contract
Agreement or (2) sale of the Pledged Preferred Securities, Pledged Notes,
Pledged Treasury Securities or the appropriate Applicable Ownership Interests
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio in one or more public or private sales.
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(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, or on account of principal payments of any Pledged
Treasury Securities as provided in ARTICLE 3 hereof, in satisfaction of the
Obligations of the Holder of the Income PRIDES (if a Tax Event Redemption has
occurred) of which such appropriate Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio or the
Holder of the Growth PRIDES of which such Pledged Treasury Securities, as
applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities or the appropriate Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, any and all of the rights and remedies available to a
secured party under the UCC and the TRADES Regulations after default by a
debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the liquidation amount of
the Pledged Preferred Securities, (ii) the principal amount of the Pledged
Notes, (iii) the principal amount of the Pledged Treasury Securities and (iv)
the Applicable Ownership Interests (as specified in clause (A) of the definition
of such term) of the principal amount of the Treasury Portfolio, subject, in
each case, to the provisions of ARTICLE 3 hereof, and as otherwise granted
herein.
(d) The Purchase Contract Agent and each Holder of Securities agrees
that, from time to time, upon the written request of the Collateral Agent or the
Purchase Contract Agent, such Holder shall execute and deliver such further
documents and do such other acts and things as the Collateral Agent may
reasonably request in order to maintain the Pledge, and the perfection and
priority thereof, and to confirm the rights of the Collateral Agent hereunder.
The Purchase Contract Agent shall have no liability to any Holder for executing
any documents or taking any such acts requested by the Collateral Agent
hereunder, except for liability for its own negligent acts, its own negligent
failure to act or its own willful misconduct.
Section 7.02. SUBSTITUTION OF NOTES OR TREASURY PORTFOLIO. If the Trust
shall have been dissolved and liquidated prior to the Purchase Contract
Settlement Date, the Purchase Contract Agent shall Transfer to the Collateral
Agent Notes having a Value equal to the liquidation amount of the Pledged
Preferred Securities for credit to the Collateral Account. Upon credit to the
Collateral Account of such Notes, the Collateral Agent shall release the Pledged
Preferred Securities from the Collateral Account and shall promptly transfer the
same to the Purchase Contract Agent.
Notwithstanding the foregoing, in the event of a dissolution and
liquidation of the Trust, if a Liquidation Distribution is to be distributed in
lieu of the Notes as provided for in the Declaration, the Liquidation
Distribution shall be credited to the Collateral Account by the Property
Trustee, on or prior to 12:30 p.m., New York City time, on the date of
distribution of the Liquidation Distribution, by federal funds check or wire
transfer of immediately available funds. The Collateral Agent is hereby
authorized to present the Pledged Preferred Securities for
21
payment as may be required by their terms. Upon receipt of such funds, the
Pledged Preferred Securities shall be released from the Collateral Account. In
the event such funds are credited to the Collateral Account, the Collateral
Agent, at the written direction of the Company, shall instruct the Securities
Intermediary to (a) apply an amount equal to the Redemption Amount of such
Liquidation Distribution to purchase the Treasury Portfolio from the Quotation
Agent for credit to the Collateral Account and (b) promptly remit the remaining
portion of such Liquidation Distribution, if any, to the Purchase Contract Agent
for payment to the Holders of Income PRIDES.
Section 7.03. TAX EVENT REDEMPTION. Upon the occurrence of a Tax Event
Redemption prior to the Purchase Contract Settlement Date, the Redemption
Amount, plus any accumulated and unpaid distributions, or any accrued and unpaid
interest, as the case may be, payable on the Tax Event Redemption Date with
respect to the Applicable Principal Amount shall be credited to the Collateral
Account by the Property Trustee or, in case there has been a dissolution of the
Trust and the distribution of the related Notes, by the Indenture Trustee, on or
prior to 12:30 p.m., New York City time on such Tax Event Redemption Date, by
federal funds check or wire transfer of immediately available funds. The
Collateral Agent is hereby authorized to present the Pledged Preferred
Securities or the Pledged Notes for payment as may be required by their
respective terms. Upon receipt of such funds, the Pledged Preferred Securities
or Pledged Notes, as the case may be, shall be released from the Collateral
Account. In the event such funds are credited to the Collateral Account, the
Collateral Agent, at the written direction of the Company, shall instruct the
Securities Intermediary to (a) apply an amount equal to the Redemption Amount of
such funds to purchase the Treasury Portfolio from the Quotation Agent for
credit to the Collateral Account and (b) promptly remit the remaining portion of
such funds, if any, to the Purchase Contract Agent for payment to the Holders of
Income PRIDES.
Section 7.04. SUBSTITUTIONS. Whenever a Holder has the right to
substitute Treasury Securities, Preferred Securities, Notes or security
entitlements for any of them or the appropriate Applicable Ownership Interests
of the Treasury Portfolio, as the case may be, for financial assets held in the
Collateral Account, such substitution shall not constitute a novation of the
security interest created hereby.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 8.01. REPRESENTATIONS AND WARRANTIES. Each Holder from time to
time, acting through the Purchase Contract Agent as attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represents
and warrants to the Collateral Agent (with respect to such Holder's interest in
the Collateral), which representations and warranties shall be deemed repeated
on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and lien
on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and, in
the case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral
22
Agent for credit to the Collateral Account, free and clear of any security
interest, lien, encumbrance, call, liability to pay money or other restriction
other than the security interest and lien granted under ARTICLE 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral Agent for
credit to the Collateral Account, the Collateral Agent, for the benefit of the
Company, will have a valid and perfected first priority security interest
therein (assuming that any central clearing operation or any securities
intermediary or other entity not within the control of the Holder involved in
the Transfer of the Collateral, including the Collateral Agent and the
Securities Intermediary, gives the notices and takes the action required of it
hereunder and under applicable law for perfection of that interest and assuming
the establishment and exercise of control pursuant to ARTICLE 4 hereof); and
(d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security interest,
lien or other encumbrance on the Collateral other than the security interest and
lien granted under ARTICLE 2 hereof or violate any provision of any existing law
or regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.
Section 8.02. COVENANTS. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other security interest whatsoever over the Collateral or any part of it other
than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the Pledge hereunder,
transferred in connection with the Transfer of the Securities.
ARTICLE 9
THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES INTERMEDIARY
It is hereby agreed as follows:
Section 9.01. APPOINTMENT, POWERS AND IMMUNITIES. The Collateral Agent,
the Custodial Agent or the Securities Intermediary shall act as agent for the
Company hereunder with such powers as are specifically vested in the Collateral
Agent, the Custodial Agent or the Securities Intermediary, as the case may be,
by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. The Collateral Agent, Custodial Agent and
Securities Intermediary shall:
(a) have no duties or responsibilities except those expressly set forth
in this Agreement and no implied covenants or obligations shall be inferred from
this Agreement
23
against the Collateral Agent, Custodial Agent and Securities Intermediary, nor
shall the Collateral Agent, Custodial Agent and Securities Intermediary be bound
by the provisions of any agreement by any party hereto beyond the specific terms
hereof;
(b) not be responsible for any recitals contained in this Agreement, or
in any certificate or other document referred to or provided for in, or received
by it under, this Agreement, the Securities or the Purchase Contract Agreement,
or for the value, validity, effectiveness, genuineness, enforceability (other
than as against the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be) or sufficiency of this Agreement, the
Securities or the Purchase Contract Agreement or any other document referred to
or provided for herein or therein or for any failure by the Company or any other
Person (except the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be) to perform any of its obligations hereunder or
thereunder or for the perfection, priority or, except as expressly required
hereby, maintenance of any security interest created hereunder;
(c) not be required to initiate or conduct any litigation or collection
proceedings hereunder (except pursuant to written directions furnished under
Section 9.02 hereof, subject to Section 9.06 hereof);
(d) not be responsible for any action taken or omitted to be taken by
it hereunder or under any other document or instrument referred to or provided
for herein or in connection herewith or therewith, except for its own negligence
or willful misconduct; and
(e) not be required to advise any party as to selling or retaining, or
taking or refraining from taking any action with respect to, any securities or
other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the
Collateral Agent 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,
Custodial Agent or Securities Intermediary to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder. In no event shall the Collateral Agent or Securities Intermediary be
liable for any amount in excess of the Value of the Collateral. Notwithstanding
the foregoing, each of the Collateral Agent and the Securities Intermediary in
its individual capacity hereby waives any right of setoff, bankers' lien, liens
or perfection rights as securities intermediary or any counterclaim with respect
to any of the Collateral.
Section 9.02. INSTRUCTIONS OF THE COMPANY. The Company shall have the
right, by one or more written instruments executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral Agent,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement and (ii) the Collateral
Agent shall be adequately indemnified as provided herein. Nothing contained in
this Section 9.02 shall impair the right of the Collateral Agent in its
24
discretion to take any action or omit to take any action which it deems proper
and which is not inconsistent with such direction.
Section 9.03. RELIANCE. Each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent shall be entitled to rely upon any
certification, order, judgment, opinion, notice or other written communication
(including, without limitation, any thereof by e-mail or similar electronic
means, telecopy, telex or facsimile) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons
(without being required to determine the correctness of any fact stated therein)
and consult with and rely upon advice, opinions and statements of legal counsel
and other experts selected by the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be. As to any matters not expressly
provided for by this Agreement, the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall in all cases be fully protected in acting, or
in refraining from acting, hereunder in accordance with instructions given by
the Company in accordance with this Agreement.
Section 9.04. RIGHTS IN OTHER CAPACITIES. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any other Person
interested herein and any Holder of Securities (and any of their respective
subsidiaries or affiliates) as if it were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent, the Securities Intermediary and their
affiliates may accept fees and other consideration from the Purchase Contract
Agent and any Holder of Securities without having to account for the same to the
Company; provided that each of the Securities Intermediary, the Custodial Agent
and the Collateral Agent covenants and agrees with the Company that it shall not
accept, receive or permit there to be created in favor of itself and shall take
no affirmative action to permit there to be created in favor of any other
Person, any security interest, lien or other encumbrance of any kind in or upon
the Collateral other than the lien created by the Pledge.
Section 9.05. NON-RELIANCE. None of the Securities Intermediary, the
Custodial Agent or the Collateral Agent shall be required to keep itself
informed as to the performance or observance by the Purchase Contract Agent or
any Holder of Securities of this Agreement, the Purchase Contract Agreement, the
Securities or any other document referred to or provided for herein or therein
or to inspect the properties or books of the Purchase Contract Agent or any
Holder of Securities. None of the Collateral Agent, the Custodial Agent or the
Securities Intermediary shall have any duty or responsibility to provide the
Company with any credit or other information concerning the affairs, financial
condition or business of the Purchase Contract Agent or any Holder of Securities
(or any of their respective affiliates) that may come into the possession of the
Collateral Agent, the Custodial Agent or the Securities Intermediary or any of
their respective affiliates.
Section 9.06. COMPENSATION AND INDEMNITY. The Company agrees to:
(a) pay the Collateral Agent, the Custodial Agent and the Securities
Intermediary from time to time such compensation as shall be agreed in writing
between the Company and the
25
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, for all services rendered by them hereunder;
(b) indemnify and hold harmless the Collateral Agent, the Custodial
Agent and the Securities Intermediary and each of their respective directors,
officers, agents and employees (collectively, the "INDEMNITEES"), harmless from
and against any and all claims, liabilities, losses, damages, fines, penalties
and expenses (including reasonable fees and expenses of counsel) (collectively,
"LOSSES" and individually, a "LOSS") that may be imposed on, incurred by, or
asserted against, the Indemnitees or any of them for following any instructions
or other directions upon which either the Collateral Agent, the Custodial Agent
or the Securities Intermediary is entitled to rely pursuant to the terms of this
Agreement; and
(c) in addition to and not in limitation of paragraph (b) immediately
above, indemnify and hold the Indemnitees and each of them harmless from and
against any and all Losses that may be imposed on, incurred by or asserted
against, the Indemnitees or any of them in connection with or arising out of the
Collateral Agent's, the Custodial Agent's or the Securities Intermediary's
acceptance or performance of its powers and duties under this Agreement,
provided the Collateral Agent, the Custodial Agent or the Securities
Intermediary has not acted with negligence or engaged in willful misconduct or
bad faith with respect to the specific Loss against which indemnification is
sought.
Section 9.07. FAILURE TO ACT. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, then at its sole option, each of the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall be entitled,
after prompt notice to the Company and the Purchase Contract Agent, to refuse to
comply with any and all claims, demands or instructions with respect to such
property or funds so long as such dispute or conflict shall continue, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall not
be or become liable in any way to any of the parties hereto for its failure or
refusal to comply with such conflicting claims, demands or instructions. The
Collateral Agent, the Custodial Agent and the Securities Intermediary shall be
entitled to refuse to act until either:
(a) such conflicting or adverse claims or demands shall have been
finally determined by a court of competent jurisdiction or settled by agreement
between the conflicting parties as evidenced in a writing satisfactory to the
Collateral Agent, the Custodial Agent or the Securities Intermediary; or
(b) the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall have received security or an indemnity satisfactory to it
sufficient to save it harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which it may incur by reason of its acting.
The Collateral Agent, the Custodial Agent and the Securities Intermediary may in
addition elect to commence an interpleader action or seek other judicial relief
or orders as the Collateral Agent, the Custodial Agent or the Securities
Intermediary may deem necessary. Notwithstanding anything contained herein to
the contrary, none of the Collateral Agent, the Custodial Agent or
26
the Securities Intermediary shall be required to take any action that is in its
opinion contrary to law or to the terms of this Agreement, or which would in its
opinion subject it or any of its officers, employees or directors to liability.
Section 9.08. RESIGNATION.
(a) Subject to the appointment and acceptance of a successor Collateral
Agent, Custodial Agent or Securities Intermediary as provided below:
(i) the Collateral Agent, the Custodial Agent and the
Securities Intermediary may resign at any time by giving notice thereof
to the Company and the Purchase Contract Agent as attorney-in-fact for
the Holders of Securities;
(ii) the Collateral Agent, the Custodial Agent and the
Securities Intermediary may be removed at any time by the Company; and
(iii) if the Collateral Agent, the Custodial Agent or the
Securities Intermediary fails to perform any of its material
obligations hereunder in any material respect for a period of not less
than 20 days after receiving written notice of such failure by the
Purchase Contract Agent and such failure shall be continuing, the
Collateral Agent, the Custodial Agent or the Securities Intermediary
may be removed by the Purchase Contract Agent, acting at the direction
of the Holders of Securities.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Collateral Agent , the Custodial Agent or the Securities Intermediary
pursuant to clause (iii) of this Section 9.08(a). Upon any resignation or
removal, the Company shall have the right to appoint a successor Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be. If no
successor Collateral Agent, Custodial Agent or Securities Intermediary shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's, Custodial Agent's and Securities
Intermediary's giving of notice of resignation or the Company or the Purchase
Contract Agent giving notice of such removal, then the retiring Collateral
Agent, Custodial Agent and Securities Intermediary may petition any court of
competent jurisdiction for the appointment of a successor Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be. Each of the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall be a
bank or a national banking association which has an office (or an agency office)
in New York City with a combined capital and surplus of at least $50,000,000 and
shall not be the Purchase Contract Agent or any of its affiliates. Upon the
acceptance of any appointment as Collateral Agent, the Custodial Agent or the
Securities Intermediary hereunder by a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be, such successor Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, and the retiring Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be, shall take all appropriate
action to transfer any money and property held by it hereunder (including the
Collateral) to such successor. The retiring Collateral Agent, Custodial Agent or
Securities Intermediary shall, upon such succession, be discharged from its
duties and obligations as Collateral Agent, Custodial Agent or
27
Securities Intermediary hereunder. After any retiring Collateral Agent's,
Custodial Agent's or Securities Intermediary's resignation hereunder as
Collateral Agent, Custodial Agent or Securities Intermediary, the provisions of
this ARTICLE 9 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Collateral
Agent, Custodial Agent or Securities Intermediary. Any resignation or removal of
the Collateral Agent hereunder, at a time when the same Person is acting as the
Collateral Agent, the Custodial Agent and the Securities Intermediary, shall be
deemed for all purposes of this Agreement as the simultaneous resignation or
removal of the Custodial Agent and the Securities Intermediary. Any resignation
or removal of the Securities Intermediary hereunder, at a time when the same
Person is acting as the Collateral Agent, the Custodial Agent and the Securities
Intermediary, shall be deemed for all purposes of this Agreement as the
simultaneous resignation or removal of the Custodial Agent and the Collateral
Agent.
Section 9.09. RIGHT TO APPOINT AGENT OR ADVISOR. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 9.09
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
Section 9.10. SURVIVAL. The provisions of this Article 9 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.
Section 9.11. EXCULPATION. Anything contained in this Agreement to the
contrary notwithstanding, in no event shall any of the Collateral Agent, the
Custodial Agent or the Securities Intermediary or their officers, directors,
employees or agents be liable under this Agreement to any third party for
indirect, special, punitive, or consequential loss or damage of any kind
whatsoever, including, but not limited to, lost profits, whether or not the
likelihood of such loss or damage was known to the Collateral Agent, the
Custodial Agent or the Securities Intermediary, or any of them.
ARTICLE 10
AMENDMENT
Section 10.01. 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, to:
(a) evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company;
(b) evidence and provide for the acceptance of appointment hereunder by
a successor Collateral Agent, Custodial Agent, Securities Intermediary or
Purchase Contract Agent;
28
(c) add to the covenants of the Company for the benefit of the Holders,
or surrender any right or power herein conferred upon the Company, provided such
covenants or such surrender do not adversely affect the validity, perfection or
priority of the Pledge created hereunder; or
(d) cure any ambiguity (or formal defect), correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, or make any other provisions with respect to such matters or questions
arising under this Agreement, provided such action shall not adversely affect
the interests of the Holders.
Section 10.02. AMENDMENT WITH CONSENT OF HOLDERS. With the consent of
the Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of such Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent, the Securities Intermediary, the
Custodial Agent and the Collateral Agent may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided, however, that no
such supplemental agreement shall, without the unanimous consent of the Holders
of each Outstanding Security adversely affected thereby:
(a) change the amount or type of Collateral underlying a Security
(except for the rights of holders of Income PRIDES to substitute the Treasury
Securities for the Pledged Preferred Securities, the Pledged Notes or the
Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the principal amount of the Treasury Portfolio, as the case may
be, or the rights of Holders of Growth PRIDES to substitute Preferred
Securities, Notes or the Applicable Ownership Interests (as specified in clause
(A) of the definition of such term) of the principal amount of the Treasury
Portfolio, as applicable, for the Pledged Treasury Securities), impair the right
of the Holder of any Security to receive distributions on the underlying
Collateral or otherwise adversely affect the Holder's rights in or to such
Collateral; or
(b) otherwise effect any action that would require the consent of the
Holder of each Outstanding Security affected thereby pursuant to the Purchase
Contract Agreement if such action were effected by an agreement supplemental
thereto; or
(c) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment;
provided that if any amendment or proposal referred to above would adversely
affect only the Income PRIDES or only the Growth PRIDES, then only the affected
class of Holders as of the record date for the Holders entitled to vote thereon
will be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of Holders of not less
than a majority of such class; provided further that the unanimous consent of
the Holders of each outstanding Purchase Contract of such class affected thereby
shall be required to approve any amendment or proposal specified in clauses (a)
through (c) above.
29
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 10.03. EXECUTION OF AMENDMENTS. In executing any amendment
permitted by this Section, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 7.01 of the Purchase Contract Agreement with
respect to the Purchase Contract Agent) shall be fully 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 10.04. EFFECT OF AMENDMENTS. Upon the execution of any
amendment under this Section, this Agreement shall be modified in accordance
therewith, and such amendment shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered under the
Purchase Contract Agreement shall be bound thereby.
Section 10.05. REFERENCE OF AMENDMENTS. Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Section may, and shall if required by the Collateral
Agent or the Purchase Contract Agent, bear a notation in form approved by the
Purchase Contract Agent and the Collateral Agent as to any matter provided for
in such amendment. If the Company shall so determine, new Certificates so
modified as to conform, in the opinion of the Collateral Agent, the Purchase
Contract Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for Certificates representing Outstanding
Securities.
ARTICLE 11
MISCELLANEOUS
Section 11.01. NO WAIVER. No failure on the part of the Collateral
Agent, the Securities Intermediary or any of their respective agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Collateral Agent, the Securities
Intermediary or any of their respective agents of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
Section 11.02. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Company,
the Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Holders from time to time of the Securities, acting through the Purchase
Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this
30
Agreement or the transactions contemplated hereby. The Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Holders from
time to time of the Securities, acting through the Purchase Contract Agent as
their attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
Section 11.03. NOTICES. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "ADDRESS FOR NOTICES" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
Section 11.04. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.
Section 11.05. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 11.06. SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
Section 11.07. EXPENSES, ETC. The Company agrees to reimburse the
Collateral Agent, the Custodial Agent and the Securities Intermediary for:
(a) all reasonable costs and expenses of the Collateral Agent and the
Securities Intermediary (including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent and the Securities Intermediary), in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver of
any of the terms of this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent and the
Securities Intermediary (including, without limitation, reasonable fees and
expenses of counsel) in connection with (i) any enforcement or proceedings
resulting or incurred in connection with
31
causing any Holder of Securities to satisfy its obligations under the Purchase
Contracts forming a part of the Securities and (ii) the enforcement of this
Section 11.07(b);
(c) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any other document referred to herein and all
costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated hereby;
(d) all reasonable fees and expenses of any agent or advisor appointed
by the Collateral Agent and consented to by the Company under Section 9.09 of
this Agreement; and
(e) any other out-of-pocket costs and expenses reasonably incurred by
the Collateral Agent and the Securities Intermediary in connection with the
performance of their duties hereunder.
Section 11.08. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of the Securities under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a ▇▇▇▇▇▇▇.
Section 11.09. NOTICE OF TAX EVENT, TAX EVENT REDEMPTION AND
TERMINATION EVENT. Upon the occurrence of a Tax Event, a Tax Event Redemption or
a Termination Event, the Company shall deliver written notice to the Collateral
Agent and the Securities Intermediary. Upon the written request of the
Collateral Agent or the Securities Intermediary, the Company shall inform such
party whether or not a Tax Event, a Tax Event Redemption or a Termination Event
has occurred.
[SIGNATURES ON THE FOLLOWING PAGE]
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CINERGY CORP. The Bank of New York,
as Purchase Contract Agent and
as attorney-in-fact of the Holders
from time to time of the Securities
By:_____________________________ By:__________________________
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
Cinergy Corp. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer Attention: Corporate Trust Administration
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇ Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Cinergy Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
JPMorgan Chase Bank,
as Collateral Agent, Custodial Agent
and as Securities Intermediary
By:_____________________________
Name:
Title:
Address for Notices:
JPMorgan Chase Bank
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Institutional Trust Services
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
33
EXHIBIT A
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Establishment of Growth PRIDES)
JPMorgan Chase Bank
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Institutional Trust Services
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Re: Income PRIDES of
Cinergy Corp.
(the "COMPANY") and CC Funding Trust I
The securities account of JPMorgan Chase Bank, as Collateral
Agent, maintained by the Securities Intermediary and
designated "JPMorgan Chase Bank, as Collateral Agent of
Cinergy Corp., as pledgee of The Bank of New York, as the
Purchase Contract Agent on behalf of and as attorney-in-fact
for the Holders" (the "COLLATERAL ACCOUNT")
Please refer to the
Pledge Agreement, dated as of December 18, 2001
(the "
PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, Custodial
Agent and Securities Intermediary, and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Income PRIDES from time to
time. Capitalized terms used herein but not defined shall have the meaning set
forth in the
Pledge Agreement.
We hereby notify you in accordance with Section 5.02 of the
Pledge
Agreement that the holder of securities named below (the "HOLDER") has elected
to substitute $__________ Value of Treasury Securities or security entitlements
with respect thereto in exchange for an equal Value of [Pledged Preferred
Securities] [Pledged Notes] [Pledged Applicable Ownership Interests] relating to
_________ Income PRIDES and has delivered to the undersigned a notice stating
that the Holder has Transferred such Treasury Securities or security
entitlements thereto to the Securities Intermediary, for credit to the
Collateral Account.
A-1
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or security entitlements thereto have
been credited to the Collateral Account, to release to the undersigned an equal
Value of [Pledged Preferred Securities] [Pledged Notes] [Pledged Applicable
Ownership Interests] in accordance with Section 5.02 of the
Pledge Agreement.
The Bank of New York,
Date:______________ as Purchase Contract Agent and as attorney-in-fact
of the Holders from time to time of the Securities
By:__________________________
Name:
Title:
A-2
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements with respect thereto for the [Pledged
Preferred Securities] [Pledged Notes] [Pledged Applicable Ownership Interests]:
----------------------------- -----------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
------------------------------
Address
------------------------------
------------------------------
A-3
EXHIBIT B
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Establishment of Growth PRIDES)
JPMorgan Chase Bank
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Institutional Trust Services
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Re: Income PRIDES of
Cinergy Corp. (the
"COMPANY") and CC Funding Trust I (the "TRUST")
The securities account of JPMorgan Chase Bank, as Collateral Agent,
maintained by the Securities Intermediary and designated "JPMorgan
Chase Bank, as Collateral Agent of Cinergy Corp., as pledgee of The
Bank of New York, as the Purchase Contract Agent on behalf of and as
attorney-in-fact for the Holders" (the "COLLATERAL ACCOUNT")
Please refer to the
Pledge Agreement, dated as of December 18, 2001
(the "PLEDGE AGREEMENT"), among the Company, you, as Securities Intermediary,
The Bank of New York, as Purchase Contract Agent and as attorney-in-fact for the
holders of Income PRIDES from time to time, and the undersigned, as Collateral
Agent. Capitalized terms used herein but not defined shall have the meanings set
forth in the Pledge Agreement.
When you have confirmed that $__________ Value of Treasury Securities
or security entitlements thereto has been credited to the Collateral Account by
or for the benefit of _________, as Holder of Income PRIDES (the "HOLDER"), you
are hereby instructed to release from the Collateral Account an equal Value of
[Preferred Securities or security entitlements with respect thereto] [Notes or
security entitlements with respect thereto] [Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio] relating to _____ Income PRIDES of the Holder by Transfer to the
Purchase Contract Agent.
JPMorgan Chase Bank,
as Collateral Agent
Dated:_______________
By:_______________________
Name:
Title:
B-1
Please print name and address of Holder:
-------------------------------- --------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
---------------------------------
Address
---------------------------------
---------------------------------
B-2
EXHIBIT C
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Reestablishment of Income PRIDES)
JPMorgan Chase Bank
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Institutional Trust Services
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Re: ____________ Income PRIDES of Cinergy Corp. (the "COMPANY")
and CC Funding Trust I (the "TRUST")
Please refer to the Pledge Agreement dated as of December 18, 2001 (the
"PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, Custodial
Agent and Securities Intermediary, and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Income PRIDES from time to
time. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.03(a) of the Pledge
Agreement that the holder of securities listed below (the "HOLDER") has elected
to substitute [$ Value of [Preferred Securities or security entitlements
thereto] [Notes or security entitlements thereto]] in exchange for $__________
Value of Pledged Treasury Securities and has delivered to the undersigned a
notice stating that the holder has Transferred such [Preferred Securities or
security entitlements with respect thereto] [Notes or security entitlements with
respect thereto] [Applicable Ownership Interests (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio] to the Securities
Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such [Preferred Securities or security entitlements with
respect thereto] [Notes or security entitlements with respect thereto]
[Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio] have been credited to the Collateral
Account, to release to the undersigned $__________ Value of Treasury Securities
or security
C-1
entitlements thereto related to _____ Income PRIDES of such Holder in accordance
with Section 5.03 of the Pledge Agreement.
The Bank of New York,
as Purchase Contract Agent
Dated:_______________ By:_______________________
Name:
Title:
C-2
Please print name and address of Holder electing to substitute [Preferred
Securities or security entitlements with respect thereto] [Pledged Notes or
security entitlements with respect thereto] [Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio] for Pledged Treasury Securities:
---------------------------- -------------------------
Name Social Security or other
Taxpayer Identification Number, if any
---------------------------------
Address
---------------------------------
---------------------------------
C-3
EXHIBIT D
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Reestablishment of Income PRIDES)
JPMorgan Chase Bank
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Institutional Trust Services
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Re: ___________ Income PRIDES of Cinergy Corp.
(the "COMPANY") and CC Funding Trust I (the "TRUST")
The securities account of JPMorgan Chase Bank, as Collateral
Agent, maintained by the Securities Intermediary and
designated "JPMorgan Chase, as Collateral Agent of Cinergy
Corp., as pledgee of The Bank of New York, as the Purchase
Contract Agent on behalf of and as attorney-in-fact for the
Holders" (the "COLLATERAL ACCOUNT")
Please refer to the Pledge Agreement dated as of December 18, 2001 (the
"PLEDGE AGREEMENT"), among the Company, you, as Securities Intermediary,
Collateral Agent and Custodial Agent, The Bank of New York, as Purchase Contract
Agent and as attorney-in-fact for the holders of Income PRIDES from time to
time, and the undersigned, as Collateral Agent. Capitalized terms used herein
but no defined shall have the meaning set forth in the Pledge Agreement.
When you have confirmed that $ __________ Value of [Preferred
Securities or security entitlements with respect thereto] [Notes or security
entitlements with respect thereto] [Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio] has
been credited to the Collateral Account by or for the benefit of
________________, as Holder of Income PRIDES (the "HOLDER"), you are hereby
instructed to
D-1
release from the Collateral Account $________________ Value of Treasury
Securities or security entitlements with respect thereto by Transfer to the
Purchase Contract Agent.
JPMorgan Chase Bank,
as Collateral Agent
Dated:_______________ By:_______________________
Name:
Title:
------------------------------- --------------------------
Name Social Security or other
Taxpayer Identification Number, if any
-------------------------------
Address
-------------------------------
-------------------------------
D-2
EXHIBIT E
NOTICE OF CASH SETTLEMENT FROM COLLATERAL
AGENT TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Re: __________ Income PRIDES of Cinergy Corp.
(the "COMPANY") and CC Funding Trust I (the "TRUST")
Please refer to the Pledge Agreement dated as of December 18, 2001
(the "PLEDGE AGREEMENT"), by and among you, the Company, the undersigned,
JPMorgan Chase Bank, as Collateral Agent, Custodial Agent and Securities
Intermediary. Unless otherwise defined herein, terms defined in the Pledge
Agreement are used herein as defined therein.
In accordance with Section 5.05(d) of the Pledge Agreement, we hereby
notify you that as of 11:00 a.m. (New York City time) on the fourth Business Day
immediately preceding ___________, we have received (i) $ _______________ in
immediately available funds paid in an aggregate amount equal to the Purchase
Price due to the Company on the Purchase Contract Settlement Date with respect
to ________________ Income PRIDES and (ii) $ ___________ in immediately
available funds paid in an aggregate amount equal to the Purchase Price due to
the Company on the Purchase Contract Settlement Date with respect to ______
Growth PRIDES.
JPMorgan Chase Bank,
as Collateral Agent
Dated:_______________ By:_______________________
Name:
Title:
E-1
EXHIBIT F
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
JPMorgan Chase Bank
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Institutional Trust Services
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Re: Preferred Securities of CC Funding Trust I (the "TRUST")
The undersigned hereby notifies you in accordance with Section 5.07(c)
of the Pledge Agreement, dated as of December 18, 2001 (the "PLEDGE AGREEMENT"),
among the Company, you, as Collateral Agent, Custodial Agent and Securities
Intermediary, The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the holders of Income PRIDES from time to time, that the
undersigned elects to deliver [$_____________ aggregate Stated Amount of
Separate Preferred Securities] [$______________ aggregate principal amount of
Separate Notes] for delivery to the Remarketing Agent on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date for remarketing
pursuant to Section 5.07(c) of the Pledge Agreement. The undersigned will, upon
request of the Remarketing Agent, execute and deliver any additional documents
deemed by the Remarketing Agent or by the Company to be necessary or desirable
to complete the sale, assignment and transfer of the [Separate Preferred
Securities] [Separate Notes] tendered hereby. Capitalized terms used herein but
no defined shall have the meaning set forth in the Pledge Agreement.
The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions". The undersigned hereby instructs you, in the event of
Failed Remarketing, upon receipt of the [Separate Preferred Securities]
[Separate Notes] tendered herewith from the Remarketing Agent, to be delivered
to the person(s) and the address(es) indicated herein under "B. Delivery
Instructions."
With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the [Separate Preferred Securities] [Separate Notes] tendered hereby
and that the undersigned is the record owner of any [Preferred Securities]
[Notes] tendered herewith in physical form or a participant in The Depositary
Trust Company ("DTC") and the beneficial owner of any Preferred Securities
tendered herewith by book-entry transfer to your account at DTC and (ii) agrees
to be bound by the terms and conditions of Section 5.07(c) of the Pledge
Agreement.
Date:_____________
____________________________________
By:_________________________________
F-1
Name:
Title:
Signature Guarantee:________________
--------------------------- ------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
---------------------------
Address
---------------------------
---------------------------
F-2
--------------------------------------------------------------------------------
A. PAYMENT INSTRUCTIONS
--------------------------------------------------------------------------------
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
--------------------------------------------------------------------------------
Name(s)
--------------------------------------------------------------------------------
(Please Print)
Address
(Please Print)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Zip Code)
--------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
--------------------------------------------------------------------------------
B. DELIVERY INSTRUCTIONS
--------------------------------------------------------------------------------
In the event of a Failed Remarketing, [Preferred Securities] [Notes] which are
in physical form should be delivered to the person(s) set forth below and mailed
to the address set forth below.
Name(s)
--------------------------------------------------------------------------------
(Please Print)
Address
(Please Print)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Zip Code)
F-3
--------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
In the event of a Failed Remarketing, [Preferred Securities] [Notes] which are
in book-entry form should be credited to the account at The Depositary Trust
Company set forth below.
------------------
DTC Account Number
Name of Account Party:_________________________________
F-4
EXHIBIT G
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
JPMorgan Chase Bank
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Institutional Trust Services
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Re: Preferred Securities of CC Funding Trust I (the "TRUST")
The undersigned hereby notifies you in accordance with Section 5.07(c)
of the Pledge Agreement, dated as of December 18, 2001 (the "PLEDGE AGREEMENT"),
among the Company, you, as Collateral Agent, Custodial Agent and Securities
Intermediary, The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the holders of Income PRIDES from time to time, that the
undersigned elects to withdraw the [$_____ aggregate Stated Amount of Separate
Preferred Securities] [$_________ aggregate principal amount of Separate Notes]
delivered to the Custodial Agent on _________, 200_ for remarketing pursuant to
Section 5.07(c) of the Pledge Agreement. The undersigned hereby instructs you to
return such [Preferred Securities] [Notes] to the undersigned in accordance with
the undersigned's instructions. With this notice, the Undersigned hereby agrees
to be bound by the terms and conditions of Section 5.07(c) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
Date:_____________
------------------------------------
By:_________________________________
Name:
Title:
Signature Guarantee:_________________
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Name Social Security or other Taxpayer
Identification Number, if any
---------------------------
Address
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G-1
