EXHIBIT 4.10
CINERGY CORP.
and
[ ], as Collateral Agent
and
[ ], as Securities Intermediary
and
[ ], as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of _________, 2003
TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS......................................................................2
ARTICLE 2
PLEDGE
SECTION 2.01. PLEDGE...........................................................................6
SECTION 2.02. CONTROL; FINANCING STATEMENT.....................................................6
SECTION 2.03. TERMINATION......................................................................7
ARTICLE 3
DISTRIBUTIONS ON PLEDGED COLLATERAL
SECTION 3.01. INCOME DISTRIBUTIONS.............................................................7
SECTION 3.02. PRINCIPAL PAYMENTS FOLLOWING TERMINATION EVENT...................................7
SECTION 3.03. PRINCIPAL PAYMENTS PRIOR TO OR ON PURCHASE CONTRACT SETTLEMENT DATE..............7
SECTION 3.04. PAYMENTS TO PURCHASE CONTRACT AGENT..............................................8
SECTION 3.05. ASSETS NOT PROPERLY RELEASED.....................................................8
ARTICLE 4
CONTROL
SECTION 4.01. ESTABLISHMENT OF COLLATERAL ACCOUNT..............................................9
SECTION 4.02. TREATMENT AS FINANCIAL ASSETS....................................................9
SECTION 4.03. SOLE CONTROL BY COLLATERAL AGENT.................................................9
SECTION 4.04. SECURITIES INTERMEDIARY'S LOCATION..............................................10
SECTION 4.05. NO OTHER CLAIMS.................................................................10
SECTION 4.06. INVESTMENT AND RELEASE..........................................................10
SECTION 4.07. STATEMENTS AND CONFIRMATIONS....................................................10
SECTION 4.08. TAX ALLOCATIONS.................................................................10
SECTION 4.09. NO OTHER AGREEMENTS.............................................................10
SECTION 4.10. POWERS COUPLED WITH AN INTEREST.................................................11
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ARTICLE 5
INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY STOCK PURCHASE UNITS AND
REESTABLISHMENT OF STOCK PURCHASE UNITS
SECTION 5.01. INITIAL DEPOSIT OF PREFERRED SECURITIES.........................................11
SECTION 5.02. ESTABLISHMENT OF TREASURY STOCK PURCHASE UNITS..................................11
SECTION 5.03. REESTABLISHMENT OF STOCK PURCHASE UNITS.........................................13
SECTION 5.04. TERMINATION EVENT...............................................................15
SECTION 5.05. CASH SETTLEMENT.................................................................16
SECTION 5.06. EARLY SETTLEMENT................................................................18
SECTION 5.07. APPLICATION OF PROCEEDS IN SETTLEMENT OF PURCHASE CONTRACTS.....................19
SECTION 5.08. TAX EVENT REDEMPTION............................................................20
ARTICLE 6
VOTING RIGHTS - PLEDGED PREFERRED SECURITIES AND PLEDGED
[SUBORDINATED] NOTES
SECTION 6.01. VOTING RIGHTS...................................................................21
ARTICLE 7
RIGHTS AND REMEDIES
SECTION 7.01. RIGHTS AND REMEDIES OF THE COLLATERAL AGENT.....................................22
SECTION 7.02. SUBSTITUTION OF [SUBORDINATED] NOTES OR TREASURY PORTFOLIO......................23
SECTION 7.03. TAX EVENT REDEMPTION............................................................24
SECTION 7.04. SUBSTITUTIONS...................................................................24
ARTICLE 8
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 8.01. REPRESENTATIONS AND WARRANTIES..................................................24
SECTION 8.02. COVENANTS.......................................................................25
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ARTICLE 9
THE COLLATERAL AGENT AND THE SECURITIES INTERMEDIARY
SECTION 9.01. APPOINTMENT, POWERS AND IMMUNITIES..............................................26
SECTION 9.02. INSTRUCTIONS OF THE COMPANY.....................................................27
SECTION 9.03. RELIANCE BY COLLATERAL AGENT AND SECURITIES INTERMEDIARY........................27
SECTION 9.04. RIGHTS IN OTHER CAPACITIES......................................................27
SECTION 9.05. NON-RELIANCE ON COLLATERAL AGENT AND SECURITIES INTERMEDIARY....................28
SECTION 9.06. COMPENSATION AND INDEMNITY......................................................28
SECTION 9.07. FAILURE TO ACT..................................................................29
SECTION 9.08. RESIGNATION OF COLLATERAL AGENT AND SECURITIES INTERMEDIARY.....................29
SECTION 9.09. RIGHT TO APPOINT AGENT OR ADVISOR...............................................31
SECTION 9.10. SURVIVAL........................................................................31
SECTION 9.11. EXCULPATION.....................................................................32
ARTICLE 10
AMENDMENT
SECTION 10.01. AMENDMENT WITHOUT CONSENT OF HOLDERS............................................32
SECTION 10.02. AMENDMENT WITH CONSENT OF HOLDERS...............................................32
SECTION 10.03. EXECUTION OF AMENDMENTS.........................................................33
SECTION 10.04. EFFECT OF AMENDMENTS............................................................33
SECTION 10.05. REFERENCE OF AMENDMENTS.........................................................34
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. NO WAIVER.......................................................................34
SECTION 11.02. GOVERNING LAW...................................................................34
SECTION 11.03. NOTICES.........................................................................35
SECTION 11.04. SUCCESSORS AND ASSIGNS..........................................................35
SECTION 11.05. COUNTERPARTS....................................................................35
SECTION 11.06. SEVERABILITY....................................................................35
SECTION 11.07. EXPENSES, ETC...................................................................35
SECTION 11.08. SECURITY INTEREST ABSOLUTE......................................................36
SECTION 11.09. NOTICE OF TAX EVENT, TAX EVENT REDEMPTION AND TERMINATION EVENT.................36
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Exhibit A - Instruction from Purchase Contract Agent to Collateral Agent
(Establishment of Treasury Stock Purchase Units)
Exhibit B - Instruction from Collateral Agent to Securities Intermediary
(Establishment of Treasury Stock Purchase Units)
Exhibit C - Instruction from Purchase Contract Agent to Collateral Agent
(Reestablishment of Stock Purchase Units)
Exhibit D - Instruction from Collateral Agent to Securities Intermediary
(Reestablishment of Stock Purchase Units)
Exhibit E - Notice of Cash Settlement from Securities Intermediary to
Purchase Contract Agent (Cash Settlement Amounts)
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of _____________, 2003, among CINERGY
CORP., a Delaware corporation (the "COMPANY"), [ ], a _________
banking association, as collateral agent (in such capacity, together with its
successors in such capacity, the "COLLATERAL AGENT"), [ ],
a ___________ banking association, as securities intermediary with respect to
the Collateral Account (in such capacity, together with its successors in such
capacity, the "SECURITIES INTERMEDIARY"), and [ ],
an _________ 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 _______________________
Stock Purchase Units (the "SECURITIES").
Each Stock Purchase 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 $[ ] (the "STATED AMOUNT"), a number of shares of Cinergy Corp.
common stock, without par value ("COMMON STOCK"), equal to the Settlement Rate,
and (b) beneficial ownership of a Preferred Security (a "PREFERRED SECURITY")
issued by
CC Funding Trust II (the "TRUST"), having a liquidation amount equal
to the Stated Amount and maturing on __________, 20__.
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:
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision;
(c) the following terms which are defined in the UCC shall have the
meanings set forth therein: "CERTIFICATED SECURITY," "CONTROL," "FINANCIAL
ASSET," "ENTITLEMENT ORDER," "SECURITIES ACCOUNT" and "SECURITY ENTITLEMENT";
(d) the following terms have the meanings assigned to them in the
Purchase Contract Agreement: "ACT," "BANKRUPTCY CODE," "BOARD RESOLUTION,"
"BUSINESS DAY," "CASH SETTLEMENT," "CERTIFICATE," "EARLY SETTLEMENT," "EARLY
SETTLEMENT AMOUNT," "EARLY SETTLEMENT DATE," "HOLDER," "OFFICERS' CERTIFICATE,"
"OPINION OF COUNSEL," "OUTSTANDING SECURITIES," "PURCHASE CONTRACT," "PURCHASE
CONTRACT SETTLEMENT DATE," "PURCHASE PRICE," "REMARKETING AGENT," "REMARKETING
AGREEMENT," "SETTLEMENT RATE," "STOCK PURCHASE UNIT," "[SUBORDINATED] NOTES,"
"TERMINATION EVENT," "TREASURY STOCK PURCHASE UNIT," and "UNDERWRITING
AGREEMENT";
(e) the following terms have the meanings assigned to them in the
Amended and Restated Declaration of Trust of
CC Funding Trust II, of even date
herewith (the "DECLARATION"): "APPLICABLE OWNERSHIP INTEREST," "APPLICABLE
PRINCIPAL AMOUNT," "FAILED REMARKETING," "INDENTURE," "INDENTURE TRUSTEE,"
"LIQUIDATION DISTRIBUTION," "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 1.01(f):
"AGREEMENT" means this
Pledge Agreement, as the same may be amended,
modified or supplemented from time to time.
"CASH" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
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"COLLATERAL ACCOUNT" means the collective reference to:
(i) the securities account of [ ], as
Collateral Agent, maintained by the Securities Intermediary and
designated "[ ], as Collateral Agent of Cinergy Corp.,
as pledgee of [ ], as the Purchase Contract Agent on
behalf of and as attorney-in-fact for the Holders";
(ii) 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 Stock Purchase 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
Stock Purchase Units from time to time; (C) the [Subordinated] Notes
and security entitlements relating thereto which are a component of
the Stock Purchase Units from time to time, (D) any Treasury
Securities and security entitlements relating thereto delivered from
time to time upon establishment of Treasury Stock Purchase Units in
accordance with Section 5.02 hereof and (E) payments made by Holders
pursuant to Section 5.05 hereof;
(iii) 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
(iv) all powers and rights now owned or hereafter acquired
under or with respect to the Collateral Account
((ii), (iii) and (iv), 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, 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
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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.
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"PERSON" means any legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PLEDGE" means the lien and security interest created by this
Agreement.
"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] NOTES" means [Subordinated] 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 Section8-102(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.
5
"TRANSFER" means in the case of certificated securities in registered
form, delivery as provided in Section8-301(a) of the UCC, indorsed to the
transferee or in blank by an effective endorsement; in the case of Treasury
Securities, registration of the transferee as the owner of such Treasury
Securities on TRADES; and in the case of security entitlements, including,
without limitation, security entitlements with respect to Treasury Securities, a
securities intermediary indicating by book entry that such security entitlement
has been credited to the transferee's securities account.
"TREASURY SECURITIES" means zero-coupon U.S. treasury securities
(CUSIP No. ___________) which mature on __________.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York from time to time.
"VALUE" means, with respect to any item of Collateral on any date, as
to (1) Cash, the face amount thereof and (2) Treasury Securities or
[Subordinated] Notes, the aggregate principal amount thereof at maturity and (3)
the Preferred Securities, the liquidation amount thereof.
ARTICLE 2
PLEDGE
SECTION 2.01. PLEDGE. Each Holder, acting through the Purchase
Contract Agent as such Holder's attorney-in-fact, hereby pledges and grants to
the Collateral Agent, as agent of and for the benefit of the Company, a
continuing first priority security interest in and to, and a lien upon and right
of set-off against, all of such Holder's right, title and interest in and to the
Collateral Account to secure the prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the
Obligations. The Collateral Agent shall have all of the rights, remedies and
recourses with respect to the Collateral afforded a secured party by the UCC, in
addition to, and not in limitation of, the other rights, remedies and recourses
afforded to the Collateral Agent by this Agreement.
SECTION 2.02. CONTROL; FINANCING STATEMENT.
(a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of Article 4 of this Agreement.
(b) Subsequent to the date of initial issuance of the Securities, the
Purchase Contract Agent shall deliver to the Collateral Agent a financing
statement prepared by the Company for filing in the Office of the Secretary of
State of the State of
New York and any other jurisdictions which the Company
6
deems necessary, signed by the Purchase Contract Agent, as attorney-in-fact for
the Holders, as Debtors, and describing the Collateral.
SECTION 2.03. TERMINATION. As to each Holder, this Agreement and the
Pledge created hereby shall terminate upon the satisfaction of such Holder's
Obligations. Upon such termination, the 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.
ARTICLE 3
DISTRIBUTIONS ON PLEDGED COLLATERAL
SECTION 3.01. 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] Notes or Permitted
Investments from time to time held in the Collateral Account shall be
distributed to the Purchase Contract Agent (ABA No. [ ], GLA No. [ ],
A/C No. [ ], Re: Cinergy Corp.) for the benefit of the applicable Holders as
provided in the Purchase Contracts or Purchase Contract Agreement.
SECTION 3.02. PRINCIPAL PAYMENTS FOLLOWING TERMINATION EVENT. All
payments received by the Securities Intermediary following a Termination Event
of (1) the liquidation 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 of the Pledged [Subordinated] Notes or securities
entitlements thereto, or (4) the principal amount of the Pledged Treasury
Securities, shall be distributed to the Purchase Contract Agent for the benefit
of the applicable Holders for distribution to such Holders in accordance with
their respective interests.
SECTION 3.03. PRINCIPAL PAYMENTS PRIOR TO OR ON PURCHASE CONTRACT
SETTLEMENT DATE.
(a) Subject to the provisions of Section 5.08 and Section 7.02, and
except as provided in clause 3.03(b) below, if no Termination Event shall have
occurred, all payments received by the Securities Intermediary of (1) the
liquidation amount with respect to the Pledged Preferred Securities or security
entitlements with respect thereto, (2) the principal amount of Applicable
Ownership Interests (as specified in Clause (A) of the definition thereof) of
the Treasury Portfolio, (3) the aggregate principal amount with respect to the
Pledged [Subordinated] Notes or security entitlements with respect thereto or
(4) the
7
principal amount of Pledged Treasury Securities, shall be held and invested in
Permitted Investments until the Purchase Contract Settlement Date and on the
Purchase Contract Settlement Date distributed to the Company as provided in
Section 5.07 hereof. Any balance remaining in the Collateral Account shall be
distributed to the Purchase Contract Agent for the benefit of the applicable
Holders for distribution to such Holders in accordance with their respective
interests. 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 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 with respect to the [Subordinated] Notes or security entitlements with
respect thereto or (4) the principal amount of Treasury Securities or security
entitlements with respect thereto, that, in each case, have been released from
the Pledge shall be distributed to the Purchase Contract Agent for the benefit
of the applicable Holders for distribution to such Holders in accordance with
their respective interests.
SECTION 3.04. PAYMENTS TO PURCHASE CONTRACT AGENT. The 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 3.05. ASSETS NOT PROPERLY RELEASED. If the Purchase Contract
Agent or any Holder shall receive any principal payments on account of financial
assets credited to the Collateral Account and not released therefrom in
accordance with this Agreement, the Purchase Contract Agent or such Holder shall
hold the same as trustee of an express trust for the benefit of the Company and,
upon receipt of an Officers' Certificate of the Company so directing, promptly
deliver the same to the Securities Intermediary for credit to the Collateral
Account or to the Company for application to the Obligations of the Holders, and
the Purchase
8
Contract Agent and Holders shall acquire no right, title or interest in any such
payments of principal amounts so received.
ARTICLE 4
CONTROL
SECTION 4.01. ESTABLISHMENT OF COLLATERAL ACCOUNT. The Securities
Intermediary hereby confirms that:
(a) the Securities Intermediary has established the Collateral
Account;
(b) the Collateral Account is a securities account;
(c) subject to the terms of this Agreement, the Securities
Intermediary shall identify in its records the Purchase Contract Agent as the
entitlement holder entitled to exercise the rights that comprise any financial
asset credited to the Collateral Account;
(d) all property delivered to the Securities Intermediary pursuant to
this Agreement or the Purchase Contract Agreement will be credited promptly to
the Collateral Account;
(e) all securities or other property underlying any financial assets
credited to the Collateral Account shall be registered in the name of the
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 4.02. TREATMENT AS FINANCIAL ASSETS. Each item of property
(whether investment property, financial asset, security, instrument or cash)
credited to the Collateral Account shall be treated as a financial asset.
SECTION 4.03. SOLE CONTROL BY COLLATERAL AGENT. Except as provided in
Section 6.01, at all times prior to the termination of the Pledge, the
Collateral Agent shall have sole control of the Collateral Account, and the
Securities Intermediary shall take instructions and directions with respect to
the Collateral Account solely from the Collateral Agent. If at any time the
Securities Intermediary shall receive an entitlement order issued by the
Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Purchase Contract Agent or any Holder or any other Person. Until termination
of the Pledge, the Securities
9
Intermediary will not comply with any entitlement orders issued by the Purchase
Contract Agent or any Holder.
SECTION 4.04. SECURITIES INTERMEDIARY'S LOCATION. The Collateral
Account, and the rights and obligations of the Securities Intermediary, the
Collateral Agent, the Purchase Contract Agent and the Holders with respect
thereto, shall be governed by the laws of the State of
New York. Regardless of
any provision in any other agreement, for purposes of the UCC,
New York shall be
deemed to be the Securities Intermediary's location.
SECTION 4.05. NO OTHER CLAIMS. Except for the claims and interest of
the Collateral Agent and of the Purchase Contract Agent and the Holders in the
Collateral Account, the Securities Intermediary (without making any
investigation) does not know of any claim to, or interest in, the Collateral
Account or in any financial asset credited thereto. If any Person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against the Collateral
Account or in any financial asset carried therein, the Securities Intermediary
will promptly notify the Collateral Agent and the Purchase Contract Agent.
SECTION 4.06. INVESTMENT AND RELEASE. All proceeds of financial assets
from time to time deposited in the Collateral Account shall be invested and
reinvested as provided in this Agreement. At all times prior to termination of
the Pledge, no property shall be released from the Collateral Account except in
accordance with this Agreement or upon written instructions of the Collateral
Agent.
SECTION 4.07. STATEMENTS AND CONFIRMATIONS. The Securities
Intermediary will promptly send copies of all statements, confirmations and
other correspondence concerning the Collateral Account and any financial assets
credited thereto simultaneously to each of the Purchase Contract Agent and the
Collateral Agent at their addresses for notices under this Agreement.
SECTION 4.08. TAX ALLOCATIONS. The Purchase Contract Agent shall
report all items of income, gain, expense and loss recognized in the Collateral
Account, to the extent such reporting is required by law, to the Internal
Revenue Service and all state and local taxing 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 4.09. NO OTHER AGREEMENTS. The Securities Intermediary has not
entered into, and prior to the termination of the Pledge will not enter into,
any agreement with any other Person relating to the Collateral Account or any
10
financial assets credited thereto, including, without limitation, any agreement
to comply with entitlement orders of any Person other than the Collateral Agent.
SECTION 4.10. POWERS COUPLED WITH AN INTEREST. The rights and powers
granted in this Article 4 to the Collateral Agent have been granted in order to
perfect its security interests in the Collateral Account, are powers coupled
with an interest and will be affected neither by the bankruptcy of the Purchase
Contract Agent or any Holder nor by the lapse of time. The obligations of the
Securities Intermediary under this Article 4 shall continue in effect until the
termination of the Pledge.
ARTICLE 5
INITIAL DEPOSIT, ESTABLISHMENT OF TREASURY STOCK PURCHASE UNITS
AND REESTABLISHMENT OF STOCK PURCHASE UNITS
SECTION 5.01. INITIAL DEPOSIT OF PREFERRED SECURITIES. Prior to or
concurrently with the execution and delivery of this Agreement, the Purchase
Contract Agent, on behalf of the initial Holders of the Stock Purchase 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 5.02. ESTABLISHMENT OF TREASURY STOCK PURCHASE 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 the Purchase Contract Settlement
Date, a Holder of Stock Purchase Units shall have the right to establish or
reestablish Treasury Stock Purchase Units by substitution of Treasury Securities
or security entitlements with respect thereto for the Pledged Preferred
Securities comprising a part of such Holder's Stock Purchase Units in integral
multiples of 40 Stock Purchase Units by:
(i) Transferring to the Securities Intermediary for credit to
the Collateral Account Treasury Securities or security entitlements
with respect thereto having a Value equal to the aggregate 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
11
Securities or security entitlements with respect thereto Transferred
by such Holder and (C) requesting that the Collateral Agent release
from the Pledge the Pledged Preferred Securities that are a component
of such Stock Purchase Units; and
(ii) delivering the related Stock Purchase 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 Stock Purchase Units, a Holder of Stock Purchase
Units shall not have the right to establish or reestablish Treasury Stock
Purchase Units.
(c) If no Tax Event Redemption shall have occurred, but the Trust
shall have been dissolved and liquidated, and the [Subordinated] Notes have
become a component of the Stock Purchase Units, at any time on or prior to the
seventh Business Day immediately preceding the Purchase Contract Settlement
Date, a Holder of Stock Purchase Units shall have the right to substitute
Treasury Securities or security entitlements with respect thereto for the
Pledged [Subordinated] Notes comprising a part of such Holder's Stock Purchase
Units in integral multiples of 40 Stock Purchase Units by:
(i) Transferring to the Securities Intermediary for credit to
the Collateral Account Treasury Securities or security entitlements
with respect thereto having a Value equal to the aggregate principal
amount at maturity of Pledged [Subordinated] 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] Notes that are a component of such Stock
Purchase Units; and
12
(ii) delivering the related Stock Purchase 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 [Subordinated] 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 Stock
Purchase Units and receipt of the related instruction from the Collateral Agent,
the Securities Intermediary shall release the Pledged Preferred Securities or
the Pledged [Subordinated] 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 5.03. REESTABLISHMENT OF STOCK PURCHASE 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 the Purchase Contract Settlement
Date, a Holder of Treasury Stock Purchase Units shall have the right to
reestablish Stock Purchase Units by substitution of Preferred Securities or
security entitlements with respect thereto for Pledged Treasury Securities in
integral multiples of 40 Treasury Stock Purchase Units by:
(i) 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 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 Stock Purchase
Units; and
(ii) Delivering the related Treasury Stock Purchase Units to
the Purchase Contract Agent.
13
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 Stock Purchase Units, a holder of a Treasury Stock
Purchase Unit shall not have the right to reestablish a Stock Purchase Unit.
(c) If no Tax Event Redemption shall have occurred, but the Trust
shall have been dissolved and liquidated, and the [Subordinated] Notes have
become a component of the Stock Purchase Units, at any time on or prior to the
seventh Business Day immediately preceding the Purchase Contract Settlement
Date, a Holder of Treasury Stock Purchase Units shall have the right to
reestablish Stock Purchase Units by substitution of [Subordinated] Notes or
security entitlements with respect thereto for Pledged Treasury Securities in
integral multiples of 40 Treasury Stock Purchase Units by:
(i) Transferring to the Securities Intermediary for credit to
the Collateral Account [Subordinated] 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] 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 Stock Purchase
Units; and
(ii) delivering the related Treasury Stock Purchase Units to
the Purchase Contract Agent.
Upon receipt of such notice and confirmation that [Subordinated] 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
14
distribution to such Holder, free and clear of any lien, pledge or security
interest created hereby.
(d) Upon credit to the Collateral Account of Preferred Securities or
security entitlements with respect thereto or [Subordinated] Notes or security
entitlements with respect thereto, as the case may be, delivered by a Holder of
Treasury Stock Purchase 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 5.04. TERMINATION EVENT.
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that a Termination Event has occurred,
the Collateral Agent shall release all Collateral from the Pledge and shall
promptly Transfer:
(i) any Pledged Preferred Securities or security entitlements
with respect thereto or the Applicable Ownership 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 Stock Purchase Units)
or the Pledged [Subordinated] Notes (if the Trust has been dissolved
and liquidated, and the [Subordinated] Notes or security entitlements
with respect thereto have become a component of the Stock Purchase
Units);
(ii) any Pledged Treasury Securities, and
(iii) payments by Holders (or the Permitted Investments of such
payments) pursuant to Section 5.05 hereof,
to the Purchase Contract Agent for the benefit of the Holders for distribution
to such Holders in accordance with their respective interests, free and clear of
any lien, pledge or security interest or other interest created hereby;
provided, however, if any Holder shall be entitled to receive less than $1,000
with respect to his interest in the Applicable Ownership 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.
(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
15
Preferred Securities, the Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, the
Pledged [Subordinated] Notes, the Pledged Treasury Securities or payments by
Holders (or the Permitted Investments of such payments) pursuant to Section 5.05
hereof, as the case may be, as provided by this Section 5.04, the Purchase
Contract Agent shall:
(i) use its best efforts to obtain an opinion of a nationally
recognized law firm reasonably acceptable to the Collateral Agent to
the effect that, as a result of the Company's being the debtor in such
a bankruptcy case, the Collateral Agent will not be prohibited from
releasing or Transferring the Collateral as provided in this Section
5.04, and shall deliver such opinion to the Collateral Agent within
ten days after the occurrence of such Termination Event, and if (A)
the Purchase Contract Agent shall be unable to obtain such opinion
within ten days after the occurrence of such Termination Event or (B)
the Collateral Agent shall continue, after delivery of such opinion,
to refuse to effectuate the release and Transfer of all Pledged
Preferred Securities, Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio,
all the Pledged [Subordinated] Notes, the Pledged Treasury Securities,
the payments by Holders or the Permitted Investments of such payments
pursuant to Section 5.05 hereof or the Proceeds of any of the
foregoing, as the case may be, as provided in this Section 5.04, then
the Purchase Contract Agent shall within fifteen days after the
occurrence of such Termination Event commence an action or proceeding
in the court having jurisdiction of the Company's case under the
Bankruptcy Code seeking an order requiring the Collateral Agent to
effectuate the release and transfer of all Pledged Preferred
Securities, Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio, all the
Pledged [Subordinated] Notes, the Pledged Treasury Securities, or the
payments by Holders or the Permitted Investments of such payments
pursuant to Section 5.05 hereof, or as the case may be, as provided by
this Section 5.04; or
(ii) commence an action or proceeding like that described in
clause 5.04(b)(i) hereof within ten days after the occurrence of such
Termination Event.
SECTION 5.05. CASH SETTLEMENT.
(a) Upon receipt by the Collateral Agent of (1) a notice from the
Purchase Contract Agent promptly after the receipt by the Purchase Contract
Agent of a notice from a Holder of Stock Purchase Units that such Holder has
elected, in accordance with the procedures specified in Section 5.02(a)(i) or
(d)(i)
16
of the Purchase Contract Agreement, respectively, to effect a Cash Settlement
and (2) payment by such Holder by deposit in the Collateral Account prior to
11:00 a.m. (
New York City time) on the fifth Business Day immediately preceding
the Purchase Contract Settlement Date, in the case of a Stock Purchase Unit,
unless a Tax Event Redemption has occurred, or on the Business Day prior to the
Purchase Contract Settlement Date in the case of Treasury Stock Purchase or a
Stock Purchase Unit, if a Tax Event Redemption has occurred, of the Purchase
Price in lawful money of the United States by certified or cashier's check or
wire transfer of immediately available funds payable to or upon the order of the
Securities Intermediary, then the Collateral Agent shall:
(i) instruct the Securities Intermediary promptly to invest
any such Cash in Permitted Investments;
(ii) release from the Pledge the Stock Purchase Unit holder's
or the Treasury Stock Purchase 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] Notes or Pledged Treasury Securities, as applicable, as
to which such Holder has elected to effect a Cash Settlement pursuant
to this Section 5.05(a); and
(iii) instruct the Securities Intermediary to Transfer all such
Pledged Preferred Securities, Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, Pledged [Subordinated] 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 in writing as to the type of Permitted
Investments in which any such Cash shall be invested; provided, however, that if
the Company fails to deliver such written instructions by 10:30 a.m. (New York
City time), the Securities Intermediary shall invest such Cash in the Permitted
Investments described in clause (6) of the definition of Permitted Investments.
Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Purchase Contract Settlement Date, the Collateral Agent shall
(A) instruct the Securities Intermediary to pay the portion of such proceeds and
deliver any certified or cashier's checks received, in an aggregate amount equal
to the Purchase Price, to the Company on the Purchase Contract Settlement Date,
and (B) instruct the Securities Intermediary to release any amounts in excess of
17
the Purchase Price earned from such Permitted Investments to the Purchase
Contract Agent for distribution to such Holder.
(b) If a Holder of Stock Purchase 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 Holder shall be
deemed to have consented to the disposition of such Holder's Pledged Preferred
Securities or Pledged [Subordinated] Notes in accordance with paragraph
5.02(a)(iii) of the Purchase Contract Agreement.
(c) If a Holder of a Treasury Stock Purchase Unit or a Holder of
Stock Purchase 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, 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, 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 Stock Purchase
Units and (ii) the amount of cash that it has received with respect to the Cash
Settlement of Treasury Stock Purchase Units.
SECTION 5.06. EARLY SETTLEMENT. Upon receipt by the Collateral Agent
of a notice from the Purchase Contract Agent that a Holder of Securities has
elected to effect Early Settlement of its obligations under the Purchase
Contracts forming a part of such Securities in accordance with the terms of the
Purchase Contracts and Section 5.07 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
18
specified in clause (A) of the definitions at such term) of the Treasury
Portfolio or Pledged [Subordinated] Notes in the case of a Holder of Stock
Purchase Units or (2) Pledged Treasury Securities, in the case of a Holder of
Treasury Stock Purchase 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]
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 Stock
Purchase Unit holder may settle early only in integral multiples of 40 Purchase
Contracts.
SECTION 5.07. APPLICATION OF PROCEEDS IN SETTLEMENT OF PURCHASE
CONTRACTS.
(a) If a Holder of Stock Purchase 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 Holder shall be deemed to have elected to pay for the shares of
Common Stock to be issued under such Purchase Contracts from the Proceeds of the
remarketing of the related Pledged Preferred Securities or Pledged
[Subordinated] Notes. Upon written notice of such event from the Purchase
Contract Agent, the Collateral Agent shall instruct the Securities Intermediary
to Transfer the related Pledged Preferred Securities or Pledged [Subordinated]
Notes to the Remarketing Agent for remarketing. Upon receiving such Pledged
Preferred Securities or Pledged [Subordinated] 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] Notes.
The Remarketing Agent will deposit the Proceeds of such remarketing (less
$[0.0625] 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
19
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] 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 an event of default under
the Purchase Contract Agreement and hereunder, the Collateral Agent, for the
benefit of the Company shall, at the written direction of the Company, use
commercially reasonable efforts to dispose of the Pledged Preferred Securities
or Pledged [Subordinated] Notes in accordance with applicable law and apply the
proceeds from such disposition towards such Holder's obligations to pay the
Purchase Price for the shares of Common Stock.
(b) If a Holder of a Treasury Stock Purchase Unit or a Holder of
Stock Purchase 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 5.02(d)(i) of the Purchase Contract
Agreement, or has given such notice but failed to make such payment in the
manner required by Section 5.02(d)(ii) of the Purchase Contract Agreement, such
Holder shall be deemed to have elected to pay for the shares of Common Stock to
be issued under such Purchase Contracts from the Proceeds of the related Pledged
Treasury Securities or such Applicable Ownership 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 Portfolio, 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 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
20
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 5.08. TAX EVENT REDEMPTION. If the Securities Intermediary
receives written 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
Stock Purchase 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] Notes, the Securities Intermediary shall release the Pledged
Preferred Securities or the Pledged [Subordinated] Notes, as applicable, from
the Collateral Account and shall promptly transfer the Pledged Preferred
Securities to the Trust and the Pledged [Subordinated] Notes to the Company, as
applicable.
ARTICLE 6
VOTING RIGHTS - PLEDGED PREFERRED SECURITIES AND PLEDGED
[SUBORDINATED] NOTES
SECTION 6.01. VOTING RIGHTS. The Purchase Contract Agent may exercise,
or refrain from exercising, any and all voting and other consensual rights
pertaining to the Pledged Preferred Securities or the Pledged [Subordinated]
Notes or any part thereof for any purpose not inconsistent with the terms of
this Agreement and in accordance with the terms of the Purchase Contract
Agreement; provided, that the Purchase Contract Agent shall not exercise or
shall not refrain from exercising such right, as the case may be, if, in the
judgment of the Purchase Contract Agent, such action would impair or otherwise
have a material adverse effect on the value of all or any of the Pledged
Preferred Securities or the Pledged [Subordinated] 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
21
communications in respect of any Pledged Preferred Securities or the Pledged
[Subordinated] Notes, including notice of any meeting at which holders of the
Preferred Securities or the [Subordinated] Notes are entitled to vote or
solicitation of consents, waivers or proxies of holders of the Preferred
Securities or [Subordinated] 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] 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] Notes.
ARTICLE 7
RIGHTS AND REMEDIES
SECTION 7.01. RIGHTS AND REMEDIES OF THE COLLATERAL AGENT.
(a) In addition to the rights and remedies specified in Section 5.07
hereof or otherwise available at law or in equity, after an event of default (as
specified in Section 7.01(b) below) hereunder, the Collateral Agent shall have
all of the rights and remedies with respect to the Collateral of a secured party
under the UCC (whether or not the UCC is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Without limiting the generality of the foregoing, such remedies may
include, to the extent permitted by applicable law, (1) retention of the Pledged
Preferred Securities, Pledged [Subordinated] 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] 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 Article 3 hereof, in satisfaction of the
Obligations of the Holder of the Stock Purchase Units (if a Tax Event Redemption
has occurred) of which such appropriate Applicable Ownership Interest (as
22
specified in clause (A) of the definition of such term) of the Treasury
Portfolio or the Holder of the Treasury Stock Purchase 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
authorized to receive and collect all payments of (i) the liquidation amount of
the Pledged Preferred Securities, (ii) the principal amount of the Pledged
[Subordinated] 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 7.02. SUBSTITUTION OF [SUBORDINATED] NOTES OR TREASURY
PORTFOLIO. 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] 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]
Notes, the Collateral Agent shall release the Pledged Preferred Securities from
the Collateral Account and shall promptly transfer the same to the Trust.
Notwithstanding the foregoing, in the event of a dissolution and
liquidation of the Trust, if a Liquidation Distribution is to be distributed in
lieu of the [Subordinated] Notes as provided for in the Declaration, the
Liquidation
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Distribution shall be credited to the Collateral Account by the Property
Trustee, on or prior to 12:30 p.m., New York City time on the date of
distribution of the Liquidation Distribution, by federal funds check or wire
transfer of immediately available funds. The Collateral Agent is hereby
authorized to present the Pledged Preferred Securities for payment as may be
required by their terms. Upon receipt of such funds, the Pledged Preferred
Securities shall be released from the Collateral Account. In the event such
funds are credited to the Collateral Account, the Collateral Agent, at the
written direction of the Company, shall instruct the Securities Intermediary to
(a) apply an amount equal to the Redemption Amount of such Liquidation
Distribution to purchase the Treasury Portfolio from the Quotation Agent for
credit to the Collateral Account and (b) promptly remit the remaining portion of
such Liquidation Distribution, if any, to the Purchase Contract Agent for
payment to the Holders of Stock Purchase Units.
SECTION 7.03. TAX EVENT REDEMPTION. Upon the occurrence of a Tax Event
Redemption prior to the Purchase Contract Settlement Date, the Redemption
Amount, plus any accumulated and unpaid distributions, or any accrued and unpaid
interest, as the case may be, payable on the Tax Event Redemption Date with
respect to the Applicable Principal Amount shall be credited to the Collateral
Account by the Property Trustee or, in case there has been a dissolution of the
Trust and the distribution of the related [Subordinated] 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] Notes for payment as
may be required by their respective terms. Upon receipt of such funds, the
Pledged Preferred Securities or Pledged [Subordinated] Notes, as the case may
be, shall be released from the Collateral Account. In the event such funds are
credited to the Collateral Account, the Collateral Agent, at the written
direction of the Company, shall instruct the Securities Intermediary to (a)
apply an amount equal to the Redemption Amount of such funds to purchase the
Treasury Portfolio from the Quotation Agent for credit to the Collateral Account
and (b) promptly remit the remaining portion of such funds, if any, to the
Purchase Contract Agent for payment to the Holders of Stock Purchase Units.
SECTION 7.04. SUBSTITUTIONS. Whenever a Holder has the right to
substitute Treasury Securities, Preferred Securities, [Subordinated] 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.
ARTICLE 8
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REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 8.01. REPRESENTATIONS AND WARRANTIES. Each Holder from time to
time, acting through the Purchase Contract Agent as attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represents
and warrants to the Collateral Agent (with respect to such Holder's interest in
the Collateral), which representations and warranties shall be deemed repeated
on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and
lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and,
in the case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the 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 Article 2 hereof;
(c) 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
interest therein (assuming that any central clearing operation or any securities
intermediary or other entity not within the control of the Holder involved in
the Transfer of the Collateral, including the Collateral Agent and the
Securities Intermediary, gives the notices and takes the action required of it
hereunder and under applicable law for perfection of that interest and assuming
the establishment and exercise of control pursuant to Article 4 hereof); and
(d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security interest,
lien or other encumbrance on the Collateral other than the security interest and
lien granted under Article 2 hereof or violate any provision of any existing law
or regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.
SECTION 8.02. COVENANTS. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
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(a) neither the Purchase Contract Agent nor such Holders will create
or purport to create or allow to subsist any mortgage, charge, lien, pledge or
any other security interest whatsoever over the Collateral or any part of it
other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the Pledge hereunder,
transferred in connection with the Transfer of the Securities.
ARTICLE 9
THE COLLATERAL AGENT AND THE SECURITIES INTERMEDIARY
It is hereby agreed as follows:
SECTION 9.01. APPOINTMENT, POWERS AND IMMUNITIES. The Collateral Agent
and Securities Intermediary shall act as agent for the Company hereunder with
such powers as are specifically vested in the Collateral Agent and Securities
Intermediary by the terms of this Agreement, together with such other powers as
are reasonably incidental thereto. The Collateral Agent and Securities
Intermediary shall:
(a) have no duties or responsibilities except those expressly set
forth in this Agreement and no implied covenants or obligations shall be
inferred from this Agreement against the Collateral Agent and Securities
Intermediary, nor shall the Collateral Agent and Securities Intermediary be
bound by the provisions of any agreement by any party hereto beyond the specific
terms hereof;
(b) not be responsible for any recitals contained in this Agreement,
or in any certificate or other document referred to or provided for in, or
received by it under, this Agreement, the Securities or the Purchase Contract
Agreement, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement (other than as against the
Collateral Agent and Securities Intermediary), 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 and Securities Intermediary) to perform any of its obligations
hereunder or thereunder or for the perfection, priority or, except as expressly
required hereby, maintenance of any security interest created hereunder;
(c) not be required to initiate or conduct any litigation or
collection proceedings hereunder (except pursuant to directions furnished under
Section 9.02 hereof, subject to Section 9.06 hereof);
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(d) not be responsible for any action taken or omitted to be taken by
it hereunder or under any other document or instrument referred to or provided
for herein or in connection herewith or therewith, except for its own negligence
or willful misconduct; and
(e) not be required to advise any party as to selling or retaining,
or taking or refraining from taking any action with respect to, any securities
or other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent or
Securities Intermediary to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder. In no
event shall the Collateral Agent or Securities Intermediary be liable for any
amount in excess of the Value of the Collateral. Notwithstanding the foregoing,
each of the Collateral Agent and the Securities Intermediary in its individual
capacity hereby waives any right of setoff, bankers' lien, liens or perfection
rights as securities intermediary or any counterclaim with respect to any of the
Collateral.
SECTION 9.02. INSTRUCTIONS OF THE COMPANY. The Company shall have the
right, by one or more written instruments executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral Agent,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement and (ii) the Collateral
Agent shall be adequately indemnified as provided herein. Nothing contained in
this Section 9.02 shall impair the right of the Collateral Agent in its
discretion to take any action or omit to take any action which it deems proper
and which is not inconsistent with such direction.
SECTION 9.03. RELIANCE BY COLLATERAL AGENT AND SECURITIES
INTERMEDIARY. Each of the Securities Intermediary 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
27
in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.
SECTION 9.04. RIGHTS IN OTHER CAPACITIES. The Collateral Agent and the
Securities Intermediary and their affiliates may (without having to account
therefor to the Company) accept deposits from, lend money to, make their
investments in and generally engage in any kind of banking, trust or other
business with the Purchase Contract Agent, any other Person interested herein
and any Holder of Securities (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent 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 9.05. 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 9.06. COMPENSATION AND INDEMNITY. The Company agrees to:
(a) 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;
(b) 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
against, the Indemnitees or any
28
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
(c) in addition to and not in limitation of paragraph (b) immediately
above, indemnify and hold the Indemnitees and each of them harmless from and
against any and all Losses that may be imposed on, incurred by or asserted
against, the Indemnitees or any of them in connection with or arising out of the
Collateral Agent's 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 9.07. FAILURE TO ACT. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, then at its sole option, each of the Collateral
Agent 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:
(a) such conflicting or adverse claims or demands shall have been
finally determined by a court of competent jurisdiction or settled by agreement
between the conflicting parties as evidenced in a writing satisfactory to the
Collateral Agent or the Securities Intermediary; or
(b) 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 interpleader action or seek other judicial relief or orders as the
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.
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SECTION 9.08. RESIGNATION OF COLLATERAL AGENT AND SECURITIES
INTERMEDIARY.
(a) Subject to the appointment and acceptance of a successor
Collateral Agent as provided below:
(i) 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;
(ii) the Collateral Agent may be removed at any time by the
Company; and
(iii) 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,
acting at the direction of the Holders of Securities.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Collateral Agent pursuant to clause (iii) 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 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 Article 9 shall continue
in effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as the Collateral Agent.
30
(b) Subject to the appointment and acceptance of a successor
Securities Intermediary as provided below:
(i) the Securities Intermediary may resign at any time by
giving notice thereof to the Company and the Purchase Contract Agent
as attorney-in-fact for the Holders of Securities;
(ii) the Securities Intermediary may be removed at any time by
the Company; and
(iii) 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 (iii) 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 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 Article 9 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Securities Intermediary.
SECTION 9.09. RIGHT TO APPOINT AGENT OR ADVISOR. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken
31
or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 9.09
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
SECTION 9.10. SURVIVAL. The provisions of this Article 9 shall
survive termination of this Agreement and the resignation or removal of the
Collateral Agent 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.
ARTICLE 10
AMENDMENT
SECTION 10.01. 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:
(a) evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company;
(b) evidence and provide for the acceptance of appointment hereunder
by a successor Collateral Agent, Securities Intermediary or Purchase Contract
Agent;
(c) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the Company,
provided such covenants or such surrender do not adversely affect the validity,
perfection or priority of the Pledge created hereunder; or
(d) cure any ambiguity (or formal defect), correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, or make any other provisions with respect to such matters or questions
arising under this Agreement, provided such action shall not adversely affect
the interests of the Holders.
32
SECTION 10.02. AMENDMENT WITH CONSENT OF HOLDERS. With the consent of
the Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of such Holders delivered to the Company, the Purchase
Contract Agent, the 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:
(a) Change the amount or type of Collateral underlying a Security
(except for the rights of holders of Stock Purchase Units to substitute the
Treasury Securities for the Pledged Preferred Securities or the Pledged
[Subordinated] Notes, as the case may be, or the rights of Holders of Treasury
Stock Purchase Units to substitute Preferred Securities or [Subordinated] 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
(b) otherwise effect any action that would require the consent of the
Holder of each Outstanding Security affected thereby pursuant to the Purchase
Contract Agreement if such action were effected by an agreement supplemental
thereto; or
(c) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment;
provided that if any amendment or proposal referred to above would adversely
affect only the Stock Purchase Units or only the Treasury Stock Purchase 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 (a) through (c) above.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
SECTION 10.03. EXECUTION OF AMENDMENTS. In executing any amendment
permitted by this Section, the Collateral Agent, the Securities Intermediary and
33
the Purchase Contract Agent shall be entitled to receive and (subject to Section
7.01 of the Purchase Contract Agreement with respect to the Purchase Contract
Agent) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement and that all conditions precedent, if any, to the execution and
delivery of such amendment have been satisfied.
SECTION 10.04. EFFECT OF AMENDMENTS. Upon the execution of any
amendment under this Section, this Agreement shall be modified in accordance
therewith, and such amendment shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered under the
Purchase Contract Agreement shall be bound thereby.
SECTION 10.05. REFERENCE OF AMENDMENTS. Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Section may, and shall if required by the Collateral
Agent or the Purchase Contract Agent, bear a notation in form approved by the
Purchase Contract Agent and the Collateral Agent as to any matter provided for
in such amendment. If the Company shall so determine, new 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.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. NO WAIVER. No failure on the part of the Collateral
Agent, the Securities Intermediary or any of their respective agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Collateral Agent, the Securities
Intermediary or any of their respective agents of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
SECTION 11.02. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Company,
the Collateral Agent, the Securities Intermediary and the Holders from time to
time of the Securities, acting
34
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 and the Holders from time to time
of the Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 11.03. NOTICES. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "ADDRESS FOR NOTICES" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
SECTION 11.04. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Securities Intermediary and the Purchase
Contract Agent, and the Holders from time to time of the Securities, by their
acceptance of the same, shall be deemed to have agreed to be bound by the
provisions hereof and to have ratified the agreements of, and the grant of the
Pledge hereunder by, the Purchase Contract Agent.
SECTION 11.05. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
SECTION 11.06. SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
35
SECTION 11.07. EXPENSES, ETC.. The Company agrees to reimburse the
Collateral Agent and the Securities Intermediary for:
(a) all reasonable costs and expenses of the Collateral Agent and the
Securities Intermediary (including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent and the Securities Intermediary), in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver of
any of the terms of this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent and the
Securities Intermediary (including, without limitation, reasonable fees and
expenses of counsel) in connection with (i) any enforcement or proceedings
resulting or incurred in connection with causing any Holder of Securities to
satisfy its obligations under the Purchase Contracts forming a part of the
Securities and (ii) the enforcement of this Section 11.07;
(c) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any other document referred to herein and all
costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated hereby;
(d) all fees and expenses of any agent or advisor appointed by the
Collateral Agent and consented to by the Company under Sections 9.03 and 9.09 of
this Agreement; and
(e) any other out-of-pocket costs and expenses reasonably incurred by
the Collateral Agent and the Securities Intermediary in connection with the
performance of their duties hereunder.
SECTION 11.08. SECURITY INTEREST ABSOLUTE. All rights of the
Collateral Agent and security interests hereunder, and all obligations of the
Holders from time to time hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the obligations
of Holders of the Securities under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or
36
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a xxxxxxx.
SECTION 11.09. NOTICE OF TAX EVENT, TAX EVENT REDEMPTION AND
TERMINATION EVENT. Upon the occurrence of a Tax Event, a Tax Event Redemption or
a Termination Event, the Company shall deliver written notice to the Collateral
Agent and the Securities Intermediary. Upon the written request of the
Collateral Agent or the Securities Intermediary, the Company shall inform such
party whether or not a Tax Event, a Tax Event Redemption or a Termination Event
has occurred.
[SIGNATURES ON THE FOLLOWING PAGE]
37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
CINERGY CORP. [ ] as
Purchase Contract Agent and
as attorney-in-fact of the
Holders from time to time of
the Securities
By: By:
----------------------------- -----------------------------
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
Cinergy Corp. [ ]
000 Xxxx Xxxxxx Xxxxxx [ ]
Xxxxxxxxxx, XX 00000 [ ]
Attention: Attention:
Telecopy: Telecopy:
With a copy to:
[ ]
[ ]
[ ]
Attention:
Telecopy:
38
[ ] [ ]
as Collateral Agent as Securities Intermediary
By: By:
----------------------------- -----------------------------
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
[ ] [ ]
[ ] [ ]
[ ] [ ]
[ ] [ ]
[ ] [ ]
Attention: Attention:
Telecopy: Telecopy:
39
EXHIBIT A
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Establishment of Treasury Stock Purchase Units)
[ ]
[ ]
[ ]
[ ]
[ ]
Attention:
Telecopy:
Re: Stock Purchase Units of Cinergy Corp.
(the "COMPANY") and
CC Funding Trust II
The securities account of [ ], as
Collateral Agent, maintained by the Securities Intermediary and
designated "[ ], as Collateral Agent of
Cinergy Corp., as pledgee of [ ], 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 __________, 2003
(the "
PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, [
], as Securities Intermediary, and the undersigned, as Purchase
Contract Agent and as attorney-in-fact for the holders of Stock Purchase 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 5.02 of the
Pledge
Agreement that the holder of securities named below (the "HOLDER") has elected
to substitute $__________ Value of Treasury Securities or security entitlements
thereto in exchange for [an equal Value of [Pledged Preferred Securities]
[Pledged [Subordinated] Notes] relating to _________ Stock Purchase 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
A-1
been credited to the Collateral Account, to release to the undersigned [an equal
Value of [Pledged Preferred Securities] [Pledged [Subordinated] Notes]] in
accordance with Section 5.02 of the
Pledge Agreement. We also hereby confirm
that no Tax Event Redemption has occurred.
[ ],
Date: as Purchase Contract Agent and
as attorney-in-fact of the
Holders from time to time of the
Securities
By:
-----------------------------
Name:
Title:
A-2
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements thereto for the [Pledged Preferred
Securities] [Pledged [Subordinated] Notes]:
-------------------------------- --------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
--------------------------------
Address
--------------------------------
--------------------------------
A-3
EXHIBIT B
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Establishment of Treasury Stock Purchase Units)
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
Attention:
Telecopy:
Re: Stock Purchase Units of Cinergy Corp. (the
"COMPANY") and
CC Funding Trust II
The securities account of [ ], as
Collateral Agent, maintained by the Securities Intermediary and
designated "[ ], as Collateral Agent of
Cinergy Corp., as pledgee of [ ], 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 _________________,
2003 (the "PLEDGE AGREEMENT"), among the Company, you, as Securities
Intermediary, [ ], as Purchase Contract Agent and as
attorney-in-fact for the holders of Stock Purchase 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 $__________ Value of Treasury Securities
or security entitlements thereto has been credited to the Collateral Account by
or for the benefit of _________, as Holder of Stock Purchase Units (the
"HOLDER"), you are hereby instructed to release from the Collateral Account [an
equal Value of [Preferred Securities or security entitlements thereto]
[[Subordinated] Notes or
B-1
security entitlements thereto]] relating to _____ Stock Purchase Units of the
Holder] by Transfer to the Purchase Contract Agent.
[ ],
as Collateral Agent
Date:
-----------------
By:
-----------------------------
Name:
Title:
B-2
Please print name and address of Holder:
-------------------------------- --------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
--------------------------------
Address
--------------------------------
--------------------------------
B-3
EXHIBIT C
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Reestablishment of Stock Purchase Units )
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
Attention:
Telecopy:
Re: _______________ Stock Purchase Units of Cinergy Corp. (the
"COMPANY") and
CC Funding Trust II
Please refer to the Pledge Agreement dated as of __________, 2003 (the
"PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, [
], as Securities Intermediary, and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Stock Purchase Units from time
to time. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.03(a) of the Pledge
Agreement that the holder of securities listed below (the "HOLDER") has elected
to substitute [$ Value of [Preferred Securities or security
entitlements thereto] [[Subordinated] 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]
Notes 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 [Preferred Securities or security entitlements thereto]
[[Subordinated] 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 _____ Stock
Purchase Units
C-1
of such Holder in accordance with Section 5.03(a) of the Pledge Agreement. We
also hereby confirm that no Tax Event Redemption has occurred.
[ ],
as Purchase Contract Agent
Date: By:
----------------- -----------------------------
Name:
Title:
C-2
Please print name and address of Holder electing to substitute [Preferred
Securities or security entitlements thereto] [Pledged [Subordinated] Notes or
security entitlements thereto] for Pledged Treasury Securities:
-------------------------------- --------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
--------------------------------
Address
--------------------------------
--------------------------------
C-3
EXHIBIT D
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Reestablishment of Stock Purchase Units)
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
Attention:
Telecopy:
Re: _______________ Stock Purchase Units of Cinergy Corp.
(the "COMPANY") and
CC Funding Trust II
The securities account of [ ], as
Collateral Agent, maintained by the Securities Intermediary
and designated "[ ], as Collateral Agent
of Cinergy Corp., as pledgee of [ ],
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 _________________,
2003 (the "PLEDGE AGREEMENT"), among the Company, you, as Securities
Intermediary, [ ], as Purchase Contract Agent and as
attorney-in-fact for the holders of Stock Purchase 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] Notes or security
entitlements thereto] has been credited to the Collateral Account by or for the
benefit of ________________, as Holder of Stock Purchase Units (the "HOLDER"),
you are hereby instructed to release from the Collateral Account $
D-1
________________ Value of Treasury Securities or security entitlements thereto
by Transfer to the Purchase Contract Agent.
[ ],
as Collateral Agent
Date: By:
----------------- -----------------------------
Name:
Title:
-------------------------------- --------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
--------------------------------
Address
--------------------------------
--------------------------------
D-2
EXHIBIT E
NOTICE OF CASH SETTLEMENT FROM SECURITIES
INTERMEDIARY TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
[ ]
[ ]
[ ]
Attention:
Telecopy:
Re: _______________ Stock Purchase Units of Cinergy Corp.
(the "COMPANY") and
CC Funding Trust II
Please refer to the Pledge Agreement dated as of _______________, 2003
(the "PLEDGE AGREEMENT"), by and among you, the Company, [ ],
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 5.05(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 ___________, 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
________________ Stock Purchase 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
Stock Purchase Units.
[ ],
as Securities Intermediary,
Date: By:
----------------- -----------------------------
Name:
Title:
E-1
