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EXHIBIT 1(a)
SEMCO ENERGY INC.
(A MICHIGAN CORPORATION)
SEMCO CAPITAL TRUST II
(A DELAWARE BUSINESS TRUST)
9,000,000 FELINE PRIDES(sm)
(Stated Amount of $10 per FELINE PRIDES)
each consisting of
a Purchase Contract of SEMCO Energy Inc.
Requiring the Purchase on August 16, 2003 (or Earlier)
of Certain Shares of Common Stock of SEMCO Energy Inc.
and
9 % Trust Preferred Securities
of SEMCO Capital Trust II
UNDERWRITING AGREEMENT
June 12, 2000
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANC OF AMERICA SECURITIES LLC
SALOMON SMITH BARNEY INC.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281-1209
Ladies and Gentlemen:
SEMCO Energy Inc., a Michigan corporation (the "Company") and SEMCO Capital
Trust II (the "Trust" and, together with the Company, the "Offerors"), a
Delaware statutory business trust organized under the Business Trust Act (the
"Delaware Act") of the State of Delaware (Chapter 38, Title 12, of the Delaware
Code, 12 Del. (Sections 3801 et seq.)), confirm their agreement with Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch"), Banc of America Securities LLC and Salomon Smith Barney Inc. as
underwriters (collectively, the "Underwriters", which term shall also include
any underwriter substituted as hereinafter provided in Section 10 hereof), with
respect to the issue and sale by the Offerors and the purchase by the
Underwriters of FELINE PRIDES(sm), each of which will initially consist of a
unit (referred to as Income PRIDES(sm)) with a Stated Amount of $10 comprised of
(a) a stock purchase contract (the "Purchase Contract") under which (i) the
holder will purchase from the Company on August 16, 2003, a number of shares of
common stock, par value $1.00 per share, of the Company (the "Common Stock")
equal to the Settlement Rate as set forth in the Purchase Contract Agreement (as
defined below) and (ii) the Company will pay to the holder contract adjustment
payments, if any, and (b) beneficial ownership of a 9 % Trust Preferred Security
(the "Preferred Security") of the Trust, having a liquidation amount of $10 (the
"Initial Securities"). The Company and the Trust also propose to grant to the
Underwriters an option to purchase up to 1,350,000 additional Income PRIDES (the
"Option Securities" and together with the Initial Securities, the "Securities")
as described in Section 2(b) hereof. In accordance with the terms of the
Purchase Contract Agreement, to be dated as of June 16, 2000, between the
Company and Bank One Trust Company, National Association, as Purchase Contract
Agent (the "Purchase Contract Agent"), the Preferred Securities constituting a
part of the Securities will be pledged by the Purchase Contract Agent, on behalf
of the holders of the Securities, to Bank of New York, as Collateral Agent,
pursuant to the Pledge Agreement, to be dated as of June 16, 2000 (the "Pledge
Agreement"), among the Company, the Purchase Contract Agent and the Collateral
Agent, to secure the holders' obligation to purchase Common Stock under the
Purchase Contracts. The rights and obligations of a holder of Securities in
respect of Preferred Securities, subject to the pledge thereof, and Purchase
Contracts will be evidenced by Security Certificates (the "Security
Certificates") to be issued pursuant to the Purchase Contract Agreement.
The Company will guarantee the Preferred Securities with respect to
distributions and payments upon liquidation, redemption and otherwise (the
"Preferred Securities Guarantee") pursuant to the Preferred Securities Guarantee
Agreement, to be dated as of June 16, 2000 (the "Preferred Securities Guarantee
Agreement"), executed and delivered by the Company and Bank One Trust Company,
National Association, as trustee (the "Guarantee Trustee"), for the benefit for
the holders from time to time of the Preferred Securities, and certain back-up
undertakings of the Company. All, or substantially all, of the proceeds from the
sale of the Preferred Securities will be combined with the entire proceeds from
the sale by the Trust to the Company of its
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(SM) "FELINE PRIDES," "Income PRIDES," and "Growth PRIDES" are service
marks of Merrill Lynch & Co. Inc.
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common securities (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities") that will be guaranteed by the Company with
respect to distributions and payments upon liquidation, redemption or otherwise
(the "Common Securities Guarantee" and, together with the Preferred Securities
Guarantee, the "Guarantees") pursuant to the Common Securities Guarantee
Agreement, to be dated as of June 16, 2000 (the "Common Securities Guarantee
Agreement" and, together with the Preferred Securities Guarantee Agreement, the
"Guarantee Agreements"), executed and delivered by the Company for the benefit
of the holders from time to time of the Common Securities, and certain backup
undertakings of the Company, and will be used by the Trust to purchase the 9%
Senior Deferrable Notes due 2005 (the "Senior Notes") of the Company.
The Preferred Securities and the Common Securities will be issued pursuant
to the amended and restated declaration of trust of the Trust, to be dated as of
Closing Time (as defined below) (the "Declaration"), among the Company, as
sponsor, Sebastian Coppola and Samuel B. Dallas (the "Administrative Trustees"),
Bank One Trust Company, National Association, as property trustee (the "Property
Trustee") and Bank One Delaware, Inc. (the "Delaware Trustee" and, together with
the Property Trustee and the Administrative Trustees, the "Trustees"), and the
holders from time to time of undivided beneficial interests in the assets of the
Trust. The Senior Notes will be issued pursuant to the Indenture, dated as of
October 23, 1998 (the "Base Indenture"), between the Company and Bank One Trust
Company, National Association, as Trustee (the "Debt Trustee"), as supplemented
by the First Supplemental Indenture to be dated as of June 16, 2000 (the Base
Indenture, as supplemented and amended, being referred to as the "Indenture").
Capitalized terms used herein without definition shall be used as defined in the
Prospectus.
Pursuant to a remarketing agreement (the "Remarketing Agreement") to be
dated as of June 16, 2000, among the Company, the Trust, the Purchase Contract
Agent and Merrill Lynch, certain Preferred Securities may be remarketed, subject
to certain terms and conditions.
Prior to the purchase and public offering of the Securities by the several
Underwriters, the Offerors and the Underwriters, shall enter into an agreement
substantially in the form of Exhibit A hereto (the "Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written communication between the Offerors and the Underwriters and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Securities will be governed by this Agreement, as supplemented
by the Pricing Agreement. From and after the date of the execution and delivery
of the Pricing Agreement, this Agreement shall be deemed to incorporate the
Pricing Agreement.
The Company, and the Trust have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-91815) covering the registration of securities of the Company and the Trust,
including the Securities and the Purchase Contracts and
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Preferred Securities included in, and shares of Common Stock underlying, the
Securities, under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus or prospectuses, and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and the Company has filed such pre- and post-effective amendments thereto as may
be required prior to the execution of the Pricing Agreement. Such registration
statement, as so amended, has been declared effective by the Commission and each
of the Declaration, the Indenture and the Preferred Securities Guarantee
Agreement has been duly qualified under the Trust Indenture Act of 1939, as
amended (the "1939 Act"). Such registration statement, as so amended, in the
form in which it became effective, including the exhibits and schedules thereto,
if any, and the information, if any, deemed to be a part thereof pursuant to
Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A Information") is
referred to herein as the "Registration Statement"; and the final prospectus and
the final prospectus supplement relating to the offering of the Securities, in
the form first furnished to the Underwriters by the Offerors for use in
connection with the offering of the Securities, are collectively referred to
herein as the "Prospectus"; provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall be deemed to include all
documents incorporated therein by reference pursuant to the Securities Exchange
Act of 1934, as amended (the "1934 Act"), prior to the time of the execution and
delivery of the Pricing Agreement; provided, further, that if the Offerors file
a registration statement with the Commission pursuant to Section 462(b) of the
1933 Act Regulations (the "Rule 462(b) Registration Statement"), then after such
filing, all references to "Registration Statement" shall be deemed to include
the Rule 462(b) Registration Statement. A "preliminary prospectus" shall be
deemed to refer to any prospectus used before the Registration Statement became
effective and any prospectus that omitted, as applicable, the Rule 430A
Information or other information to be included upon pricing in a form of
prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations and was used after such effectiveness but prior to the execution and
delivery of the applicable Pricing Agreement. For purposes of this Agreement,
all references to the Registration Statement, any preliminary prospectus, the
Prospectus or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include any copy thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
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The Indenture, the First Supplemental Indenture, the Declaration, the
Remarketing Agreement, the Purchase Contract Agreement, the Pledge Agreement,
the Guarantee Agreements, the Senior Notes, the Pricing Agreement and this
Agreement are referred to collectively as the "Operative Agreements."
The Offerors understand that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after the
Pricing Agreement has been executed and delivered.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties. The Offerors represent and warrant to
and agree with each Underwriter as of the date hereof, as of the date of the
Pricing Agreement and as of the Closing Time, and, if applicable, as of each
Date of Delivery (as defined below) (in each case, "Representation Date") as
follows:
(i) Compliance with Registration Requirements. The Company and the
Trust meet the requirements for the use of Form S-3 under the 1933 Act. The
Registration Statement (including any Rule 462(b) Registration Statement) has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement (or such Rule 462(b) Registration
Statement) has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the Company
and the Trust, are contemplated by the Commission, and any request on the part
of the Commission for additional information has been complied with. In
addition, each of the Declaration, the Preferred Securities Guarantee Agreement
and the Indenture has been duly qualified under the 1939 Act.
At the respective times the Registration Statement (including any Rule
462(b) Registration Statement) and any post-effective amendments thereto became
effective and at each Representation Date, the Registration Statement (including
any such Rule 462(b) Registration Statement) and any amendments thereto complied
and will comply in all material respects with the requirements of the 1933 Act,
the 1933 Act Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations") and did not and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. At the date of the Prospectus, at the Closing Time and at each
Date of Delivery, if any, neither the Prospectus nor any amendments or
supplements thereto included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. Notwithstanding the foregoing, the representations and
warranties in this subsection shall not apply to statements in or omissions from
the Registration Statement (or any amendment thereto) or Prospectus (or any
amendment or supplement thereto) made in reliance upon and in conformity with
information furnished to the Offerors in writing by the Underwriters expressly
for use in the Registration Statement (or such amendment thereto) or Prospectus
(or such amendment or supplement thereto).
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Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and each preliminary prospectus
and the Prospectus delivered to the Underwriters for use in connection with the
offering of the Securities will, at the time of such delivery, be identical in
all material respects to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the Prospectus,
when they became effective or at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations or 1934 Act and the
rules and regulations of the Commission thereunder (the "1934 Act Regulations"),
as applicable, and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective, at the time
the Prospectus was issued, at the Closing Time and at each Date of Delivery, if
any, did not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement and the Prospectus are independent public accountants with respect to
the Company and its subsidiaries as required by the 1933 Act and the 1933 Act
Regulations.
(iv) Financial Statements. The financial statements of the Company
included in the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly the financial position of (1) the
Company and its consolidated subsidiaries and (2) ENSTAR Natural Gas Company (a
division of the Company) and Alaska Pipeline Company (a subsidiary of the
Company) (collectively, "ENSTAR") as at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified. Such financial statements
have been prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement and the
Prospectus present fairly in accordance with GAAP the information required to be
stated therein. The pro forma financial statements of the Company and its
consolidated subsidiaries and the related notes thereto incorporated by
reference in the Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
and have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect
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to the transactions and circumstances referred to therein. The selected
financial information and the financial data included in the Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement and the Prospectus subject to year end audit adjustments.
(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Trust or of the Company and its
subsidiaries considered as one enterprise, in each case whether or not arising
in the ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Trust or the Company or any of its
subsidiaries, other than those in the ordinary course of business, which are
material with respect to the Trust or to the Company and its subsidiaries
considered as one enterprise, and (C) except for regular quarterly dividends on
the Common Stock in amounts per share that are consistent with past practice,
there has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Michigan and has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under each of the
Operative Agreements to which it is a party; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant subsidiary" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly organized and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as otherwise
disclosed in the Registration Statement, all of the capital stock of each such
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary. The only subsidiaries of the Company are (A)
the subsidiaries listed on Schedule B hereto and (B) certain other subsidiaries
which, considered in the aggregate as a single subsidiary, do not constitute a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X.
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(viii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under the captions
"Description of Capital Stock", "Selected Financial Information" and
"Capitalization" (except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements or employee benefit plans or the
Company's Direct Stock Purchase and Dividend Reinvestment Plan referred to in
the Prospectus or pursuant to the exercise of stock options outstanding as of
the date of the Prospectus or issued pursuant to existing employee benefit plans
in the ordinary course of business consistent with prior practice.) The shares
of issued and outstanding capital stock have been duly authorized and validly
issued and are fully paid and non-assessable; none of the outstanding shares of
capital stock was issued in violation of the preemptive or other similar rights
of any securityholder of the Company.
(ix) Good Standing of the Trust. The Trust has been duly created and
is validly existing in good standing as a business trust under the Delaware Act
with the power and authority to own property and to conduct its business as
described in the Registration Statement and Prospectus, to issue the Preferred
Securities and the Common Securities and to enter into and perform its
obligations under each of the Operative Agreements, to which it is a party. The
Trust is not a party to or otherwise bound by any agreement other than those
described in the Prospectus. The Trust is and will, under current law, be
classified for United States federal income tax purposes as a grantor trust and
not as an association taxable as a corporation.
(x) Authorization of the Purchase Contract Agreement. The Purchase
Contract Agreement has been duly authorized by the Company and, when validly
executed and delivered by the Company and assuming due authorization, execution
and delivery of the Purchase Contract Agreement by the Purchase Contract Agent,
the Purchase Contract Agreement will constitute a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally or by general equitable principles (regardless of
whether enforcement is considered in a proceeding at law or in equity).
(xi) Authorization of the Pledge Agreement. The Pledge Agreement has
been duly authorized by the Company and, when validly executed and delivered by
the Company and assuming due authorization, execution and delivery of the Pledge
Agreement by the Collateral Agent and the Purchase Contract Agent, the Pledge
Agreement will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles (regardless of whether enforcement
is considered in a proceeding at law or in equity).
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(xii) Authorization of Common Securities. As of the Closing Time, the
Common Securities will have been duly authorized for issuance by the Trust
pursuant to the Declaration and, when issued and delivered by the Trust to the
Company against payment therefor as described in the Prospectus, will be validly
issued and fully paid and non-assessable undivided common beneficial interests
in the assets of the Trust. The issuance of the Common Securities will not be
subject to preemptive or other similar rights. As of the Closing Time, all of
the issued and outstanding Common Securities of the Trust will be directly owned
by the Company, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right.
(xiii) Authorization of Preferred Securities. The Preferred Securities
have been duly authorized for issuance by the Trust and, when issued and
delivered against payment therefor as provided herein, will be validly issued
and fully paid and non-assessable undivided preferred beneficial interests in
the assets of the Trust. The issuance of the Preferred Securities will not be
subject to preemptive or other similar rights. The Preferred Securities will be
in the form contemplated by, and each registered holder thereof will be entitled
to the benefits of, the Declaration.
(xiv) Authorization of the FELINE PRIDES. The FELINE PRIDES have been
duly authorized for issuance and sale to the Underwriters and, when issued and
delivered against payment therefor as provided herein, will be validly issued
and fully paid and non-assessable. The issuance of the FELINE PRIDES is not
subject to preemptive or other similar rights. All corporate action required to
be taken for the authorization, issuance and delivery of the FELINE PRIDES have
been validly taken.
(xv) Authorization of the Shares. The shares of Common Stock to be
issued and sold by the Company pursuant to the Purchase Contract Agreement (the
"Shares") have been duly authorized and validly reserved for issuance by the
Company and, when issued and delivered in accordance with the provisions of the
Purchase Contract Agreement, the Purchase Contracts and the Pledge Agreement,
will be validly issued and fully paid and non-assessable. The issuance of the
Shares will not be subject to preemptive or other similar rights. All corporate
action required to be taken for the authorization, issuance and delivery of the
Shares has been validly taken.
(xvi) Authorization of Declaration. The Declaration has been duly
authorized by the Company and, at the Closing Time, will have been executed and
delivered by the Company and the Trustees and, assuming due authorization,
execution and delivery of the Declaration by the Property Trustee and the
Delaware Trustee, the Declaration will, at the Closing Time, constitute a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a proceeding at
law or in equity).
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(xvii) Authorization of Guarantee Agreements. Each of the Guarantee
Agreements has been duly authorized by the Company and, when validly executed
and delivered by the Company and in the case of the Preferred Securities
Guarantee Agreement, assuming due authorization, execution and delivery of the
Preferred Securities Guarantee Agreement by the Guarantee Trustee, the Guarantee
Agreements will constitute valid and binding agreements of the Company,
enforceable against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles (regardless of whether enforcement
is considered in a proceeding at law or in equity).
(xviii) Administrative Trustees. Each of the Administrative Trustees
of the Trust is an employee of the Company and has been duly authorized by the
Company to execute and deliver the Declaration.
(xix) Authorization of this Agreement, the Pricing Agreement and the
Remarketing Agreement. This Agreement, the Pricing Agreement and the Remarketing
Agreement have been duly authorized, executed and delivered by each of the
Company and the Trust.
(xx) Authorization of the Indenture. The Indenture has been duly
authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery of the Indenture by the Debt Trustee, the
Indenture constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally or by
general equitable principles (regardless of whether enforcement is considered in
a proceeding at law or in equity).
(xxi) Authorization of Senior Notes. The Senior Notes have been duly
authorized by the Company for issuance and sale to the Trust as contemplated by
the Prospectus. The Senior Notes, when issued and authenticated in the manner
provided for in the Indenture and delivered against payment of the stated
consideration therefor, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles (regardless of whether enforcement
is considered in a proceeding at law or in equity). The Senior Notes will be in
the form contemplated by, and each registered holder thereof will be entitled to
the benefits of, the Indenture.
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(xxii) Descriptions of the Securities and the Operative Agreements.
The Securities and the Operative Agreements, as of each Representation Date,
conform and will conform, as applicable, in all material respects to the
statements relating thereto contained in the Prospectus and will be in
substantially the form filed or incorporated, or to be incorporated, by
reference, as the case may be, as an exhibit to the Registration Statement.
(xxiii) Absence of Defaults and Conflicts. None of the Trust, the
Company or any of the Company's subsidiaries is in violation of its charter or
bylaws or other constitutive documents or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Trust, the Company or any of
the Company's subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Trust, the Company or
any subsidiary of the Company is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a Material
Adverse Effect. The entry by the Company into the Purchase Contracts underlying
the Income PRIDES, the offer of the Securities as contemplated herein and in the
Prospectus, the assurance of the Shares and the sale of the Shares pursuant to
the Purchase Contracts, the execution, delivery and performance by the Company
and the Trust of each of the Operative Agreements to which it is a party and any
other agreement or instrument entered into or issued or to be entered into or
issued by the Company or the Trust, as applicable, in connection with the
transactions contemplated hereby or thereby or in the Registration Statement and
the Prospectus and the consummation of the transactions contemplated herein and
in the Registration Statement and the Prospectus (including, the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of Proceeds")
and compliance by the Offerors with their obligations hereunder and thereunder
do not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Trust, the
Company or any subsidiary of the Company pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens, charges
or encumbrances that would not result in a Material Adverse Effect), nor will
such action result in any violation of the provisions of the Declaration or
certificate of trust of the Trust or the charter or bylaws or other constitutive
documents of the Company or any subsidiary of the Company or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Trust, the Company or any subsidiary of the Company or any of their
assets, properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company, subsidiary of the Company or the Trust.
(xxiv) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent, that, individually or in the aggregate, may reasonably be
expected to result in a Material Adverse Effect.
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(xxv) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the Company
or the Trust, threatened, against or affecting the Trust, the Company or any
subsidiary of the Company, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which, individually or in the
aggregate, might reasonably be expected to result in a Material Adverse Effect,
or which, individually or in the aggregate, might reasonably be expected to
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the Operative Agreements, the
performance by the Company or the Trust of their obligations under any of the
Operative Agreements; the aggregate of all pending legal or governmental
proceedings to which the Trust, the Company or any subsidiary of the Company is
a party or of which any of their respective property or assets is the subject
which are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.
(xxvi) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described or filed as required.
(xxvii) Possession of Intellectual Property. Except as disclosed in
the Prospectus, the Company and its subsidiaries own or possess, or can acquire
on reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business now
operated by them, other than those the absence of which would not have a
Material Adverse Effect and neither the Company nor any of its subsidiaries has
received any notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property or of
any facts or circumstances which would render any Intellectual Property invalid
or inadequate to protect the interest of the Company or any of its subsidiaries
therein, and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(xxviii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency is necessary or
required for the entry into the Purchase Contracts underlying the Income PRIDES
or in connection with the issuance and sale of the Common Securities, the
offering of the Securities and the issuance and sale of the Shares by the
Company pursuant to such Purchase Contracts, for the due authorization,
execution and delivery by the Trust or the Company of the Operative Agreements
or for the performance by the Trust or
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<PAGE> 12
the Company of its obligations under any of the Operative Agreements to which it
is a party, except such as has been already obtained or as may be required under
the 1933 Act or the 1933 Act Regulations or state securities laws.
(xxix) Possession of Licenses and Permits. The Company and its
subsidiaries own or possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them other than those the
absence of which would not have a Material Adverse Effect; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not, singly
or in the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xxx) Title to Property. The Company and its subsidiaries have good
and marketable title to all material real properties owned by the Company and
its subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company or any of its
subsidiaries; and all of the leases and subleases material to the business of
the Company and its subsidiaries, considered as one enterprise, and under which
the Company or any of its subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor any
subsidiary has any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any subsidiary under
any of the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease.
(xxxi) Investment Company Act. Neither the Company nor the Trust is,
and upon the issuance and sale (as applicable) of the Securities as herein
contemplated and the application of the net proceeds therefrom as described in
the Prospectus neither the Company nor the Trust will be, an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act").
(xxxii) Public Utility Holding Company Act. The Company is presently
exempt from the provisions of the Public Utility Holding Company Act of 1935
(except Section 9(a)(2) thereof).
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<PAGE> 13
(xxxiii) Cuba Act. The Offerors complied with, and are and will be in
compliance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of the
Florida Statutes, and the rules and regulations thereunder (collectively, the
"Cuba Act") or are exempt therefrom.
(xxxiv) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is
in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental Laws
and are each in compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) there are no events or circumstances
that might reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any Trustee of the Trust and delivered to the Underwriters or to
counsel for the Underwriters in connection with the offering of the Securities
shall be deemed a representation and warranty by the Company or the Trust, as
applicable, to the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
(a) Initial Securities. On the basis of the representations, warranties
and agreements herein contained and subject to the terms and conditions herein
set forth, the Offerors agree to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Offerors, at the price per security set forth in the Pricing Agreement,
the number of Initial Securities set forth in Schedule A hereto opposite the
name of such Underwriter, plus any additional number of Initial Securities that
such Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
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<PAGE> 14
The purchase price per Security to be paid by the several Underwriters
shall be an amount equal to the respective initial public offering price per
Security, less an amount per such Security to be determined by agreement between
the Underwriters and the Offerors. The initial public offering price per
Security shall be a fixed price to be determined by agreement between the
Underwriters and the Offerors. The initial public offering price and the
purchase price, when so determined, shall be set forth in the Pricing Agreement.
In the event that such prices have not been agreed upon and the Pricing
Agreement has not been executed and delivered by all parties thereto by the
close of business on the fourteenth business day following the date of this
Agreement, this Agreement shall terminate forthwith, without liability of any
party to any other party, unless otherwise agreed to by the Offerors and the
Underwriters.
(b) Option Securities. On the basis of the representations, warranties and
agreements herein contained and subject to the terms and conditions herein set
forth, the Offerors hereby grant an option to the Underwriters, severally and
not jointly, to purchase at their election up to an additional 1,350,000 Option
Securities at the price per share set forth in the Pricing Agreement. The option
hereby granted will expire automatically at the close of business on the 30th
calendar day after the date hereof and may be exercised in whole or in part from
time to time only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial Securities upon
notice by the Underwriters to the Offerors setting forth the aggregate number of
additional Option Securities as to which the several Underwriters are then
exercising the option and the time, date and place of payment and delivery for
such Option Securities. Any such time and date of payment and delivery (a "Date
of Delivery") shall be determined by the Underwriters and the Offerors, but
shall not be later than seven full business days after the exercise of said
options, nor in any event prior to the Closing Time, unless otherwise agreed
upon by the Underwriters and the Offerors. If the option is exercised as to all
or any portion of the Option Securities, each of the Underwriters, severally and
not jointly, will purchase that proportion of the total number of Option
Securities then being purchased which the number of Initial Securities each such
Underwriter has severally agreed to purchase bears to the total number of
Initial Securities, subject to such adjustments as the Underwriters in their
discretion shall make to eliminate any sales or purchases of a fractional number
of Option Securities.
(c) Pledge of Securities. The Preferred Securities will be pledged with
the Collateral Agent to secure the obligations of the holders to purchase Common
Stock under the Purchase Contracts. Such pledge shall be effected by the
transfer to the Collateral Agent of the Preferred Securities at the Closing Time
and appropriate Date of Delivery, if any, in accordance with the Pledge
Agreement.
(d) Delivery and Payment. Delivery of certificates for the Initial
Securities shall be made at the offices of Merrill Lynch in New York, New York,
against the delivery to the Collateral Agent of the Preferred Securities by such
Underwriters or on their behalf, and payment of the purchase price for the
Initial Securities shall be made at the offices of LeBoeuf, Lamb, Greene &
MacRae, L.L.P., 125 West 55th Street, New York, New York 10019, or at such other
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<PAGE> 15
place as shall be agreed upon by the Underwriters and the Offerors, at 10:00
A.M. (Eastern time) on the third business day after the date on which the
Pricing Agreement is executed (unless postponed in accordance with the
provisions of Section 10 hereof), or such other time not later than ten business
days after such date as shall be agreed upon by the Underwriters and the
Offerors (such time and date of payment and delivery being herein called the
"Closing Time"). In addition, in the event that the Underwriters have exercised
their option to purchase any or all of the Option Securities, payment of the
purchase price for, and delivery of such Option Securities, shall be made at the
above-mentioned offices of LeBoeuf, Lamb, Greene & MacRae, L.L.P., or at such
other place as shall be agreed upon by the Underwriters and the Offerors, on the
relevant Date of Delivery as specified in the notice from the Underwriters to
the Offerors.
Payment for the Securities shall be made by wire transfer of
immediately available funds to a bank account designated by the Company, against
delivery to the Underwriters of the Securities to be purchased by them. It is
understood that each Underwriter has authorized Merrill Lynch, for its account,
to accept delivery of, receipt for, and make payment of the purchase price for,
the Securities which it has severally agreed to purchase. Merrill Lynch,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Securities to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder. Delivery of,
and payment for, the Securities shall be made through the facilities of The
Depository Trust Company.
(e) Denominations; Registration. The certificates for the Securities
shall be in such denominations and registered in such names as the Underwriters
may request in writing at least two full business days prior to the Closing Time
or the relevant Date of Delivery, as the case may be. The certificates for the
Securities will be made available for examination and, if applicable, packaging
by the Underwriters in The City of New York not later than 10:00 A.M. (Eastern
time) on the business day prior to the Closing Time or the relevant Date of
Delivery, as the case may be.
SECTION 3. Covenants of the Offerors. The Offerors covenant with the
Underwriters as follows:
(a) Compliance with the Securities Regulations and Commission Requests.
The Offerors will comply with the requirements of Rule 430A of the 1933 Act and,
subject to Section 3(b), will notify the Underwriters immediately, and confirm
the notice in writing, (i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the Prospectus or any
amended Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities or the
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<PAGE> 16
Shares for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Offerors will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. Prior to the filing, the Offerors will cooperate with the
Underwriters in the preparation of such Prospectus to assure that the
Underwriters have no reasonable objection to the form or content thereof when
filed or mailed. The Offerors will use their reasonable best efforts to prevent
the issuance of any stop order and, if any stop order is issued, to promptly
obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Offerors will give the Underwriters
notice of their intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)) or any amendment, supplement
or revision to either the prospectus included in the Registration Statement at
the time it became effective or to the Prospectus, whether pursuant to the 1933
Act, the 1934 Act or otherwise; will furnish the Underwriters with copies of any
such documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Underwriters or counsel for the Underwriters shall reasonably object in writing
within three business days of receipt.
(c) Delivery of Registration Statements. The Offerors have furnished or
will deliver to Merrill Lynch and counsel for the Underwriters without charge,
copies of the Registration Statement, showing signatures, as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and copies of all consents and certificates
of experts, showing signatures, and will also deliver to Merrill Lynch, without
charge, a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the Underwriters. The
copies of the Registration Statement and each amendment thereto furnished to
Merrill Lynch will be identical in all material respects to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Offerors have delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Offerors hereby consent to the
use of such copies for purposes permitted by the 1933 Act. The Offerors will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to each Underwriter will be identical in all
material respects to the electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
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<PAGE> 17
(e) Continued Compliance with Securities Laws. The Offerors will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and the Registration Statement and the
Prospectus. If at any time when a prospectus is required by the 1933 Act or the
1934 Act to be delivered in connection with sales of the Securities any event
shall occur or condition shall exist as a result of which it is necessary, in
the opinion of counsel for the Underwriters or counsel for the Company, to amend
the Registration Statement or amend or supplement the Prospectus in order that
the Prospectus will not include any untrue statements of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of any
such counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Offerors will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Offerors will furnish to the Underwriters, without charge, such number of copies
of such amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Offerors will use their reasonable
best efforts, in cooperation with the Underwriters, to qualify the Securities
and the Shares for offering and sale under the applicable securities laws of
such states and other jurisdictions as the Underwriters may designate and to
maintain such qualifications in effect for so long as may be required in
connection with the distribution of the Securities and the Shares; provided,
however, that neither Offeror shall be obligated to file any general consent to
service of process or to qualify as a foreign trust or corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Offerors will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for so long as may be required in connection with the
distribution of the Securities and the Shares.
(g) Rule 158. The Trust (to the extent applicable) and the Company will
timely file such reports pursuant to the 1934 Act as are necessary in order to
make generally available to their securityholders as soon as practicable an
earnings statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Offerors will use the net proceeds from the
sale of the Securities in the manner specified in the Prospectus under "Use of
Proceeds."
(i) Listing. The Offerors will use their best efforts to have the
Income PRIDES and the Shares approved for listing, subject only to official
notice of issuance, on the New York Stock Exchange and to cause the Securities
to be registered under the 1934 Act.
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<PAGE> 18
(j) Restriction on Sale of Securities. During a period of 90 days from
the date of the Pricing Agreement, neither the Trust nor the Company will,
without the prior written consent of Merrill Lynch, (A) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option for the sale of, or
otherwise transfer or dispose of any Securities, Purchase Contracts, Preferred
Securities, Common Stock or any security of the Trust or the Company similar to
the Securities, Purchase Contracts, Preferred Securities or Common Stock or any
security convertible into or exercisable or exchangeable for or repayable with
Securities, Purchase Contracts, Preferred Securities, Common Stock or any equity
securities substantially similar to the Securities, Purchase Contracts,
Preferred Securities or Common Stock; or (B) directly or indirectly, enter into
any swap or any other agreement or any transaction that transfers, in whole or
in part, the economic equivalent of ownership of the Securities, Purchase
Contracts, Preferred Securities or Common Stock, any security convertible into
or exercisable or exchangeable for or repayable with the Securities, Purchase
Contracts, Preferred Securities, Common Stock or equity securities substantially
similar to the Securities, Purchase Contracts, Preferred Securities or Common
Stock whether any such swap or transaction is to be settled by delivery of
Securities, Purchase Contracts, Preferred Securities, Common Stock or other
securities, in cash or otherwise. The foregoing sentence shall not affect the
ability of the Offerors to take any such action (i) in connection with any
employee benefit, dividend reinvestment and stock option or stock purchase plans
of the Company or its subsidiaries referred to in the Prospectus; (ii) in
connection with the offering of the Securities, including the Preferred
Securities and the Senior Notes, issued pursuant to this Agreement; (iii) in
connection with any securities issued pursuant to or sold in connection with any
securities of the Company or its subsidiaries, outstanding as of the date
hereof, that are convertible into or exercisable or exchangeable for or
repayable with any securities of the Company and its subsidiaries; (iv) in
connection with the FELINE PRIDES to be created or recreated upon substitution
of Pledged Securities, or shares of Common Stock issuable upon early settlement
of the FELINE PRIDES; (v) upon exercise of stock options; (vi) issuances of
Common Stock or Preferred Securities as consideration for acquisitions by the
Company, provided that such securities issued in an offering registered under
the 1933 Act and any person or entity who receives such consideration agrees in
writing to take such consideration subject to the terms of this Section 3(j) for
the remaining duration of the 90 day period, if any; or (vii) in connection with
its proposed offering of $160,000,000 aggregate principal amount of senior debt
securities as disclosed in the Prospectus.
(k) Reporting Requirements. The Offerors, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
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(l) Reserve of Common Stock. The Company will reserve and keep
available at all times, free of preemptive or other similar rights and liens
and adverse claims, sufficient shares of Common Stock to satisfy any
obligations to issue Shares upon settlement of the Purchase Contracts and
shall take all actions necessary to keep effective the Registration Statement
with respect to the Shares.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of the obligations of the Offerors under this Agreement, the Pricing
Agreement, the Purchase Contracts, the Purchase Contract Agreement and the
Pledge Agreement, including (i) the costs associated with the preparation,
printing and filing of the Registration Statement (including financial
statements and exhibits) as originally filed and of each amendment thereto, (ii)
the costs associated with the preparation, printing and delivery to the
Underwriters of this Agreement, the Pricing Agreement, any agreement among
Underwriters, the other Operative Agreements and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the costs associated with the preparation, issuance and
delivery of the Securities to the Underwriters, including any transfer taxes and
any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the counsel,
accountants and other advisors or agents (including transfer agents and
registrars) to the Offerors, as well as the fees and disbursements of the
Trustees, the Guarantee Trustee, the Debt Trustee, the Purchase Contract Agent,
the Collateral Agent and any Depositary, and their respective counsel, (v) the
printing and delivery to the Underwriters of copies of each preliminary
prospectus, and the Prospectus and any amendments or supplements thereto, (vi)
the fees charged by nationally recognized statistical rating organizations for
the rating of the Securities, (vii) the fees and expenses incurred with respect
to the listing of the Income PRIDES and the Shares on the New York Stock
Exchange, (viii) the qualification of the Securities and the Shares under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (ix) the cost of making the
Securities eligible for clearance and settlement through the facilities of The
Depository Trust Company, and (x) any fees payable or expenses incurred pursuant
to any Uniform Commercial Code related filings.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Securities pursuant to this
Agreement are subject to the accuracy of the representations and warranties of
the Offerors contained in Section 1 hereof or in certificates of any trustees of
the Trust or any officer of the Company or any of its subsidiaries delivered
pursuant to the provisions hereof, to the performance by the Offerors of their
covenants and other obligations hereunder, and to the following further
conditions:
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(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, shall have become
effective and at Closing Time, and any Date of Delivery no stop order suspending
the effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A).
(b) Opinions of Counsel to the Company and the Trust. At Closing Time,
the Underwriters shall have received the favorable opinions, dated as of Closing
Time, of (i) Arnold R. Madigan, Esq., General Counsel to the Company, and
Dickinson Wright PLLC, special counsel for the Company in combination and (ii)
Richards, Layton & Finger, counsel for the Trust, each in form and substance
satisfactory to counsel for the Underwriters, to the effect set forth in
Exhibits B and C hereto, respectively, and to such further effect as counsel to
the Underwriters may reasonably request.
(c) Opinion of Special Tax Counsel for the Company and the Trust. At
Closing Time, the Company, the Trust and Underwriters shall have received the
favorable opinion, dated as of Closing Time, of Dickinson Wright PLLC, special
tax counsel to the Company and the Trust, that (i) the Senior Notes will be
classified for United States federal income tax purposes as indebtedness of the
Company, (ii) the Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation
and (iii) the discussion set forth in the Prospectus under the heading "Material
Tax Consequences" constitutes, in all material respects, a fair and accurate
summary of the United States federal income tax consequences of the purchase,
ownership and disposition of FELINE PRIDES, Preferred Securities and Shares
under current law. Such opinion may be conditioned on, among other things, the
initial and continuing accuracy of the facts, financial and other information,
covenants and representations set forth in certificates of officers of the
Company and other documents deemed necessary for such opinion.
(d) Opinion of Counsel for Property Trustee, Guarantee Trustee,
Delaware Trustee and Purchase Contract Agent . At Closing Time, the Underwriters
shall have received the favorable opinion, dated as of Closing Time, of Pepper
Hamilton, LLP, counsel to Bank One Delaware, Inc., as Delaware Trustee, and to
Bank One Trust Company, National Association, as Property Trustee, Guarantee
Trustee and Purchase Contract Agent, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) Bank One Trust Company, National Association is a national
banking corporation duly organized, validly existing and in good
standing under the laws of the United States with all necessary
corporate power and authority to execute and deliver, and
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to carry out and perform its obligations under the terms of, the
Declaration, the Preferred Securities Guarantee Agreement, the Purchase
Contract Agreement, the Pledge Agreement and the Remarketing Agreement;
(ii) Bank One Delaware, Inc. is a Delaware corporation, duly
organized, validly existing and in good standing, with full corporate
power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Declaration;
(iii) The execution, delivery and performance by Bank One
Trust Company, National Association, in its capacity as Property
Trustee, of the Declaration, and the execution, delivery and
performance by Bank One Trust Company, National Association, in its
capacity as Guarantee Trustee, of the Preferred Securities Guarantee
Agreement have been duly authorized by all necessary corporate action
on the part of Bank One Trust Company, National Association. The
Declaration and the Preferred Securities Guarantee Agreement have been
duly executed and delivered by Bank One Trust Company, National
Association, in its capacity as Property Trustee, in the case of the
Declaration, and by Bank One Trust Company, National Association, in
its capacity as Guarantee Trustee, in the case of the Preferred
Securities Guarantee Agreement, and the Declaration and the Preferred
Securities Guarantee Agreement constitute the legal, valid and binding
obligations of Bank One Trust Company, National Association,
enforceable against Bank One Trust Company, National Association in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles (regardless of whether
enforcement is considered in a proceeding at law or in equity);
(iv) The execution, delivery and performance by the Purchase
Contract Agent of the Purchase Contract Agreement, the Pledge Agreement
and the Remarketing Agreement, and the authentication and delivery of
the Securities have been duly authorized by all necessary action on the
part of the Purchase Contract Agent. The Purchase Contract Agreement,
the Pledge Agreement and the Indenture have been duly executed and
delivered by the Purchase Contract Agent, and constitute the legal,
valid and binding obligations of the Purchase Contract Agent,
enforceable against the Purchase Contract Agent in accordance with
their respective terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles (regardless of whether
enforcement is considered in a proceeding at law or in equity);
(v) The execution, delivery and performance by Bank One Trust
Company, National Association, in its capacity as Property Trustee, of
the Declaration, the execution, delivery and performance by Bank One
Trust Company, National Association,
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<PAGE> 22
in its capacity as Guarantee Trustee, of the Preferred Securities
Guarantee Agreement, and the execution, delivery and performance by
Bank One Trust Company, National Association, in its capacity as
Purchase Contract Agent of the Purchase Contract Agreement, the Pledge
Agreement and the Remarketing Agreement, do not conflict with, or
constitute a breach of, Bank One Trust Company, National Association's
charter or bylaws; and
(vi) No consent, approval or authorization of, or registration
with or notice to, any federal banking authority is required for the
execution, delivery or performance by Bank One Trust Company, National
Association, in its capacity as Property Trustee, of the Declaration,
or by Bank One Trust Company, National Association, in its capacity as
Guarantee Trustee, of the Preferred Securities Guarantee Agreement or
by Bank One Trust Company, National Association, in its capacity as
Purchase Contract Agent, of the Purchase Contract Agreement, the Pledge
Agreement and the Remarketing Agreement.
(e) Opinion of Counsel for Underwriters. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the Underwriters,
in form and substance satisfactory to the Underwriters, with respect to the
issuance and sale of the Securities and other related matters as the
Underwriters may reasonably require. Such counsel may state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company, of Trustees of the Trust
and of public officials.
(f) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Trust or of the Company and its subsidiaries considered as one enterprise, in
each case whether or not arising in the ordinary course of business, and the
Underwriters shall have received a certificate of the Chairman of the Board, the
President or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company and a certificate of an Administrative Trustee
of the Trust, dated as of Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in Section
1(a) hereof are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Company or the Trust, as
applicable, has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing Time, and (iv) no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(g) Accountant's Comfort Letters. At the time of the execution of this
Agreement, the Underwriters shall have received from each of (i) Arthur Andersen
LLP and (ii) with respect to ENSTAR financial statements and financial
information only, from KPMG Peat Marwick LLP, a letter dated such date, in form
and substance satisfactory to the Underwriters, containing
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<PAGE> 23
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained, including through incorporation by
reference, in the Registration Statement and the Prospectus.
(h) Bring-down Comfort Letters. At Closing Time, the Underwriters shall
have received from Arthur Andersen LLP a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished by
them pursuant to Section (g) of this Section 5, except that the "specified date"
referred to shall be a date not more than three business days prior to Closing
Time.
(i) Maintenance of Rating. At the Closing Time and at any relevant Date
of Delivery, the Securities shall be rated in one of the four highest rating
categories for preferred stock ("Investment Grade") by Standard & Poor's Rating
Service and by Moody's Investors Service, Inc., and the Company shall have
delivered to the Underwriters a letter, dated as of such date, from each such
rating organization, or other evidence satisfactory to the Underwriters,
confirming that the Securities have such ratings. At the Closing Time and at any
relevant Date of Delivery, (i) there shall not have occurred, subsequent to the
date of this Agreement, a downgrading in the rating of the Securities or any of
the Company's other securities to a rating below Investment Grade by any such
rating organization or any other "nationally recognized statistical rating
organization," as defined for purposes of Rule 436(g)(2) under the 1933 Act
Regulations, and (ii) no such organization shall have publicly announced,
subsequent to the date of this Agreement, that it has under surveillance or
review, with possible negative implications, its rating of the Securities or any
of the Company's other securities.
(j) Approval of Listing. At Closing Time, the Income PRIDES and the
Shares shall have been approved for listing on the New York Stock Exchange,
subject only to official notice of issuance.
(k) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option to purchase all or any portion of the Option
Securities, the representations and warranties of the Offerors contained herein
and the statements in any certificates furnished by the Offerors hereunder shall
be true and correct as of each Date of Delivery and, at the relevant Date of
Delivery, the Underwriters shall have received:
(i) Officers' and Trustee's Certificates. A certificate, dated
such Date of Delivery, of the Chairman of the Board, the President or a
Vice President of the Company and of the chief financial or chief
accounting officer of the Company and a certificate of an
Administrative Trustee of the Trust confirming that the certificate
delivered at Closing Time pursuant to Section 5(g) hereof is true and
correct as of such Date of Delivery.
(ii) Opinions of Counsel to the Company and the Trust. The
favorable opinion of (i) Arnold R. Madigan, Esq., General Counsel to
the Company, and Dickinson Wright PLLC, counsel for the Company, and
(ii) Richards, Layton & Finger, counsel for the
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<PAGE> 24
Trust, each in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinions required by
Section 5(b) hereof.
(iii) Opinion of Special Tax Counsel for the Company and the
Trust. The favorable opinion of Dickinson Wright PLLC, special tax
counsel to the Company and the Trust, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and otherwise to the same
effect as the opinion required by Section 5(c) hereof.
(iv) Opinion of Counsel for Delaware Trustee, Property
Trustee, Guarantee Trustee and Purchase Contract Agent. The favorable
opinion of Pepper Hamilton, LLP, counsel to Bank One Delaware, Inc., as
Delaware Trustee, and to Bank One Trust Company, National Association,
as Property Trustee, Guarantee Trustee and Purchase Contract Agent, in
form and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities and otherwise
to the same effect as the opinion required by Sections 5(d) hereof.
(v) Opinion of Counsel for the Underwriters. The favorable
opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Section 5(e) hereof.
(vi) Bring-down Comfort Letters. Letter from Arthur Andersen
LLP, in form and substance satisfactory to the Underwriters and dated
such Date of Delivery, substantially the same in form and substance as
the letter furnished to the Underwriters pursuant to Section 5(h)
hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than three business
days prior to such Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale (as applicable) of the Securities as herein contemplated, or
in order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, contained herein; and all
proceedings taken by the Offerors in connection with the issuance and sale (as
applicable) of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters.
(m) Termination of this Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Agreement (or, with respect to the Underwriters' exercise of the
over-allotment option for the purchase of Option Securities on a Date of
Delivery after the Closing Time, the obligations of the Underwriters to purchase
the Option Securities on such Date of Delivery) may be terminated by the
Underwriters by notice to
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<PAGE> 25
the Offerors at any time at or prior to the Closing Time (or such Date of
Delivery, as applicable), and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except that
Sections 6, 7 and 8 shall survive any such termination and remain in full force
and effect.
SECTION 6. Indemnification.
(a) Indemnification of the Underwriters by the Offerors. The Offerors,
jointly and severally, agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information deemed to be part thereof, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, referred to
under (i) above; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Offerors; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel), reasonably incurred
in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, referred to under (i) above, to the extent that any such
expense is not paid under (i) or (ii) above; provided, however, that
this indemnity agreement shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon
and in conformity with written information furnished to the Offerors by
the Underwriters expressly for use in the Registration Statement (or
any amendment thereto), including the Rule 430A Information deemed to
be part thereof, if applicable, or any preliminary prospectus or the
Prospectus (or any
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<PAGE> 26
amendment or supplement thereto) and provided, further, that as to any
preliminary prospectus this indemnity agreement shall not inure to the
benefit of any Underwriter or any person controlling that Underwriter
on account of any loss, claim, damage, liability or action arising from
the sale of Securities to any person by that Underwriter if that
Underwriter failed to send or give a copy of the Prospectus, as the
same may be amended or supplemented, to that person and the untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact in such preliminary
prospectus was corrected in said amended or supplemented Prospectus and
the delivery thereof was required by law and would have constituted a
complete defense to the claim of that person, unless such failure
resulted from non-compliance by the Company with Section 3(a) or (b).
For purposes of the second provision to the immediately preceding
sentence, the term Prospectus shall not be deemed to include the
documents incorporated by reference therein, and no Underwriter shall
be obligated to send or give any supplement or amendment to any
document incorporated by reference in a preliminary prospectus or
supplement thereto or the Prospectus to any person.
(b) Indemnification of the Company, Directors and Officers and the
Trust and Trustees. Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, its directors, each of its officers who
signed the Registration Statement, the Trust, each of the Trustees who signed
the Registration Statement and each person, if any, who controls the Company or
the Trust within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information deemed to be part
thereof, if applicable, or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Offerors by the Underwriters expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability that it may have otherwise than on account of this indemnity
agreement. Except as otherwise set forth below, in the case of parties
indemnified pursuant to Section 6(a) above, counsel to the indemnified parties
shall be selected by Merrill Lynch, and, in the case of parties indemnified
pursuant to Section 6(b) above, counsel to the indemnified parties shall be
selected by the Company. An indemnifying party may participate at its own
expense in the defense of any such action. If it so elects within a reasonable
time after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action,
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unless such indemnified parties reasonably object to such assumption on the
ground that there may be legal defenses available to them which are different
from or in addition to those available to such indemnifying party. If an
indemnifying party assumes the defense of such action, the indemnifying parties
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution.
If the indemnification provided for in Sections 6(a) and 6(b)
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then the Company and the Underwriters shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Offerors on the one
hand and the Underwriters on the other hand, from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as
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is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Offerors on the one hand and of the
Underwriters on the other hand, in connection with the statements or omissions
that resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by Offerors on the one hand and
the Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of such
Securities pursuant to this Agreement (before deducting expenses) received by
the Offerors and the total underwriting discount or commission received by the
Underwriters, in each case as set forth on the cover of the Prospectus, bear to
the aggregate initial public offering price of such Securities as set forth on
such cover.
The relative fault of the Offerors on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Offerors or by the Underwriters, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
Notwithstanding the provisions of this Section 7, no
Underwriters shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission.
The Offerors and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
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For purposes of this Section 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, each Trustee of the Trust who signed the
Registration Statement and each person, if any, who controls the Company or the
Trust within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act shall have the same rights to contribution as the Offerors. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial Securities set forth opposite
their names on Schedule A hereto, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of Trustees of
the Trust or officers of the Company submitted pursuant to this Agreement, shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or controlling person thereof or by or
on behalf of the Trust or the Company, and shall survive delivery of the
Securities to the Underwriters pursuant to this Agreement.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriters may terminate this
Agreement, by notice to the Offerors, at any time at or prior to Closing Time,
(i) if there has been, since the date of this Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Trust or of the Company and its
subsidiaries considered as one enterprise, in each case whether or not arising
in the ordinary course of business, or (ii) if there has occurred any material
adverse change in the financial markets in the United States, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Underwriters, impracticable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
if trading in any securities of the Trust or the Common Stock or any other
security of the Company has been suspended or limited by the Commission or the
New York Stock Exchange, or if trading generally on the American Stock Exchange
or the New York Stock Exchange or in the Nasdaq National Market has been
suspended or limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by either of said exchanges or
by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal, New York or
Michigan authorities.
(b) Liabilities. If this Agreement and the Pricing Agreement are
terminated pursuant to this Section 9, such termination shall be without
liability of any party to any other party except as provided in Section 4
hereof, and provided further that Sections 1, 4, 6, 7 and 8 shall survive such
termination and remain in full force and effect.
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SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time or the relevant Date of
Delivery, as the case may be, to purchase the Securities that it or they are
obligated to purchase under this Agreement and the Pricing Agreement (the
"Defaulted Securities"), then Merrill Lynch shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, Merrill Lynch shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
total number of the Securities to be purchased on such date pursuant to this
Agreement, the non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations under this Agreement bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the total
number of the Securities to be purchased on such date pursuant to this
Agreement, this Agreement (or, with respect to the Underwriters' exercise of the
over-allotment option for the purchase of Option Securities on a Date of
Delivery after the Closing Time, the obligations of the Underwriters to
purchase, and the Company to sell, such Option Securities on such Date of
Delivery) shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i)
a termination of this Agreement, or (ii) in the case of a Date of Delivery after
the Closing Time, a termination of the obligations of the Underwriters and the
Company with respect to the related Option Securities, as the case may be,
either Merrill Lynch or the Company shall have the right to postpone the Closing
Time or the relevant Date of Delivery, as the case may be, for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or the Prospectus or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters c/o Merrill Lynch at World
Financial Center, North Tower, New York, New York 10281-1328, Attention of James
McBurney and Phillip Jones with a copy to LeBoeuf, Lamb, Greene & MacRae,
L.L.P., 125 West 55th Street, New York, New York 10019-5389, Attention of
William S. Lamb, Esq.; notices to the Company shall be directed to it at 405
Water Street, Port Huron, Michigan 48060, Attention of Sebastian Coppola, with a
copy to Dickinson Wright PLLC, 500 Woodward Avenue, Suite 4000, Detroit,
Michigan 48226, Attention of Verne C. Hampton.
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SECTION 12. Parties. This Agreement and the Pricing Agreement shall each
inure to the benefit of and be binding upon each of the Offerors and the
Underwriters and their respective successors. Nothing expressed or mentioned in
this Agreement or the Pricing Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters and the
Offerors and their respective successors and the controlling persons and
officers, directors and Trustees referred to in Sections 6 and 7 and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or the Pricing Agreement or any provision herein
or therein contained. This Agreement and the Pricing Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the parties hereto and their respective successors, and
said controlling persons and officers, directors and Trustees and their heirs
and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW. THIS AGREEMENT AND THE PRICING AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WHOLLY IN SUCH STATE.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 15. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts hereof shall constitute a single instrument.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters, the Company and the Trust in accordance with
its terms.
Very truly yours,
SEMCO ENERGY INC.
By: _______________________
Name: _______________________
Title: _______________________
SEMCO CAPITAL TRUST II
By: _______________________
Name: _______________________
Title: Administrative Trustee
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANC OF AMERICA SECURITIES LLC
SALOMON SMITH BARNEY INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: __________________________
Authorized Signatory
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SCHEDULE A
<TABLE>
<CAPTION>
Name of Underwriter Number of Shares
------------------ ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 4,500,000
Banc of America Securities LLC 2,250,000
Salomon Smith Barney Inc. 2,250,000
---------
Total 9,000,000
</TABLE>
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SCHEDULE B
List of Subsidiaries
SEMCO Energy Ventures, Inc.
Alaska Pipeline Company
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<PAGE> 35
EXHIBIT A
SEMCO ENERGY INC.
(A MICHIGAN CORPORATION)
SEMCO CAPITAL TRUST II
(A DELAWARE BUSINESS TRUST)
9,000,000 FELINE PRIDES(sm)
(Stated Amount of $10 per Security)
each consisting of
a Purchase Contract of SEMCO Energy Inc.
Requiring the Purchase on August 16, 2003 (or Earlier)
of Certain Shares of Common Stock of SEMCO Energy Inc.
and
9% Trust Preferred Securities
of SEMCO Capital Trust II
PRICING AGREEMENT
June 12, 2000
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANC OF AMERICA SECURITIES LLC
SALOMON SMITH BARNEY INC.
c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281-1209
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated June 12, 2000 (the
"Underwriting Agreement"), relating to the purchase by Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America LLC and
Salomon Smith Barney Inc. as the Underwriters named in Schedule A thereto, of
the above FELINE PRIDES (the "Securities") of SEMCO Energy Inc. (the "Company"),
which include the 9% Trust Preferred Securities of SEMCO Capital Trust II (the
"Trust").
Pursuant to Section 2 of the Underwriting Agreement, the
Company and the Trust agree with each Underwriter as follows:
1. The initial public offering price per security for the
Securities, determined as provided in said Section 2, shall be $10.00.
2. The purchase price per security for the Securities to be
paid by the several Underwriters shall be $9.60, being an amount equal
to the initial public offering price set forth above less $0.40 per
security.
------------------
(SM) "FELINE PRIDES" is a service mark of Merrill Lynch & Co. Inc.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company and the Trust in accordance
with its terms.
Very truly yours,
SEMCO ENERGY INC.
By: /s/ S. Coppola
-----------------------------
Name:
Title:
SEMCO CAPITAL TRUST II
By: /s/ S. Coppola
-----------------------------
Title: Administrative Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANC OF AMERICA SECURITIES LLC
SALOMON SMITH BARNEY INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ J. McBurney
----------------------------------------
Authorized Signatory:
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EXHIBIT B
FORM OF OPINION OF SEMCO'S GENERAL AND SPECIAL COUNSEL
TO BE DELIVERED PURSUANT TO 5(b)
(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Michigan and has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under each of the Operative Agreements to which it is a
party; and the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(ii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the captions "Description of
Capital Stock", "Selected Financial Information" and "Capitalization" (except
for subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans or the Company's Direct Stock
Purchase and Dividend Reinvestment Plan referred to in the Prospectus or
pursuant to the exercise options referred to in the Prospectus). The shares of
issued and outstanding capital stock have been duly authorized and validly
issued and are fully paid and non-assessable; none of the outstanding shares of
capital stock was issued in violation of the preemptive or other similar rights
of any securityholder of the Company.
(iii) Each Subsidiary has been duly organized and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease or operate its
properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or be in good standing would not result
in a Material Adverse Effect; except as otherwise disclosed in the Registration
Statement, all of the capital stock of each Subsidiary owned by the Company,
directly or through subsidiaries, has been duly authorized and validly issued,
is fully paid and non-assessable and, to the best of our knowledge, is owned
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary.
(iv) The Trust is not required to be qualified and in good standing as
a foreign company in Michigan, except to the extent that the failure to so
qualify or be in good standing would not have a Material Adverse Effect on the
Trust; and the Trust is not a party to or otherwise bound by any agreement other
than those described in the Prospectus.
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(v) The Underwriting Agreement, the Pricing Agreement, the Remarketing
Agreement and the Declamation have been duly authorized, executed and delivered
by the Company.
(vi) The Declaration, the Indenture and the Preferred Securities
Guarantee Agreement have been duly qualified under the 1939 Act.
(vii) The Securities to be purchased by the Underwriters from the
Company and the Trust have been authorized for issuance and sale to the
Underwriters and, when issued and delivered by the Company and the Trust
pursuant to the Underwriting Agreement against payment of the consideration set
forth in the Pricing Agreement, will be validly issued and fully paid and
non-assessable; the issuance of such Securities will not be subject the
preemptive or other similar rights arising by law or otherwise.
(viii) The Shares subject to the Purchase Contract Agreement have been
duly authorized and validly reserved for issuance by the Company and, when
issued and delivered in accordance with the provisions of the Purchase Contract
Agreement, the Purchase Contracts and the Pledge Agreement, will be validly
issued and fully paid and non-assessable. The issuance of such Shares will not
be subject to preemptive or other similar rights arising by law or otherwise.
All corporate action required to be taken for the authorization, issuance and
delivery of the Shares has been validly taken.
(ix) The Purchase Contract Agreement has been duly authorized by the
Company and, when validly executed and delivered by the Company and assuming due
authorization, execution and delivery of the Purchase Contract Agreement by the
Purchase Contract Agent, the Purchase Contract Agreement will constitute a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a proceeding at
law or in equity).
(x) The Pledge Agreement has been duly authorized by the Company and,
when validly executed and delivered by the Company and assuming due
authorization, execution and delivery of the Pledge Agreement by the Collateral
Agent and the Purchase Contract Agent, the Pledge Agreement will constitute a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a proceeding at
law or in equity).
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<PAGE> 39
(xi) Each of the Guarantee Agreements has been duly authorized by the
Company and, when validly executed and delivered by the Company and in the case
of the Preferred Securities Guarantee Agreement, assuming due authorization,
execution and delivery of the Preferred Securities Guarantee Agreement by the
Guarantee Trustee, the Guarantee Agreements will constitute valid and binding
agreements of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding at law or in
equity).
(xii) The Indenture has been duly authorized, executed and delivered by
the Company and, assuming due authorization, execution and delivery of the
Indenture by the Debt Trustee, the Indenture constitutes a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding at law or in
equity).
(xiii) The Senior Notes have been duly authorized by the Company for
issuance and sale to the Trust as contemplated by the Prospectus. The Senior
Notes, when issued and authenticated in the manner provided for in the Indenture
and delivered against payment of the stated consideration therefor, will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding at law or in equity). The Senior Notes will be in the form
contemplated by, and each registered holder thereof will be entitled to the
benefits of, the Indenture.
(xiv) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus (other than the
financial statements and supporting schedules and other financial data included
or incorporated by reference therein or omitted therefrom, as to which we
express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied in all material respects with the
requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and
regulations of the Commission thereunder.
(xv) To our knowledge and other than as set forth in the Prospectus,
there is no statute or regulation required to be described in the Registration
Statement or the Prospectus or in the documents incorporated by reference
therein which are not described as required, there is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company or the
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<PAGE> 40
Trust, threatened, against or affecting the Trust, the Company or any subsidiary
of the Company, which is required to be disclosed in the Registration Statement
(other than as disclosed therein), or which, individually or in the aggregate,
might reasonably be expected to result in a Material Adverse Effect, or which,
individually or in the aggregate, might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the Operative Documents, the performance by the
Company or the Trust of their obligations under any of the Operative Agreements;
the aggregate of all pending legal or governmental proceedings to which the
Trust, the Company or any subsidiary of the Company is a party or of which any
of their respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material Adverse
Effect.
(xvi) When the Securities are delivered against payment therefor as
provided in the Underwriting Agreement, the holders of the Income PRIDES will be
entitled to the right and subject to the obligations specified in the Purchase
Contract Agreement.
(xvii) The Security Certificates are in the form contemplated by the
Purchase Contract Agreement.
(xviii) The information (A) included in the Prospectus under the
captions "Description of the FELINE PRIDES," "Description of the Purchase
Contracts," "Provisions of the Purchase Contract Agreement and the Pledge
Agreement," "Description of the Trust Preferred Securities," "Description of the
Guarantee," "Description of the Senior Unsecured Notes," "Description of Capital
Stock," "Description of Debt Securities," "Description of Trust Preferred
Securities," and "Description of Guarantees," (B) included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999 under the
captions "Business," "Legal Proceedings" and "Certain Relationships and Related
Transactions," and (C) in the Registration Statement under Items 14 and 15, to
the extent that it constitutes matters of law, summaries of legal matters, the
Company's charter and bylaws, other documents or legal proceedings, or legal
conclusions, has been reviewed by us and fairly present the information called
for with respect to such matters of law and fairly summarize the matters
referred to therein.
(xix) All descriptions in the Registration Statement of contracts and
other documents to which the Company or its subsidiaries are a party are
accurate in all material respects; to the best of our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects, and, to the best of our knowledge, no default exists in the due
performance or observance of any obligation, agreement, covenant or condition
contained in such contracts and other documents (except for such defaults that
would not have a Material Adverse Effect).
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<PAGE> 41
(xx) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the entry into the Purchase
Contracts underlying the Securities or in connection with the issuance and sale
of the Common Securities, the offering of the Securities and the issuance and
sale of the Shares by the Company pursuant to such Purchase Contracts, for the
due authorization, execution and delivery by the Trust or the Company of the
Operative Agreements or for the performance by the Trust or the Company of its
obligations under any of the Operative Agreements to which it is a party, except
such as has been already obtained or as may be required under the 1933 Act, the
1933 Act Regulations, the 1934 Act or the 1934 Act Regulations, or state
securities laws.
(xxi) The entry by the Company into the Purchase Contracts underlying
the Securities, the offer of the Securities as contemplated in the Underwriting
Agreement and the Prospectus, the issuance of the Shares and the sale of the
Shares by the Company pursuant to the Purchase Contracts; the execution,
delivery and performance by the Trust and the Company of each of the Operative
Agreements to which it is a party and any other agreement or instrument entered
into or issued or to be entered into or issued by the Trust or the Company, as
applicable, in connection with the transactions contemplated thereby or in the
Registration Statement and the Prospectus and the consummation of the
transactions contemplated in the Underwriting Agreement and in the Registration
Statement and the Prospectus (including the issuance and sale of the securities
and the use of proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use of Proceeds") and compliance by the Offerors
with their obligations thereunder do not and will not, whether with or without
the giving of notice or lapse of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined in Section 1(a)(xxiii) of
the Underwriting Agreement) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Trust, the
Company or any subsidiary of the Company pursuant to, any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument, known to us, to which the Trust, the Company or any
subsidiary of the Company is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Trust, the Company or any
subsidiary of the Company is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the Declaration or certificate of trust of the Trust or the charter or
by-laws or other constitutive documents of the Company or any subsidiary of the
Company, or, to our knowledge, any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Trust, the Company or
any subsidiary of the Company or any of their respective properties, assets or
operations.
(xxii) The Company and its subsidiaries own or possess Governmental
Licenses issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by them other
than those the absence of which would not have a Material Adverse Effect; the
Company and its subsidiaries are in compliance with the terms and
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<PAGE> 42
conditions of all such Governmental Licenses, except where the failure so to
comply would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a Material
Adverse Effect; and neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(xxiii) The Company and the Trust meet the requirements for the use of
Form S-3 under the 1933 Act.
(xxiv) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or threatened by the Commission.
(xxv) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information, if applicable, the Prospectus, excluding
the documents incorporated by reference therein, and each amendment or
supplement to the Registration Statement and Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective and issue
dates (other than the financial statements and supporting schedules and other
financial data included or incorporated by reference therein or omitted
therefrom and the Statements of Eligibility on Form T-1, as to which we express
no opinion) complied in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations; and the Declaration, the Indenture and the
Preferred Securities Guarantee Agreement complied in all material respects with
the requirements of the 1939 Act and the 1939 Act Regulations.
(xxvi) The provisions of the Pledge Agreement are effective to create in
favor of the Collateral Agent for the benefit of the Company a valid security
interest under the UCC in all "securities entitlements" (as defined in Section
8-102(a)(17) of the UCC and the Federal Book-Entry Regulations) now or hereafter
credited to the Collateral Account and relating to the Preferred Securities (the
"Pledged Securities Entitlements"); and the provisions of the Pledge Agreement
are effective under the UCC and the Federal Book-Entry Regulations to perfect
the security interest of the Collateral Agent for the benefit of the Company in
the Pledged Securities Entitlements.
(xxvii) The issuance and sale of the Securities do not violate the
Commodity Exchange Act or the regulations of the Commodity Futures Trading
Commission thereunder.
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(xxviii) The Income PRIDES issuable at Closing Time and the Shares
issuable by the Company pursuant to the Purchase Contracts have been authorized
for listing on the New York Stock Exchange, upon official notice of issuance.
(xxix) Neither the Trust nor the Company is, and upon the issuance and
sale of the securities as contemplated in the Underwriting Agreement and the
application of the act proceeds therefrom as described in the Prospectus will
not be, an "investment company" as such term is defined in the 1940 Act.
(xxx) The Company is presently exempt from the provisions of the Public
Utility Holding Company Act of 1935 (except Section 9(a)(2) thereof).
In addition, each of the general counsel and special counsel shall
opine as follows: we hereby confirm that nothing has come to our attention that
would lead us to believe that the Registration Statement or any amendment
thereto, including the Rule 430A Information (except for financial statements
and schedules and other financial data included or incorporated by reference
therein or omitted therefrom and the Statements of Eligibility on Form T-1, as
to which we make no statement), at the time such Registration Statement or any
such amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus
or any amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by reference therein
or omitted therefrom, as to which we make no statement), at the time the
Prospectus was issued, at the time any such amended or supplemented prospectus
was issued or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the State of New York,
the corporate laws of the State of Delaware or the federal laws of the United
States of America, to the extent such counsel deems proper and specified in such
opinion, upon the opinion of other counsel whom such counsel believes to be
reliable, provided that such counsel furnishes copies thereof to the
Underwriters and states that such opinion of such local counsel is satisfactory
in form and substance and the Underwriters and counsel for the Underwriters are
entitled to rely thereon, and (B) as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible
officers of the Company, its subsidiaries and public officials.
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EXHIBIT C
FORM OF OPINION OF COUNSEL TO THE TRUST
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act, and all filings required
under the laws of the State of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made.
(ii) Under the Delaware Act and the Declaration, the Trust has the trust
power and authority to own property and conduct its business, all as described
in the Prospectus.
(iii) Under the Delaware Act and the Declaration, the Trust has the trust
power and authority to (a) execute and deliver, and to perform its obligations
under, the Underwriting Agreement and the Pricing Agreement and (b) issue and
perform its obligations under the Preferred Securities and Common Securities.
(iv) Under the Delaware Act and the Declaration, the execution and delivery
by the Trust of the Underwriting Agreement and the Pricing Agreement, and the
performance by the Trust of its obligations thereunder, have been duly
authorized by all necessary trust action on the part of the Trust.
(v) The Declaration constitutes a valid and legally binding obligation of
the Company and the Trustees, and is enforceable against the Company and the
Trustees, in accordance with its terms.
(vi) The Preferred Securities have been duly authorized by the Declaration
and, when issued, executed, authenticated and delivered in accordance with the
terms of the Declaration against payment therefore as set forth in the
Underwriting Agreement, will be duly and validly issued and, subject to the
limitations set forth in this paragraph (vi) below, fully paid and
non-assessable undivided beneficial interests in the assets of the Trust,
entitled to the benefits of the Declaration, subject to the terms of the
Declaration. Each Preferred Security Holder, in such capacity, will be entitled
to the same limitation of personal liability as that extended to stockholders of
private corporations for profit organized under the General Corporation Law of
the State of Delaware, provided, however, that such counsel need express no
opinion with respect to the liability of any Preferred Security Holder who is,
was, or may become, a named trustee of the Trust. Such counsel may note,
however, that the Preferred Security Holders may be obligated, pursuant to the
Declaration, to (a) provide indemnity and/or security in connection with, and
pay taxes or governmental charges arising from transfers or exchanges of
Preferred Securities Certificates and the issuance of Preferred Securities
Certificates and (b) provide security and indemnity in connection with requests
of or directions to the Property Trustee to exercise its rights and remedies
under the Declaration.
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(vii) The Common Securities have been duly authorized by the Declaration,
when issued and delivered by the Trust to the Company in accordance with the
terms of the Declaration, will be duly and validly issued and fully paid
undivided beneficial interests in the assets of the Trust (subject to the terms
of the Declaration)
(viii) Under the Delaware Act and the Declaration, neither the issuance of
the Preferred Securities nor the Common Securities is not subject to preemptive
or other similar rights.
(ix) The issuance and sale by the Trust of the Preferred Securities and the
Common Securities, the purchase by the Trust of the Senior Notes, the execution,
delivery and performance by the Trust of the Underwriting Agreement, the
consummation by the Trust of the transactions contemplated by the Underwriting
Agreement and the compliance by the Trust with its obligations thereunder do not
violate (a) any of the provisions of the Certificate or the Declaration or (b)
any applicable Delaware law or Delaware administrative regulation.
(x) No filing or registration with, or authorization, approval, consent,
license, order, qualification or order of any Delaware court or Delaware
governmental authority or Delaware agency is required to be obtained by the
Trust solely in connection with the issuance and sale of the Preferred
Securities, the purchase by the Trust of the Senior Notes, the execution,
delivery and performance by the Trust of the Underwriting Agreement and the
Pricing Agreement, the consummation by the Trust of the transactions
contemplated in the Underwriting Agreement and the Pricing Agreement or the
compliance by the Trust with its obligations thereunder.
(xi) The Preferred Security Holders (other than those Preferred Security
Holders who reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely as a result
of their participation in the Trust, and the Trust will not be liable for any
income tax imposed by the State of Delaware.
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