1
EXHIBIT 4(z)
CMS ENERGY CORPORATION
and
THE CHASE MANHATTAN BANK, as Collateral Agent
and
THE CHASE MANHATTAN BANK, as Securities Intermediary
and
THE BANK OF NEW YORK, as Purchase Contract Agent and
as attorney in fact for the Holders
PLEDGE AGREEMENT
Dated as of August 22, 2000
2
TABLE OF CONTENTS
Section 1. Definitions.............................................................................2
Section 2. Pledge..................................................................................6
Section 2.1 Pledge...................................................................6
Section 2.2 Control; Financing Statement.............................................7
Section 2.3 Termination..............................................................7
Section 3. Distributions on Pledged Collateral.....................................................7
Section 3.1 Income Distributions.....................................................7
Section 3.2 Principal Payments Following Termination Event...........................8
Section 3.3 Principal Payments Prior To or On Purchase Contract
Settlement Date..........................................................8
Section 3.4 Payments to Purchase Contract Agent......................................9
Section 3.5 Assets Not Properly Released.............................................9
Section 4. Control................................................................................10
Section 4.1 Establishment of Collateral Account.....................................10
Section 4.2 Treatment as Financial Assets...........................................10
Section 4.3 Sole Control by Collateral Agent........................................10
Section 4.4 Securities Intermediary's Location......................................11
Section 4.5 No Other Claims.........................................................11
Section 4.6 Investment and Release..................................................11
Section 4.7 Statements and Confirmations............................................11
Section 4.8 Tax Allocations.........................................................12
Section 4.9 No Other Agreements.....................................................12
Section 4.10 Powers Coupled With An Interest.........................................12
Section 5. Initial Deposit; Establishment of Treasury PEPS Units and
Re-establishment of PEPS Units.........................................................12
Section 5.1 Initial Deposit of Trust Preferred Securities...........................12
Section 5.2 Establishment of Treasury PEPS Units....................................13
Section 5.3 Re-establishment of PEPS Units..........................................15
Section 5.4 Termination Event.......................................................17
Section 5.5 Cash Settlement.........................................................18
Section 5.6 Early Settlement........................................................21
Section 5.7 Application of Proceeds in Settlement of Purchase
Contracts...............................................................21
Section 5.8 Tax Event Redemption....................................................24
3
Section 6. Voting Rights - Trust Preferred Securities and Pledged Subordinated
Deferrable Notes.......................................................................24
Section 7. Rights and Remedies....................................................................26
Section 7.1 Rights and Remedies of the Collateral Agent.............................26
Section 7.2 Substitution of Subordinated Deferrable Notes...........................27
Section 7.3 Tax Event Redemption....................................................27
Section 7.4 Substitutions...........................................................28
Section 8. Representations and Warranties; Covenants..............................................28
Section 8.1 Representations and Warranties..........................................28
Section 9. The Collateral Agent and the Securities Intermediary...................................30
Section 9.1 Appointment, Powers and Immunities......................................30
Section 9.2 Instructions of the Company.............................................31
Section 9.3 Reliance by Collateral Agent and Securities
Intermediary............................................................31
Section 9.4 Rights in Other Capacities..............................................32
Section 9.5 Non-Reliance on Collateral Agent and Securities
Intermediary............................................................32
Section 9.6 Compensation and Indemnity..............................................33
Section 9.7 Failure to Act..........................................................33
Section 9.8 Resignation of Collateral Agent and Securities
Intermediary............................................................34
Section 9.9 Right to Appoint Agent or Advisor.......................................36
Section 9.10 Survival................................................................36
Section 9.11 Exculpation.............................................................37
Section 10. Amendment.............................................................................37
Section 10.1 Amendment Without Consent of Holders....................................37
Section 10.2 Amendment With Consent of Holders.......................................38
Section 10.3 Execution of Amendments.................................................39
Section 10.4 Effect of Amendments....................................................39
Section 10.5 Reference to Amendments.................................................39
Section 11. Miscellaneous.........................................................................40
Section 11.1 No Waiver...............................................................40
Section 11.2 Governing Law...........................................................40
Section 11.3 Notices.................................................................40
Section 11.4 Successors and Assigns..................................................41
Section 11.5 Counterparts............................................................41
Section 11.6 Severability............................................................41
Section 11.7 Expenses, etc...........................................................41
4
Section 11.8 Security Interest Absolute..............................................42
Section 11.9 Notice of Tax Event, Tax Event Redemption and
Termination Event.......................................................43
EXHIBIT A INSTRUCTION FROM PURCHASE CONTRACT]
AGENT TO COLLATERAL AGENT (Establishment
of Treasury PEPS Units) ........................................................A-1
EXHIBIT B INSTRUCTION FROM COLLATERAL AGENT TO
SECURITIES INTERMEDIARY (Establishment of
Treasury PEPS Units)............................................................B-1
EXHIBIT C INSTRUCTION FROM PURCHASE CONTRACT
AGENT TO COLLATERAL AGENT (Reestablishment
of PEPS Units ) ................................................................C-1
EXHIBIT D INSTRUCTION FROM COLLATERAL AGENT TO
SECURITIES INTERMEDIARY (Reestablishment of
PEPS Units).....................................................................D-1
EXHIBIT E NOTICE OF CASH SETTLEMENT FROM SECURITIES
INTERMEDIARY TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts) ......................................................E-1
5
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of August 22, 2000, among CMS Energy
Corporation, a Michigan corporation (the "COMPANY"), The Chase Manhattan Bank, a
New York banking corporation, as collateral agent (in such capacity, together
with its successors in such capacity, the "COLLATERAL AGENT") and as securities
intermediary with respect to the Collateral Account (in such capacity, together
with its successors in such capacity, the "SECURITIES INTERMEDIARY"), and The
Bank of New York, a New York banking corporation, as purchase contract agent and
as attorney-in-fact of the Holders from time to time of the Securities under the
Purchase Contract Agreement (in such capacity, together with its successors in
such capacity, the "PURCHASE CONTRACT AGENT").
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement dated as of the date hereof (as modified and supplemented and
in effect from time to time, the "PURCHASE CONTRACT AGREEMENT"), pursuant to
which there may be issued up to 10,000,000 Premium Equity Participating Security
Units--PEPS(SM) Units (the "SECURITIES") (including 1,200,000 Securities
relating to the over-allotment option granted to the underwriters pursuant to
the Underwriting Agreement).
Each PEPS Unit, at issuance, consists of a unit comprised of (a) a
stock purchase contract (the "PURCHASE CONTRACT") under which the Holder will
purchase from the Company on the Purchase Contract Settlement Date, for an
amount equal to $25 (the "STATED AMOUNT"), a number of shares of CMS Energy
Corporation common stock, par value $0.01 ("COMMON STOCK"), equal to the
Settlement Rate, and (b) beneficial ownership of a Trust Preferred Security (a
"PREFERRED SECURITY") issued by CMS Energy Trust III (the "TRUST"), having a
liquidation amount equal to the Stated Amount and maturing on August 18, 2004.
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 Account to secure the
Obligations.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact of the Holders from time to time of the Securities, agree as
follows:
6
SECTION 1. DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, 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 EARLY SETTLEMENT," "CASH MERGER EARLY SETTLEMENT
DATE," "CASH MERGER EVENT," "CASH SETTLEMENT," "CERTIFICATE," "EARLY
SETTLEMENT," "EARLY SETTLEMENT AMOUNT," "EARLY SETTLEMENT DATE," "HOLDER,"
"OFFICERS' CERTIFICATE," "OPINION OF COUNSEL," "OUTSTANDING SECURITIES," "PEPS
UNIT," "PURCHASE CONTRACT," "PURCHASE CONTRACT SETTLEMENT DATE," "PURCHASE
PRICE," "REMARKETING AGENT," "REMARKETING AGREEMENT," "SUBORDINATED DEFERRABLE
NOTES," "SETTLEMENT RATE," "TERMINATION EVENT," "TREASURY PEPS UNIT," and
"UNDERWRITING AGREEMENT;"
(e) the following terms have the meanings assigned to them in the
Amended and Restated Declaration of Trust of CMS Energy Trust III, of even date
herewith (the "DECLARATION"): "APPLICABLE OWNERSHIP INTEREST," "APPLICABLE
PRINCIPAL AMOUNT," "CASH MERGER EARLY REDEMPTION," "CASH MERGER EARLY REDEMPTION
DATE," "FAILED REMARKETING," "INDENTURE," "INDENTURE TRUSTEE," "PRIMARY TREASURY
DEALER," "PROPERTY TRUSTEE," "QUOTATION AGENT," "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(f):
"AGREEMENT" means this Pledge Agreement, as the same may be
7
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 ACCOUNT" means the collective reference to:
(1) the securities account of The Chase Manhattan Bank, as
Collateral Agent, maintained by the Securities Intermediary and
designated "The Chase Manhattan Bank, as Collateral Agent of CMS Energy
Corporation, as pledgee of The Bank of New York, as the Purchase
Contract Agent on behalf of and as attorney-in-fact for the Holders";
(2) 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 PEPS Units 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 PEPS Units from time to
time; (C) the Subordinated Deferrable Notes and security entitlements
relating thereto which are a component of the PEPS Units from time to
time, (D) any Treasury Securities and security entitlements relating
thereto delivered from time to time upon establishment of Treasury PEPS
Units in accordance with Section 5.2 hereof and (E) payments made by
Holders pursuant to Section 5.5 hereof;
(3) all Proceeds of any of the foregoing (whether such
Proceeds arise before or after the commencement of any proceeding under
any applicable bankruptcy, insolvency or other similar law, by or
against the pledgor or with respect to the pledgor); and
(4) all powers and rights now owned or hereafter acquired
under or with respect to the Collateral Account
[((2), (3) and (4), being collectively referred to as the
"COLLATERAL")].
"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.
"OBLIGATIONS" means, with respect to each Holder, the collective
reference to all obligations and liabilities of such Holder under such Holder's
Purchase Contract,
8
the Purchase Contract Agreement, and this Agreement or any other document made,
delivered or given in connection herewith or therewith, in each case whether on
account of principal, interest (including, without limitation, interest accruing
before and after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding, relating to such Holder,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the Company or the
Collateral Agent or the Securities Intermediary that are required to be paid by
the Holder pursuant to the terms of any of the foregoing agreements).
"PERMITTED INVESTMENTS" means any one of the following which shall
mature not later than the next succeeding Business Day:
(1) any evidence of indebtedness with an original maturity of 365 days or less
issued, or directly and fully guaranteed or insured, by the United States of
America or any agency or instrumentality thereof (provided that the full faith
and credit of the United States of America is pledged in support of the timely
payment thereof or such indebtedness constitutes a general obligation of it);
(2) deposits, certificates of deposit or acceptances with an original maturity
of 365 days or less of any institution which is a member of the Federal Reserve
System having combined capital and surplus and undivided profits of not less
than $200.0 million at the time of deposit (and which may include the Collateral
Agent); (3) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (2); (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 Xxxxx'x Investors Service, Inc.
("MOODY'S"); and (6) investments in money market funds (including, but not
limited to, money market funds managed by the Collateral Agent or an affiliate
of the Collateral Agent) registered under the Investment Company Act of 1940, as
amended, rated in the highest applicable rating category by S&P or Moody's.
"PERSON" means any legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political
9
subdivision thereof.
"PLEDGE" means the lien and security interest created by this
Agreement.
"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 SUBORDINATED DEFERRABLE NOTES" means Subordinated Deferrable
Notes and security entitlements with respect thereto from time to time credited
to the Collateral Account and not then released from the Pledge.
"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 ss. 8-102(a)(9) of the UCC) and other property
received, receivable or otherwise distributed upon the sale, exchange,
collection or disposition of any financial assets from time to time held in the
Collateral Account.
"PURCHASE CONTRACT AGENT" has the meaning specified in the paragraph
preceding the recitals of this Agreement.
"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 ss. 8-301(a) of the UCC, indorsed to the
transferee or in blank by an effective endorsement; in the case of Treasury
Securities, registration of the transferee as the owner of such Treasury
Securities on TRADES; and in the case of security entitlements, including,
without limitation, security entitlements with respect to Treasury Securities, a
securities intermediary indicating by book entry that such security entitlement
has been credited to the transferee's securities account.
10
"TREASURY SECURITIES" means zero-coupon U.S. treasury securities (Cusip
No. 000000XX0) which mature on August 15, 2003.
"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, the aggregate
principal amount thereof at maturity and (3) the Preferred Securities, the
liquidation amount thereof.
SECTION 2. PLEDGE.
SECTION 2.1 PLEDGE.
Each Holder, acting through the Purchase Contract Agent as such
Holder's attorney-in-fact, and the Purchase Contract Agent each hereby pledges
and grants to the Collateral Agent, as agent of and for the benefit of the
Company to secure the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Obligations, a
continuing first priority security interest in and to, and a lien upon and right
of set-off against, all right, title and interest of such Holders and the
Purchase Contract Agent in and to (a) in the Preferred Securities constituting a
part of the Securities and any Treasury Securities delivered in exchange for any
Preference Shares and any Preference Shares delivered in exchange for any
Treasury Securities, in accordance with Section 5.3 hereof, in each case that
have been Transferred to or received by the Collateral Agent and not released by
the Collateral Agent to such Holders under the provisions of this Agreement; (b)
in payments made by Holders pursuant to Section 5.5; (c) in the Collateral
Account and all securities, financial assets, Cash and other property credited
thereto and all security entitlements related thereto; and (d) all Proceeds of
the foregoing [(all of the foregoing, collectively, the "COLLATERAL")]. 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 2.2 CONTROL; FINANCING STATEMENT.
(a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of Section 4 of this Agreement. The Holders from time
to
11
time acting through the Purchase Contract Agent as their attorney in fact and
the Purchase Contract Agent each hereby authorize and direct the Securities
Intermediary (without any further consent of the Purchase Contract Agent or any
Holder) to comply with instructions and entitlement orders relating to the
Collateral Account and any securities entitlements with respect thereto issued
by the Collateral Agent as provided in Section 4 hereof.
(b) Subsequent to the date of initial issuance of the Securities, the
Purchase Contract Agent shall deliver to the Collateral Agent a financing
statement prepared by the Company for filing in the Office of the Secretary of
State of Michigan 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 2.3 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 Securities Intermediary 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.
SECTION 3. DISTRIBUTIONS ON PLEDGED COLLATERAL.
SECTION 3.1 INCOME DISTRIBUTIONS.
All income distributions received by the Securities Intermediary on
account of the Preferred Securities, the Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, the Subordinated Deferrable Notes or Permitted Investments from time
to time held in the Collateral Account shall be distributed to the Purchase
Contract Agent (ABA No. 000000000, XXX Xx. 000-000, X/X Xx. x, Xx: CMS Energy
Corp.) for the benefit of the applicable Holders as provided in the Purchase
Contracts or Purchase Contract Agreement.
SECTION 3.2 PRINCIPAL PAYMENTS FOLLOWING TERMINATION EVENT.
All payments received by the Securities Intermediary following a
Termination Event of the liquidation or redemption amount of Pledged Preferred
Securities or securities entitlements thereto, or (2) the Applicable Ownership
Interests (as specified in Clause (A) of the definition thereof) of the Treasury
Portfolio, (3) the aggregate principal amount or redemption amount of the
Pledged Subordinated Deferrable
12
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 3.3 PRINCIPAL PAYMENTS PRIOR TO OR ON PURCHASE CONTRACT
SETTLEMENT DATE.
(a) Subject to the provisions of Section 7.2, and except as provided in
clause 3.3(b) below, if no Termination Event shall have occurred, all payments
received by the Securities Intermediary of (1) the liquidation or redemption
amount with respect to the Pledged Preferred Securities or security entitlements
with respect thereto, (2) Applicable Ownership Interests (as specified in Clause
(A) of the definition thereof) of the Treasury Portfolio, (3) the aggregate
principal amount or redemption amount with respect to the Pledged Subordinated
Deferrable 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 5.7 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. Upon the request of the Securities Intermediary, the Company shall
instruct the Securities Intermediary 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 Securities Intermediary shall invest such payments in the
Permitted Investments described in clause 6 of the definition of Permitted
Investments.
(b) All payments received by the Securities Intermediary of (1) the
liquidation or redemption amount of Preferred Securities or security
entitlements with respect thereto, (2) Applicable Ownership interests (as
specified in Clause (A) of the definition thereof) of the Treasury Portfolio,
(3) the aggregate principal amount or redemption amount with respect to the
Subordinated Deferrable 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.
13
SECTION 3.4 PAYMENTS TO PURCHASE CONTRACT AGENT.
The Securities Intermediary 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 Securities Intermediary; 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 Securities Intermediary 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 3.5 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
Securities Intermediary 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.
SECTION 4. CONTROL
SECTION 4.1 ESTABLISHMENT OF COLLATERAL ACCOUNT.
The Securities Intermediary hereby confirms that:
(1) the Securities Intermediary has established the Collateral
Account;
(2) the Collateral Account is a securities account;
(3) subject to the terms of this Agreement, the Securities
Intermediary shall treat the Purchase Contract Agent as entitled to
exercise the rights that comprise any financial asset credited to the
Collateral Account;
(4) all property delivered to the Securities Intermediary
pursuant to this Agreement or the Purchase Contract Agreement will be
credited promptly to the Collateral Account;
14
(5) all securities or other property underlying any financial
assets credited to the Collateral Account shall be registered in the
name of the Securities Intermediary, indorsed to the Securities
Intermediary or in blank, or credited to another securities account
maintained in the name of the Securities Intermediary, and in no case
will any financial asset credited to the Collateral Account be
registered in the name of the Purchase Contract Agent 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 4.2 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 4.3 SOLE CONTROL BY COLLATERAL AGENT.
Except as provided in Section 6, 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 4.4 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 4.5 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
15
(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 4.6 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 4.7 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 4.8 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 authorities under the names and taxpayer identification numbers of
the Holders which are the beneficial owners thereof. Neither the Securities
Intermediary nor the Collateral Agent shall have any tax reporting duties
hereunder.
SECTION 4.9 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.
16
SECTION 4.10 POWERS COUPLED WITH AN INTEREST.
The rights and powers granted in this Section 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 Section 4 shall
continue in effect until the termination of the Pledge.
SECTION 5. INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY PEPS UNITS AND RE-
ESTABLISHMENT OF PEPS UNITS
SECTION 5.1 INITIAL DEPOSIT OF TRUST 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
PEPS Units, shall Transfer to the Securities Intermediary, 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 5.2 ESTABLISHMENT OF TREASURY PEPS UNITS.
(a) So long as no Tax Event Redemption shall have occurred and the
Trust shall not have been dissolved and liquidated, at any time prior to or on
the seventh Business Day immediately preceding August 18, 2003, a Holder of PEPS
Units shall have the right to establish or reestablish Treasury PEPS Units by
substitution of Treasury Securities or security entitlements with respect
thereto for the Pledged Preferred Securities comprising a part of such Holder's
PEPS Units in integral multiples of 40 PEPS Units by:
(1) 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 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
Securities Intermediary for credit to the Collateral Account, (B)
stating the Value of the Treasury Securities or security entitlements
with respect thereto Transferred by such Holder and (C) requesting that
the Collateral Agent release from the Pledge the Pledged
17
Preferred Securities that are a component of such PEPS Units; and
(2) delivering the related PEPS Units 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 PEPS Units, a Holder of PEPS Units shall not have
the right to establish or reestablish Treasury PEPS Units.
(c) If no Tax Event Redemption shall have occurred, but the Trust shall
have been dissolved and liquidated, and the Subordinated Deferrable Notes have
become a component of the PEPS Units, at any time on or prior to the seventh
Business Day immediately preceding August 18, 2003, a Holder of PEPS Units shall
have the right to substitute Treasury Securities or security entitlements with
respect thereto for the Pledged Subordinated Deferrable Notes comprising a part
of such Holder's PEPS Units in integral multiples of 40 PEPS Units by:
(1) 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 Pledged Subordinated Deferrable 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 Securities Intermediary 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 Subordinated Deferrable Notes that are a component of such PEPS
Units; and
(2) delivering the related PEPS Units to the Purchase Contract
Agent.
18
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 Subordinated Deferrable 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.
(d) Upon credit to the Collateral Account of Treasury Securities or
security entitlements with respect thereto delivered by a Holder of PEPS Units
and receipt of the related instruction from the Collateral Agent, the Securities
Intermediary shall release the Pledged Preferred Securities or the Pledged
Subordinated Deferrable Notes, as the case may be, and shall promptly transfer
the same to the Purchase Contract Agent for distribution to such Holder, free
and clear of any lien, pledge or security interest created hereby.
SECTION 5.3 RE-ESTABLISHMENT OF PEPS UNITS.
(a) So long as no Tax Event Redemption shall have occurred and the
Trust shall not have been dissolved and liquidated, at any time on or prior to
the seventh Business Day immediately preceding August 18, 2003, a Holder of
Treasury PEPS Units shall have the right to reestablish PEPS Units by
substitution of Preferred Securities or security entitlements with respect
thereto for Pledged Treasury Securities in integral multiples of 40 Treasury
PEPS Units by:
(1) Transferring to the Securities Intermediary 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 Trust Preferred
Securities or security entitlements with respect thereto to the
Securities Intermediary for credit to the Collateral Account and
requesting that the Collateral Agent release from the Pledge the
Pledged Treasury Securities related to such Treasury PEPS Units; and
(2) Delivering the related Treasury PEPS Units to the Purchase
Contract Agent.
19
Upon receipt of such notice and confirmation that Preferred Securities
or security entitlements 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 PEPS Units, a holder of a Treasury PEPS Unit shall
not have the right to reestablish a PEPS Unit.
(c) If no Tax Event Redemption shall have occurred, but the Trust shall
have been dissolved and liquidated, and the Subordinated Deferrable Notes have
become a component of the PEPS Units, at any time on or prior to the seventh
Business Day immediately preceding August 18, 2003, a Holder of Treasury PEPS
Units shall have the right to reestablish PEPS Units by substitution of
Subordinated Deferrable Notes or security entitlements with respect thereto for
Pledged Treasury Securities in integral multiples of 40 Treasury PEPS Units by:
(1) Transferring to the Securities Intermediary for credit to
the Collateral Account Subordinated Deferrable 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
Subordinated Deferrable Notes or security entitlements with respect
thereto to the Securities Intermediary for credit to the Collateral
Account and requesting that the Collateral Agent release from the
Pledge the Pledged Treasury Securities related to such Treasury PEPS
Units; and
(2) delivering the related Treasury PEPS Units to the Purchase
Contract Agent.
Upon receipt of such notice and confirmation that Subordinated
Deferrable 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
20
created hereby.
(d) Upon credit to the Collateral Account of Preferred Securities or
security entitlements with respect thereto or Subordinated Deferrable Notes or
security entitlements with respect thereto, as the case may be, delivered by a
Holder of Treasury PEPS Units and receipt of the related instruction from the
Collateral Agent, the Securities Intermediary shall release the Pledged Treasury
Securities and shall promptly transfer the same to the Purchase Contract Agent
for distribution to such Holder, free and clear of any lien, pledge or security
interest created hereby.
SECTION 5.4 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:
(1) any Pledged Preferred Securities or security entitlements
with respect thereto or the Applicable Ownership Interest (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 PEPS Units) or the Pledged Subordinated
Deferrable Notes (if the Trust has been dissolved and liquidated, and
the Subordinated Deferrable Notes or security entitlements with respect
thereto have become a component of the PEPS Units);
(2) any Pledged Treasury Securities, and
(3) payments by Holders (or the Permitted Investments of such
payments) pursuant to Section 5.5 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 Interest (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 Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio.
21
(b) If such Termination Event shall result from the Company's becoming
a debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Preferred Securities, the Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, the Pledged
Subordinated Deferrable Notes, the Pledged Treasury Securities or payments by
Holders (or the Permitted Investments of such payments) pursuant to Section 5.5
hereof, as the case may be, as provided by this Section 5.4, the Purchase
Contract Agent shall:
(1) use its best efforts to obtain an opinion of a nationally
recognized law firm reasonably acceptable to the Collateral Agent to
the effect that, as a result of the Company's being the debtor in such
a bankruptcy case, the Collateral Agent will not be prohibited from
releasing or Transferring the Collateral as provided in this Section
5.4, 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 Preferred
Securities, Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio, all the
Pledged Subordinated Deferrable Notes, the Pledged Treasury Securities,
the payments by Holders or the Permitted Investments of such payments
pursuant to Section 5.5 hereof or the Proceeds of any of the foregoing,
as the case may be, as provided in this Section 5.4, 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
Interest (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio, all the Pledged Subordinated Deferrable Notes,
the Pledged Treasury Securities, or the payments by Holders or the
Permitted Investments of such payments pursuant to Section 5.5 hereof,
or as the case may be, as provided by this Section 5.4; or
(2) commence an action or proceeding like that described in
clause 5.4(b)(1) hereof within ten days after the occurrence of such
Termination Event.
22
SECTION 5.5 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 PEPS Units 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 (i) in the event of
a Cash Settlement that is not made in connection with a Cash Merger Early
Settlement, prior to or on 11:00 a.m. (New York City time) on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, in the case of
a PEPS Unit, unless a Tax Event Redemption has occurred, or on the Business Day
prior to August 18, 2003 in the case of Treasury PEPS or a PEPS Unit, if a Tax
Event Redemption has occurred, or (ii) in the event of a Cash Settlement that is
made in connection with a Cash Merger Early Settlement, by 5:00 p.m. (New York
City time) on the last Business Day of the Early Settlement Week, 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:
(1) instruct the Securities Intermediary promptly to invest
any such Cash in Permitted Investments;
(2) release from the Pledge the PEPS Unit holder's or the
Treasury PEPS Unit holder's related Pledged Preferred Securities,
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, the Pledged
Subordinated Deferrable Notes or Pledged Treasury Securities, as
applicable, as to which such Holder has elected to effect a Cash
Settlement pursuant to this Section 5.5(a); and
(3) instruct the Securities Intermediary to Transfer all such
Pledged Preferred Securities, Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, Pledged Subordinated Deferrable 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.
Upon the request of the Securities Intermediary, the Company shall
instruct the Securities Intermediary 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 instructions by 10:30 a.m. (New York City time), the
Securities Intermediary shall invest such Cash in the Permitted Investments
described in clause 6 of the definition of Permitted Investments.
23
Upon receipt of the proceeds upon the maturity of the Permitted
Investments on, in the case of a Purchase Contract not to be settled in
connection with a Cash Merger Early Settlement, the Purchase Contract Settlement
Date, and, in the case of a Purchase Contract to be settled in connection with
a Cash Merger Early Settlement, the Cash Merger Early 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 same
day, 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 PEPS Units (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 failure shall constitute an
Event of Default under the Purchase Contract Agreement and hereunder and such
Holder shall be deemed to have consented to the disposition of such Holder's
Pledged Preferred Securities or Pledged Subordinated Deferrable Notes in
accordance with paragraph 5.02(a)(iii) of the Purchase Contract Agreement.
(c) If a Holder of a Treasury PEPS Unit or a Holder of PEPS Unit (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, except
with respect to Cash Merger Early Settlements, such failure shall constitute an
Event of Default under the Purchase Contract Agreement and hereunder and 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
fifth Business Day immediately preceding the Purchase Contract Settlement Date
in the case of Cash Settlements that are not Cash Merger Settlements, and in the
case of a Cash Merger Early Settlement as soon as practicable after 5:00 p.m.
(New York City time) on the last Business Day of the applicable Settlement Week
the Securities Intermediary shall deliver to the Purchase Contract Agent a
notice, substantially in the form of Exhibit E hereto, stating (i) the amount of
cash that it has received with respect to the Cash Settlement of PEPS Units and
(ii) the amount of cash that it has received with respect to the Cash Settlement
of Treasury PEPS Units.
24
SECTION 5.6 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 5.9 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 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
Interest (as specified in clause (A) of the definitions at such term) of the
Treasury Portfolio or Pledged Subordinated Deferrable Notes in the case of a
Holder of PEPS Units or (2) Pledged Treasury Securities, in the case of a Holder
of Treasury PEPS Units, 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 Interest (as specified in clause (A) of the
definitions at such term) of the Treasury Portfolio or Pledged Subordinated
Deferrable Notes or Pledged Treasury Securities, as the case may be, to the
Purchase Contract Agent for the benefit of such Holder, in each case free and
clear of the Pledge created hereby, for distribution to such Holder. A Treasury
PEPS Unit holder may settle early only in integral multiples of 40 Purchase
Contracts.
SECTION 5.7 APPLICATION OF PROCEEDS IN SETTLEMENT OF PURCHASE
CONTRACTS.
(i) If, in the case of a Cash Settlement that is not a Cash Merger
Event Early Settlement, a Holder of PEPS Units (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 fifth Business
Day immediately preceding the Purchase Contract Settlement Date, such failure
shall constitute an Event of Default under the Purchase Contract Agreement and
hereunder and 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
25
remarketing of the related Pledged Preferred Securities or Pledged
Subordinated Deferrable Notes.
(ii) If, in the case of a Cash Settlement that is a Cash Merger Early
Settlement, a Holder of PEPS Units (if a Tax Event Redemption has not occurred)
has 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 but failed to deliver the required cash prior to 5:00 P.M.
(New York City time) on the last Business Day of the applicable Early Settlement
Week, such failure shall constitute an Event of Default under the Purchase
Contract Agreement and hereunder and 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 sale or redemption of the related Pledged Preferred
Securities or Pledged Subordinated Deferrable Notes.
(iii) In the case described under paragraph (i) above, upon 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 Subordinated Deferrable Notes to the Remarketing Agent for
remarketing. Upon receiving such Pledged Preferred Securities or Pledged
Subordinated Deferrable Notes, the Remarketing Agent, pursuant to the terms of
the Remarketing Agreement, will use reasonable efforts to remarket such Pledged
Preferred Securities or Pledged Subordinated Deferrable Notes. The Remarketing
Agent will deposit the Proceeds of such remarketing (less $0.125 per each
Preferred Security remarketed, which shall be retained by the Remarketing Agent
as a fee for its services in the Remarketing) in the Collateral Account, and the
Securities Intermediary shall invest the Proceeds of the remarketing in
Permitted Investments in clause 6 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
Subordinated Deferrable Note 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 a further
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, dispose of the Pledged
26
Preferred Securities or Pledged Subordinated Deferrable Notes in accordance with
applicable law and satisfy in full, from such disposition, such Holder's
obligations to pay the Purchase Price for the shares of Common Stock.
In the case described under paragraph (ii) of this Section 5.7(a), upon
notice of such event from the Purchase Contract Agent, the Collateral Agent
shall instruct the Securities Intermediary to hold such Pledged Preferred
Securities or Pledged Subordinated Deferrable Notes until they may be redeemed
pursuant to Section 6 of this Agreement and in accordance with the terms of the
Declaration or the Fourth Supplemental Indenture, as the case may be, and then
to deposit the Proceeds of such redemption in the Collateral Account, and 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 redemption
equal to the aggregate liquidation amount of such Preferred Securities or
aggregate principal amount of such Pledged Subordinated Deferrable 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 redemption, if any, that shall be transferred to the
Purchase Contract Agent for the benefit of such Holder for distribution to such
Holder.
(a) If a Holder of a Treasury PEPS Unit or a Holder of a PEPS Unit (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 5.4(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, except with respect to Cash
Merger Early Settlements, such failure shall constitute an Event of Default
under the Purchase Contract Agreement and hereunder and 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 Interest (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 Securities Intermediary
shall invest the Cash Proceeds of the maturing Pledged Treasury Securities or
such Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury portfolios, as the case may be, in Permitted
Investments in clause 6 of the definition of Permitted Investments, unless prior
to 10:30 a.m. (New York City time), the Company shall otherwise instruct the
Securities Intermediary as to the type of Permitted Investments in which any
such Cash Proceeds shall be invested. Without receiving any instruction from any
27
such Holder, the Collateral Agent shall apply the Proceeds of the related
Pledged Treasury Securities or such Applicable Ownership Interest (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 Interest (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.
SECTION 5.8 TAX EVENT REDEMPTION.
If the Securities Intermediary receives notice that a Tax Event
Redemption has occurred prior to the Purchase Contract Settlement Date, the
Securities Intermediary shall apply the Redemption Amount to purchase the
Treasury Portfolio and the Securities Intermediary shall credit the Applicable
Ownership Interest (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 Interest (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 PEPS Units. Upon credit to the Collateral
Account of the Applicable Ownership Interest (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 Subordinated Deferrable Notes, the Securities
Intermediary shall release the Pledged Preferred Securities or the Pledged
Subordinated Deferrable Notes, as applicable, from the Collateral Account and
shall promptly transfer the Pledged Preferred Securities to the Trust and the
Pledged Subordinated Deferrable Notes to the Company, as applicable.
SECTION 6. VOTING RIGHTS - TRUST PREFERRED SECURITIES AND
PLEDGED SUBORDINATED DEFERRABLE NOTES
So long as no Event of Default under the Purchase Contract Agreement or
hereunder exists, except with respect to a "Cash Merger Event Offer," as such
term is defined in the Declaration (a "Declaration Cash Merger Event Offer"),
and a "Cash Merger Event Offer," as such term is defined in the Fourth
Supplemental Indenture (an "Indenture Cash Merger Event Offer"), 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 Subordinated Deferrable
28
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 Company or the Collateral 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 Subordinated Deferrable 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 Subordinated
Deferrable Notes, including notice of any meeting at which holders of the
Preferred Securities or the Pledged Subordinated Deferrable Notes are entitled
to vote or solicitation of consents, waivers or proxies of holders of the
Preferred Securities or Subordinated Deferrable 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 Subordinated
Deferrable 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 Subordinated Deferrable Notes.
The Collateral Agent shall have the power to elect to have the Pledged
Preferred Securities or Pledged Subordinated Deferrable Notes redeemed in
connection with a Declaration Cash Merger Event Offer or an Indenture Cash
Merger Event Offer, as the case may be. With respect to Pledged Preferred
Securities, the Collateral Agent shall, in accordance with the procedures set
forth in the Declaration, elect to redeem exactly those Pledged Preferred
Securities which correspond to PEPS Units (i) whose holders have elected to make
a Cash Settlement in connection with a Cash Merger Early Settlement and (ii) in
respect of whose settlement obligations there is an Event of Default under
Section 5.5(b) of this Agreement. With respect to Pledged Subordinated
Deferrable Notes, the Collateral Agent shall, in accordance with the procedures
set forth in the Fourth Supplemental Indenture, elect to redeem exactly those
Subordinated Deferrable Notes which correspond to PEPS Units (i) whose holders
have elected to make a Cash Settlement in connection with a Cash Merger Early
Settlement and (ii) in respect of whose settlement obligations there is an Event
of Default under Section 5.5(b) of this Agreement.
29
SECTION 7. RIGHTS AND REMEDIES.
SECTION 7.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT.
(a) In addition to the rights and remedies specified in Section 5.7
hereof or otherwise available at law or in equity, after an event of default (as
specified in Section 7.1(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 Subordinated Deferrable Notes, Pledged Treasury
Securities or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) 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 Subordinated Deferrable
Notes, Pledged Treasury Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) in one or
more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, or on account of principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof, in satisfaction of the
Obligations of the Holder of the PEPS Units (if a Tax Event Redemption has
occurred) of which such appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio or the
Holder of the Treasury PEPS Units 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 Interest (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
30
authorized to receive and collect all payments of (i) the liquidation or
redemption amount of the Pledged Preferred Securities, (ii) the principal amount
or redemption amount of the Pledged Subordinated Deferrable Notes, (iii) the
principal amount of the Pledged Treasury Securities and (iv) the principal
amount of the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, subject, in each case, to
the provisions of Section 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 7.2 SUBSTITUTION OF SUBORDINATED DEFERRABLE NOTES.
If the Trust shall have been dissolved and liquidated prior to the
Purchase Contract Settlement Date, the Securities Intermediary shall transfer to
the Collateral Agent Subordinated Deferrable 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 Subordinated
Deferrable Notes, the Collateral Agent shall release the Pledged Preferred
Securities from the Collateral Account and shall promptly transfer the same to
the Trust.
SECTION 7.3 TAX EVENT REDEMPTION.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price 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 Subordinated
Deferrable 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
Subordinated Deferrable Notes for payment as may be required by their respective
terms. Upon receipt of such funds, the Pledged Preferred Securities or Pledged
Subordinated Deferrable Notes, as the case
31
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 Redemption Price to
purchase the Treasury Portfolio from the Quotation Agent for credit to the
Collateral Account and (b) promptly remit the remaining portion of such
Redemption Price, if any, to the Purchase Contract Agent for payment to the
Holders of PEPS Units.
SECTION 7.4 SUBSTITUTIONS.
Whenever a Holder has the right to substitute Treasury Securities,
Trust Preferred Securities, Subordinated Deferrable Notes or security
entitlements for any of them or the appropriate Applicable Ownership Interest 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.
SECTION 8. REPRESENTATIONS AND WARRANTIES; COVENANTS.
SECTION 8.1 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:
(1) such Holder has the power to grant a security interest in
and lien on the Collateral;
(2) 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 Securities
Intermediary 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 Section 2 hereof;
(3) upon the Transfer of the Collateral to the Securities
Intermediary for credit to the Collateral Account, the Collateral
Agent, for the benefit of the Company, will have a valid and perfected
first priority security
32
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 Section 4 hereof); and
(4) 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 Section 2 hereof or
violate any provision of any existing law or regulation applicable to
it or of any mortgage, charge, pledge, indenture, contract or
undertaking to which it is a party or which is binding on it or any of
its assets.
SECTION 8.2 COVENANTS.
The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any covenant made by or on behalf of a Holder),
hereby covenant to the Collateral Agent that for so long as the Collateral
remains subject to the Pledge:
(1) 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
(2) neither the Purchase Contract Agent nor such Holders will
sell or otherwise dispose (or attempt to dispose) of the Collateral or
any part of it except for the beneficial interest therein, subject to
the Pledge hereunder, transferred in connection with the Transfer of
the Securities.
SECTION 9. THE COLLATERAL AGENT AND THE SECURITIES INTERMEDIARY.
It is hereby agreed as follows:
SECTION 9.1 APPOINTMENT, POWERS AND IMMUNITIES.
The Collateral Agent shall act as agent for the Company hereunder with
such powers as are specifically vested in the Collateral Agent by the terms of
this
33
Agreement, together with such other powers as are reasonably incidental thereto.
The Collateral Agent shall:
(1) have no duties or responsibilities except those expressly
set forth in this Agreement and no implied covenants or obligations
shall be inferred from this Agreement against the Collateral Agent, nor
shall the Collateral Agent be bound by the provisions of any agreement
by any party hereto beyond the specific terms hereof;
(2) not be responsible for any recitals contained in this
Agreement, or in any certificate or other document referred to or
provided for in, or received by it under, this Agreement, the
Securities or the Purchase Contract Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement (other than as against the Collateral Agent), the
Securities or the Purchase Contract Agreement or any other document
referred to or provided for herein or therein or for any failure by the
Company or any other Person (except the Collateral Agent) 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;
(3) not be required to initiate or conduct any litigation or
collection proceedings hereunder (except pursuant to directions
furnished under Section 9.2 hereof, subject to Section 9.6 hereof);
(4) 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
(5) not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with respect
to, any securities or other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. In no event shall the Collateral
Agent be liable for any
34
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 9.2 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 9.2 shall impair the right of the Collateral Agent in
its discretion to take any action or omit to take any action which it deems
proper and which is not inconsistent with such direction.
SECTION 9.3 RELIANCE BY COLLATERAL AGENT AND SECURITIES
INTERMEDIARY.
Each of the Securities Intermediary 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
and the Securities Intermediary. As to any matters not expressly provided for by
this Agreement, the Collateral Agent and the Securities Intermediary shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
in accordance with instructions given by the Company in accordance with this
Agreement.
SECTION 9.4 RIGHTS IN OTHER CAPACITIES.
The Collateral Agent and the Securities Intermediary and their
affiliates may (without having to account therefor to the Company) accept
deposits from, lend money to, make their investments in and generally engage in
any kind of banking, trust or other business with the Purchase Contract Agent,
any other Person interested herein and any Holder of Securities (and any of
their respective subsidiaries or
35
affiliates) as if it were not acting as the Collateral Agent or the Securities
Intermediary, as the case may be, and the Collateral 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 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 9.5 NON-RELIANCE ON COLLATERAL AGENT AND SECURITIES
INTERMEDIARY.
Neither the Securities Intermediary nor the Collateral Agent shall be
required to keep itself informed as to the performance or observance by the
Purchase Contract Agent or any Holder of Securities of this Agreement, the
Purchase Contract Agreement, the Securities or any other document referred to or
provided for herein or therein or to inspect the properties or books of the
Purchase Contract Agent or any Holder of Securities. Neither the Collateral
Agent nor 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 or the Securities Intermediary or any of
their respective affiliates.
SECTION 9.6 COMPENSATION AND INDEMNITY.
The Company agrees to:
(1) pay the Collateral Agent and the Securities Intermediary
from time to time such compensation as shall be agreed in writing
between the Company and the Collateral Agent or the Securities
Intermediary, as the case may be, for all services rendered by them
hereunder;
(2) indemnify and hold harmless the Collateral Agent, the
Securities Intermediary and each of their respective directors,
officers, agents and employees (collectively, the "Indemnitees"),
harmless from and against any and all claims, liabilities, losses,
damages, fines, penalties and expenses (including reasonable fees and
expenses of counsel) (collectively, "Losses" and individually, a
"Loss") that may be imposed on, incurred by, or asserted
36
against, the Indemnitees or any of them for following any instructions
or other directions upon which either the Collateral Agent or the
Securities Intermediary is entitled to rely pursuant to the terms of
this Agreement; and
(3) in addition to and not in limitation of paragraph (2)
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 or the
Securities Intermediary's acceptance or performance of its powers and
duties under this Agreement, provided the Collateral 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 9.7 FAILURE TO ACT.
In the event of any ambiguity in the provisions of this Agreement or
any dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, then at
its sole option, each of the Collateral 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 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 and the Securities Intermediary shall be entitled to refuse to
act until either:
(1) such conflicting or adverse claims or demands shall have
been finally determined by a court of competent jurisdiction or settled
by agreement between the conflicting parties as evidenced in a writing
satisfactory to the Collateral Agent or the Securities Intermediary; or
(2) the Collateral 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 and the Securities Intermediary may in addition elect to
commence an interpleaderaction or seek other judicial relief or orders as the
37
Collateral Agent or the Securities Intermediary may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor 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 9.8 RESIGNATION OF COLLATERAL AGENT AND SECURITIES
INTERMEDIARY.
(a) Subject to the appointment and acceptance of a successor
Collateral Agent as provided below:
(1) the Collateral Agent may resign at any time by giving
notice thereof to the Company and the Purchase Contract Agent as
attorney-in-fact for the Holders of Securities;
(2) the Collateral Agent may be removed at any time by the
Company; and
(3) if the Collateral Agent fails to perform any of its
material obligations hereunder in any material respect for a period of
not less than 20 days after receiving written notice of such failure by
the Purchase Contract Agent and such failure shall be continuing, the
Collateral Agent may be removed by the Purchase Contract Agent.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Collateral Agent pursuant to clause (3) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall have the right
to appoint a successor Collateral Agent. If no successor Collateral Agent shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's giving of notice of resignation or the
Company or the Purchase Contract Agent giving notice of such removal, then the
retiring Collateral Agent may petition any court of competent jurisdiction for
the appointment of a successor Collateral Agent. The Collateral Agent shall be a
bank 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 hereunder by a successor
Collateral Agent, such successor Collateral Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall take all appropriate
action to transfer any money and property held by it
38
hereunder (including the Collateral) to such successor Collateral Agent. The
retiring Collateral Agent shall, upon such succession, be discharged from its
duties and obligations as Collateral Agent hereunder. After any retiring
Collateral Agent's resignation hereunder as Collateral Agent, the provisions of
this Section 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.
(b) Subject to the appointment and acceptance of a successor
Securities Intermediary as provided below:
(1) 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;
(2) the Securities Intermediary may be removed at any time by
the Company; and
(3) if 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
Securities Intermediary may be removed by the Purchase Contract Agent.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Securities Intermediary pursuant to clause (3) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall have the right
to appoint a successor Securities Intermediary. If no successor Securities
Intermediary shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Securities Intermediary's giving
of notice of resignation or the Company or the Purchase Contract Agent giving
notice of such removal, then the retiring Securities Intermediary may petition
any court of competent jurisdiction for the appointment of a successor
Securities Intermediary. 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 Securities Intermediary hereunder by a successor
Securities Intermediary, such successor Securities Intermediary shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Securities Intermediary, and the retiring Securities
Intermediary shall take all appropriate action to transfer any money and
property held by it hereunder (including the Collateral) to such successor
Securities Intermediary. The retiring Securities
39
Intermediary shall, upon such succession, be discharged from its duties and
obligations as Securities Intermediary hereunder. After any retiring Securities
Intermediary's resignation hereunder as Securities Intermediary, the provisions
of this Section 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 Securities
Intermediary.
SECTION 9.9 RIGHT TO APPOINT AGENT OR ADVISOR.
The Collateral Agent shall have the right to appoint agents or advisors
in connection with any of its duties hereunder, and the Collateral Agent shall
not be liable for any action taken or omitted by, or in reliance upon the advice
of, such agents or advisors selected in good faith. The appointment of agents
pursuant to this Section 9.9 shall be subject to prior consent of the Company,
which consent shall not be unreasonably withheld.
SECTION 9.10 SURVIVAL.
The provisions of this Section 9 shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent or the
Securities Intermediary.
SECTION 9.11 EXCULPATION.
Anything contained in this Agreement to the contrary notwithstanding,
in no event shall the Collateral Agent 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 or the
Securities Intermediary, or any of them.
SECTION 10. AMENDMENT.
SECTION 10.1 AMENDMENT WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, the Collateral 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 Securities Intermediary and the Purchase
Contract Agent, to:
(1) evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the
Company;
40
(2) evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or
Purchase Contract Agent;
(3) 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
(4) 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 10.2 AMENDMENT WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of such Holders delivered to
the Company, the Purchase Contract Agent, the Securities Intermediary or the
Collateral Agent, as the case may be, the Company, when duly authorized, the
Purchase Contract Agent, the Securities Intermediary and the Collateral Agent
may amend this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the 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:
(1) Change the amount or type of Collateral underlying a
Security (except for the rights of holders of PEPS Units to substitute
the Treasury Securities for the Pledged Preferred Securities or the
Pledged Subordinated Deferrable Notes, as the case may be, or the
rights of Holders of Treasury PEPS Units to substitute Preferred
Securities or Subordinated Deferrable Notes, 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
(2) otherwise effect any action that would require the consent
of the Holder of each Outstanding Security affected thereby pursuant to
the Purchase Contract Agreement if such action were effected by an
agreement supplemental thereto; or
41
(3) 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 PEPS Units or only the Treasury PEPS Units, 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 (1) through (3) above.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
SECTION 10.3 EXECUTION OF AMENDMENTS.
In executing any amendment permitted by this Section, the Collateral
Agent, the Securities Intermediary and the Purchase Contract Agent shall be
entitled to receive and (subject to Section 7.1 of the Purchase Contract
Agreement with respect to the Purchase Contract Agent) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such amendment have been
satisfied.
SECTION 10.4 EFFECT OF AMENDMENTS.
Upon the execution of any amendment under this Section, this Agreement
shall be modified in accordance therewith, and such amendment shall form a part
of this Agreement for all purposes; and every Holder of Certificates theretofore
or thereafter authenticated, executed on behalf of the Holders and delivered
under the Purchase Contract Agreement shall be bound thereby.
SECTION 10.5 REFERENCE TO 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
42
matter provided for in such amendment. If the Company shall so determine, new
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement in exchange for Outstanding
Security Certificates.
SECTION 11. MISCELLANEOUS.
SECTION 11.1 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 11.2 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
Securities Intermediary, the Purchase Contract Agent and the Holders from time
to time of the Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Company, the Collateral Agent, the Securities Intermediary, the
Purchase Contract Agent and the Holders from time to time of the Securities,
acting through the Purchase Contract Agent as their attorney-in-fact,
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
SECTION 11.3 NOTICES.
All notices, requests, consents and other communications provided for
herein
43
(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 11.4 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
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 11.5 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
SECTION 11.6 SEVERABILITY.
If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
SECTION 11.7 EXPENSES, ETC.
The Company agrees to reimburse the Collateral Agent and the Securities
Intermediary for:
(1) 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
44
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;
(2) 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
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 11.7;
(3) 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;
(4) all fees and expenses of any agent or advisor appointed by
the Collateral Agent and consented to by the Company under Sections 9.3
and 9.9 of this Agreement; and
(5) 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 11.8 SECURITY INTEREST ABSOLUTE.
All rights of the Collateral Agent and security interests hereunder,
and all obligations of the Holders from time to time hereunder, shall be
absolute and unconditional irrespective of:
(1) any lack of validity or enforceability of any provision of
the Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
(2) 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
45
Contract or any other agreement or instrument relating thereto; or
(3) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
xxxxxxx.
SECTION 11.9 NOTICE OF TAX EVENT, TAX EVENT REDEMPTION AND
TERMINATION EVENT.
Upon the occurrence of a Tax Event, a Cash Merger Event, a Tax Event
Redemption, Cash Merger Early Redemptions in connection with a specific Cash
Merger Event 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 Cash Merger Event, a Tax Event
Redemption, a Cash Merger Early Redemption or a Termination Event has occurred.
[SIGNATURES ON THE FOLLOWING PAGE]
46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
------------------------------- --------------------------------
CMS ENERGY CORPORATION 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: Vice President and Chief Title:
Financial Officer
Address for Notices: Address for Notices:
CMS Energy Corporation Xxx Xxxx xx Xxx Xxxx
Xxxxxxxx Xxxxx Xxxxx, Xxxxx 0000 000 Xxxxxxx Xxxxxx
000 Xxxx Xxxxxx Xxxxx 00 Xxxx
Xxxxxxxx, Xxxxxxxx 00000 Xxx Xxxx, XX 00000
Attention: General Counsel Attention: Corporate Trust Trustee
Telecopy: (000) 000-0000 Administration
Telecopy: (000) 000-0000
47
------------------------------- --------------------------------
CHASE MANHATTAN BANK, CHASE MANHATTAN BANK,
as Collateral Agent as Securities Intermediary
By: By:
---------------------------- -----------------------------
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
The Chase Manhattan Bank The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department Attention: Corporate Trust Department
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
48
EXHIBIT A
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Establishment of Treasury PEPS Units)
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Telecopy: (000) 000-0000
Re: PEPS Units of CMS Energy Corporation. (the "COMPANY") and CMS
Energy Trust III
The securities account of The Chase Manhattan Bank, as
Collateral Agent, maintained by the Securities Intermediary
and designated "The Chase Manhattan Bank, as Collateral Agent
of CMS Energy Corporation, 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 August 22, 2000 (the
"PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent and as
Securities Intermediary, and the undersigned, as Purchase Contract Agent and as
attorney-in-fact for the holders of PEPS Units 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 5.2 of the Pledge
Agreement that the holder of securities named below (the "Holder") has elected
to substitute $ Value of Treasury Securities or security entitlements
thereto in exchange for [an equal Value of [Pledged Preferred Securities]
[Pledged Subordinated Deferrable Notes] relating to PEPS Units] 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.
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
49
[Pledged Preferred Securities] [Pledged Subordinated Deferrable Notes]] in
accordance with Section 5.2 of the Pledge Agreement. We also hereby confirm that
no Tax Event Redemption has occurred.
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:
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements thereto for the [Pledged Preferred
Securities] [Pledged Subordinated Deferrable Notes]:
------------------------------
------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
------------------------------
Address
------------------------------
------------------------------
50
EXHIBIT B
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Establishment of Treasury PEPS Units)
The Chase Manhattan Bank, as Securities Intermediary
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Telecopy: (000) 000-0000
Re: PEPS Units of CMS Energy Corporation (the "Company") and CMS
Energy Trust III
The securities account of The Chase Manhattan Bank, as
Collateral Agent, maintained by the Securities Intermediary
and designated "The Chase Manhattan Bank, as Collateral Agent
of CMS Energy Corporation, 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 August 22, 2000 (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 PEPS Units 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 PEPS Units (the "Holder"), you are
hereby instructed to release from the Collateral Account [an equal Value of
[Preferred
51
Securities or security entitlements thereto] [Subordinated Deferrable Notes or
security entitlements thereto]] relating to PEPS Units of the Holder] by
Transfer to the Purchase Contract Agent.
THE CHASE MANHATTAN BANK,
as Collateral Agent
Dated: By:
------------------- -----------------------------
Name:
------------------------
Title:
-----------------------
Please print name and address of Holder:
-------------------------------- --------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
--------------------------------
Address
--------------------------------
--------------------------------
52
EXHIBIT C
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Reestablishment of PEPS Units )
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Telecopy: (000) 000-0000
Re: PEPS Units of CMS Energy Corporation (the "Company")
and CMS Energy Trust III
The securities account of The Chase Manhattan Bank, as
Collateral Agent, maintained by the Securities Intermediary
and designated "The Chase Manhattan Bank, as Collateral Agent
of CMS Energy Corporation, 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 August 22, 2000 (the
"PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent and as
Securities Intermediary, and the undersigned, as Purchase Contract Agent and as
attorney-in-fact for the holders of PEPS Units 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 5.3(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] [Subordinated Deferrable 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 thereto] [Subordinated Deferrable
Notes or security entitlements thereto] to the Securities Intermediary, for
credit to the Collateral Account.
53
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such [Preferred Securities or security entitlements thereto]
[Subordinated Deferrable Notes or security entitlements thereto] have been
credited to the Collateral Account, to release to the undersigned $
Value of Treasury Securities or security entitlements thereto related to
PEPS Units of such Holder in accordance with Section 5.3(a) of the Pledge
Agreement. We also hereby confirm that no Tax Event Redemption has occurred.
THE BANK OF NEW YORK,
as Purchase Contract Agent
Date: By:
--------------------------- ------------------------------
Name:
-----------------------------
Title:
---------------------------
Please print name and address of Holder electing to substitute [Preferred
Securities or security entitlements thereto] [Pledged Subordinated Deferrable
Notes or security entitlements thereto] for Pledged Treasury Securities:
--------------------------------- --------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
---------------------------------
Address
---------------------------------
---------------------------------
54
EXHIBIT D
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Reestablishment of PEPS Units)
The Chase Manhattan Bank, as Securities Intermediary
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Telecopy: (000) 000-0000
Re: PEPS Units of CMS Energy Corporation
(the "COMPANY") and CMS Energy Trust III
The securities account of The Chase Manhattan Bank, as
Collateral Agent, maintained by the Securities Intermediary
and designated "The Chase Manhattan Bank, as Collateral Agent
of CMS Energy Corporation, 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 August 22, 2000 (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 PEPS Units 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 thereto] [Subordinated
Deferrable Notes or security entitlements thereto] has been credited to the
Collateral Account by or for the benefit of , as Holder of PEPS
Units (the "Holder"), you are hereby instructed to release from the Collateral
55
Account $ Value of Treasury Securities or security entitlements
thereto by Transfer to the Purchase Contract Agent.
CHASE MANHATTAN BANK,
as Collateral Agent
Dated: By:
--------------------------- ------------------------------
Name:
----------------------------
Title:
---------------------------
-------------------------------- --------------------------------
Name Social Security or other
Taxpayer Identification Number, if any
--------------------------------
Address
--------------------------------
--------------------------------
56
EXHIBIT E
NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY
TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
The Bank of New York
000 Xxxxxxx Xxxxxx
00 Xxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Trustee Administration
Telecopy: (000) 000-0000
Re: PEPS Units of CMS Energy Corporation
(the "Company") and CMS Energy Trust III
Please refer to the Pledge Agreement dated as of August 22, 2000 (the
"PLEDGE AGREEMENT"), by and among you, the Company, The Chase Manhattan Bank, as
Collateral Agent and the undersigned, as Securities Intermediary. Unless
otherwise defined herein, terms defined in the Pledge Agreement are used herein
as defined therein.
In accordance with Section 5.5(d) of the Pledge Agreement, we hereby
notify you that as of 11:00 a.m. (New York City time) on the fifth Business Day
immediately preceding [applicable Purchase Contract Settlement Date], we have
received (i) $ in immediately available funds paid in an
aggregate amount equal to the Purchase Price to the Company on the Purchase
Contract Settlement Date with respect to PEPS Units and (ii) $
in immediately available funds paid in an aggregate amount equal to
the Purchase Price to the Company on the Purchase Contract Settlement Date with
respect to Treasury PEPS Units.
THE CHASE MANHATTAN BANK,
as Securities Intermediary,
Date: By:
----------------------------- -------------------------------
Name:
Title: