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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 1, 1999
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CMS ENERGY CORPORATION
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(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
MICHIGAN 1-9513 38-2726431
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<S> <C> <C>
(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
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Fairlane Plaza South, Suite 1100, 330 Town Center
Drive, Dearborn, Michigan 48126
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (313) 436-9261
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N/A
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(Former name or former address, if changed since last report)
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
The following exhibits are filed with reference to the
Registration Statements on Form S-3 (Registration Nos.
333-68937, 333-68937-01 and 333-68937-02) of CMS Energy
Corporation, CMS Energy Trust II and CMS Energy Trust III:
1(c) Underwriting Agreement, dated as of July 1, 1999,
among CMS Energy Corporation, CMS Energy Trust II,
Salomon Smith Barney Inc., Donaldson, Lufkin &
Jenrette Securities Corporation and Banc of America
Securities LLC with respect to the Units.
4(h) Amended and Restated Declaration of Trust, dated as
of July 8, 1999, of CMS Energy Trust II.
4(m) Junior Subordinated Deferrable Interest Debenture,
dated July 8, 1999, of CMS Energy Corporation.
4(n) Form of Trust Preferred Security (included as
Exhibit A-1 to Exhibit 4(h)).
4(o) Trust Preferred Securities Guarantee Agreement,
dated as of July 8, 1999, between CMS Energy
Corporation and The Bank of New York.
4(t) Master Unit Agreement, dated as of July 8, 1999,
between CMS Energy Corporation and The Bank of New
York, as Unit Agent.
4(t)(1) Form of Normal Unit Certificate (included as
Exhibit A to Exhibit 4(t)).
4(t)(2) Form of Stripped Unit Certificate (included as
Exhibit B to Exhibit 4(t)).
4(u) Pledge Agreement, dated as of July 8, 1999, among
CMS Energy Corporation, The Bank of New York, as
Unit Agent, and The Chase Manhattan Bank, as
Collateral Agent.
4(v) Call Option Agreement, dated as of July 8, 1999,
between Donaldson, Lufkin & Jenrette Securities
Corporation, as Call Option Holder, and The Bank of
New York, as Unit Agent and Attorney-in-fact.
8 Opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, as to certain tax matters.
23 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 8 above).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
CMS ENERGY CORPORATION
Date: July 13, 1999 By: /s/ Alan M. Wright
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Name: Alan M. Wright
Title: Senior Vice President and
Chief Financial Officer
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INDEX TO EXHIBITS
Exhibit No. Description
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1(c) Underwriting Agreement, dated as of July 1, 1999, among CMS
Energy Corporation, CMS Energy Trust II, Salomon Smith Barney
Inc., Donaldson, Lufkin & Jenrette Securities Corporation and
Banc of America Securities LLC with respect to the Units.
4(h) Amended and Restated Declaration of Trust, dated as of July
8, 1999, of CMS Energy Trust II.
4(m) Junior Subordinated Deferrable Interest Debenture, dated
July 8, 1999, of CMS Energy Corporation.
4(n) Form of Trust Preferred Security (included as Exhibit A-1 to
Exhibit 4(h)).
4(o) Trust Preferred Securities Guarantee Agreement, dated as of
July 8, 1999, between CMS Energy Corporation and The Bank of
New York.
4(t) Master Unit Agreement, dated as of July 8, 1999, between CMS
Energy Corporation and The Bank of New York, as Unit Agent.
4(t)(1) Form of Normal Unit Certificate (included as Exhibit A to
Exhibit 4(t)).
4(t)(2) Form of Stripped Unit Certificate (included as Exhibit B to
Exhibit 4(t)).
4(u) Pledge Agreement, dated as of July 8, 1999, among CMS Energy
Corporation, The Bank of New York, as Unit Agent, and The
Chase Manhattan Bank, as Collateral Agent.
4(v) Call Option Agreement, dated as of July 8, 1999, between
Donaldson, Lufkin & Jenrette Securities Corporation, as Call
Option Holder, and The Bank of New York, as Unit Agent and
Attorney-in-fact.
8 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, as to
certain tax matters.
23 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included
in Exhibit 8 above)
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EXHIBIT 1(c)
CMS ENERGY CORPORATION
CMS ENERGY TRUST II
8.75% ADJUSTABLE CONVERTIBLE TRUST SECURITIES
(Stated Amount $41.50 per Unit)
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UNDERWRITING AGREEMENT
July 1, 1999
Salomon Smith Barney Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Banc of America Securities LLC
As Representatives of the several Underwriters
named in Schedule II hereto
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
CMS Energy Trust II, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), and CMS Energy Corporation, a
Michigan corporation, as sponsor of the Trust and as guarantor (the "Company"),
propose, subject to the terms and conditions stated herein, to issue and sell to
the Underwriters (as defined in Section 14 hereof) an aggregate of 7,250,000
8.75% Adjustable Convertible Trust Securities (the "Firm Units"), consisting of
(i) the right to purchase certain common stock of the Company and (ii) certain
preferred securities of the Trust that are subject to a call option, as
described below. The Underwriters have designated the representatives named in
Schedule I hereto (the "Representatives") to execute this Agreement on their
behalf and to act for them in the manner provided in this Agreement.
In connection herewith, the Company and the Underwriters
propose, subject to the terms and conditions stated herein, to enter into the
Purchase Contracts (the "Purchase Contracts"), underlying an aggregate of
7,250,000 Firm Units, pursuant to the Master Unit Agreement to be dated as of
July 8, 1999 (the"Master Unit Agreement"), between the Company and The Bank of
New York, as Master Unit Agent (the "Unit Agent").
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Further, the Trust and the Company propose that the Trust,
subject to the conditions stated herein, issue and sell to the Underwriters, an
aggregate of 7,250,000 Trust Preferred Securities (liquidation amount $41.50 per
preferred security) (the "Trust Preferred Securities") underlying the Firm
Units. The Trust Preferred Securities will represent undivided beneficial
interests in the assets of the Trust, guaranteed on a subordinated basis by the
Company as to the payment of distributions and as to payments on liquidation or
redemption, to the extent set forth in a guarantee agreement to be dated as of
July 8, 1999 (the "Guarantee") between the Company and The Bank of New York, as
trustee (the "Guarantee Trustee"). In connection therewith, the Trust is to
purchase, with the proceeds from the sale of its Trust Preferred Securities and
its Trust Common Securities (liquidation amount $41.50 per common security) (the
"Trust Common Securities"), 8.625% Subordinated Debentures due 2004 (the "Junior
Subordinated Debentures") of the Company, to be issued pursuant to an Indenture
dated as of June 1, 1997 (the "Base Indenture") between the Company and The Bank
of New York, as trustee (the "Debenture Trustee"), as supplemented by the Term
Resolution of the Company (the "Term Resolution", and together with the Base
Indenture, the "Indenture"), dated as of July 1, 1999, relating to the issuance
of the Junior Subordinated Debentures. The Company will be the holder of 100% of
the Trust Common Securities. The Trust will be subject to the terms of an
Amended and Restated Declaration of Trust (the "Trust Agreement"), among the
Company and the trustees of the Trust (the "CMS Trustees"), including The Bank
of New York, as property trustee (the "Property Trustee"). The Trust Agreement,
the Indenture and the Guarantee will be qualified under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act").
Further, the Underwriters will, on behalf of the initial
holders of the Units, sell Call Options (the "Call Options") to Donaldson,
Lufkin & Jenrette Securities Corporation (in its capacity as the holder of the
Call Options, the "Call Option Holder") pursuant to the Call Option Agreement
dated as of July 8, 1999 between the Call Option Holder and the Unit Agent (the
"Call Option Agreement") relating to the Trust Preferred Securities. The Call
Option Agreement will entitle the Call Option Holder to acquire the Trust
Preferred Securities (or Junior Subordinated Debentures substituted therefor),
on or before the Call Option Expiration Date (as defined in the Call Option
Agreement), in exchange for the Aggregate Call Option Exercise Consideration (as
defined in the Call Option Agreement).
In connection with the Master Unit Agreement and the Call
Options, and pursuant to the Pledge Agreement, to be dated as of July 8, 1999
(the "Pledge Agreement"), among the Company, the Unit Agent, the Call Option
Holder and Chase Manhattan Bank, as collateral agent (the "Collateral Agent"),
the Trust Preferred Securities and any substituted securities will be pledged
(the "Pledged Securities") by the Unit Agent, on behalf of the holders of the
Units (the "Holders"), to secure the Holders' obligations to the Company and the
Call Option Holder under the Purchase Contract and Call Option, respectively.
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In addition, subject to the terms and conditions herein, the
Company proposes to grant the Underwriters an option to enter into 1,087,500
additional Purchase Contracts and the Trust and the Company propose to grant the
Underwriters an option to purchase up to 1,087,500 additional Trust Preferred
Securities, and, in the event the Underwriters enter into any such additional
Purchase Contracts, the Underwriters propose to purchase a number of additional
Trust Preferred Securities equal to such number of additional Purchase
Contracts, pledge such Trust Preferred Securities to the Collateral Agent and
sell Call Options relating to such Trust Preferred Securities to the Call Option
Holder (the Units resulting therefrom being the "Optional Units"). The Firm
Units and any Optional Units purchased by the Underwriters are herein called the
"Units".
The rights to purchase newly issued shares of common stock,
$0.01 par value per share, of the Company (the "Common Stock") to be issued upon
the settlement of the Purchase Contracts (the "Purchase Contract Shares"),
together with the Trust Preferred Securities or other Pledged Securities and
subject to (a) the obligations owed to the Company under the Purchase Contract,
(b) the obligations owed to the Call Option Holder under the Call Option and (c)
the pledge arrangements under the Pledge Agreement that secures the foregoing
obligations, collectively constitute a Unit.
1. Representations and Warranties of the Company and the Trust. Each of
the Trust and the Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-3, as amended
(Registration Nos. 333- 68937 and 333-68937-01) (the "Initial
Registration Statement") in respect of the Units, including the
Purchase Contracts, the Purchase Contract Shares, the Trust Preferred
Securities, the Junior Subordinated Debentures, the Guarantee and the
Call Options, has been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration Statement and
any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to the Representatives and, excluding
exhibits to such registration statement, but including all documents
incorporated by reference in the prospectus included therein, to the
Representatives for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed, or transmitted for filing, with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Act each in the form heretofore delivered
to the Representatives and Current Reports on Form 8-K dated June 29
and June 30, 1999); no stop order suspending the effectiveness of the
Initial Registration Statement is in effect and no proceedings for such
purposes are pending before or, to the knowledge of the Company,
threatened by the Commission (any preliminary prospectus included in
such registration statement or filed with the Commission pursuant to
Rule 424(a) under the Act, is hereinafter called a "Preliminary
Prospectus"); the various parts of the Initial Registration Statement
and the Rule 462(b) Registration Statement, if any, including all
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exhibits thereto and the documents incorporated by reference in the
prospectus contained in the Initial Registration Statement at the time
such part of the registration statement became effective or such part
of the Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, each as amended at the time such part of the
registration statement became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus relating to the
Units, in the form in which it has most recently been filed, or
transmitted for filing, with the Commission on or prior to the date of
this Agreement, is hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein
pursuant to the applicable form under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the
case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended
or supplemented in relation to the Securities in the form in which it
is filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 4(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, 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; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by or through the
Representatives on behalf of any Underwriter expressly for use in the
Prospectus as amended or supplemented relating to the Units or to any
statements in or omissions from that part of the Registration Statement
that shall constitute the Statements of Eligibility and Qualification
under the Trust Indenture Act of the Debenture Trustee, the Guarantee
Trustee and the Property Trustee;
(c) The documents incorporated by reference in the
Registration Statement and the Prospectus, when they were filed (or, if
an amendment with respect to any such document was filed, when such
amendment was filed) with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the
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Commission promulgated thereunder, and any further documents so filed
and incorporated by reference will, when they are filed with the
Commission, conform in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission
promulgated thereunder; none of such documents, when filed (or, if an
amendment with respect to any such document was filed, when such
amendment was filed), 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, in light of the circumstances
under which they were made, not misleading; and no such further
document, when it is filed, will contain an untrue statement of a
material fact or will omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading;
(d) There has not been any material and adverse change in the
business, properties or financial condition of the Company and its
Subsidiaries (as defined in Rule 405 under the Act, and hereinafter
called the "Subsidiaries"), taken as a whole, from that set forth in
the Registration Statement and the Prospectus (other than changes
referred to in or contemplated by the Registration Statement or the
Prospectus);
(e) 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 all requisite authority to own or lease its
properties and conduct its business as described in the Prospectus and
to consummate the transactions contemplated hereby, and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business as described in the
Prospectus or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole; each significant
subsidiary (as defined in Rule 405 under the Act, and hereinafter
called a "Significant Subsidiary") of the Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has all
requisite authority to own or lease its properties and conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business as described in the Prospectus or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole; and the Company has the requisite power
and authority to authorize the offering of the Junior Subordinated
Debentures and the Purchase Contract Shares, to exercise, deliver and
perform the Purchase Contracts, the Master Unit Agreement, the Pledge
Agreement, the Guarantee, the Indenture, the Trust Agreement and this
Agreement, and to issue, sell and deliver the Junior Subordinated
Debentures and the Purchase Contract Shares;
(f) The shares of Common Stock of the Company issued and
outstanding prior to the issuance and sale of the Units have been duly
authorized and are validly issued, fully paid and non-assessable; the
Purchase Contract Shares to be issued and sold by the Company
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pursuant to the Purchase Contracts and the Master Unit Agreement have
been duly authorized and reserved for issuance and, when issued and
delivered against payment therefor as provided in the Purchase
Contracts and the Master Unit Agreement, will be validly issued, fully
paid and non-assessable and conform to the description of Common Stock
in the Prospectus;
(g) The Trust Preferred Securities underlying the Units have
been duly and validly authorized by the Trust, and, when the Trust
Preferred Securities are issued and delivered, such Trust Preferred
Securities will be validly issued, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust; the Trust
Preferred Securities will conform in all material respects to the
description thereof contained in the Prospectus; the issuance of the
Trust Preferred Securities is not subject to any preemptive or other
similar rights; the Trust Preferred Securities will have the rights set
forth in the Trust Agreement, and the terms of the Trust Preferred
Securities are valid and binding on the Trust;
(h) The Trust Common Securities have been duly and validly
authorized by the Trust and upon delivery by the Trust to the Company
against payment therefor as described in the Prospectus, will be duly
and validly issued undivided beneficial interests in the assets of the
Trust and will conform in all material respects to the description
thereof contained in the Prospectus; the issuance of the Trust Common
Securities is not subject to preemptive or other similar rights; at
each Time of Delivery (as defined in Section 3 hereof), all of the
issued and outstanding Trust Common Securities will be directly owned
by the Company free and clear of any security interest, mortgage,
pledge, claim, lien or encumbrance (each, a "Lien"); and the Trust
Common Securities and the Trust Preferred Securities are the only
interests authorized to be issued by the Trust;
(i) Except for the outstanding shares of preferred stock of
Consumers Energy Company, the 8.36% Trust Originated Preferred
Securities of Consumers Power Company Financing I, the 8.20% Trust
Originated Preferred Securities of Consumers Energy Financing II and
the 7.75% Convertible Quarterly Income Preferred Securities of CMS
Energy Trust I, all of the outstanding capital stock of each of
Consumers Energy Company and CMS Enterprises Company is owned directly
or indirectly by the Company, free and clear of any Lien, and there are
no outstanding rights (including, without limitation, preemptive
rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other equity
interest in any of Consumers Energy Company and CMS Enterprises Company
or any contract, commitment, agreement, understanding or arrangement of
any kind relating to the issuance of any such capital stock, any such
convertible or exchangeable securities or any such rights, warrants or
options;
(j) The capital stock of the Company, including the Common
Stock, conforms in all material respects to the description thereof in
the Prospectus;
(k) Each of the Company and its Significant Subsidiaries has
all necessary consents, authorizations, approvals, orders, certificates
and permits of and from, and has
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made all declarations and filings with, all federal, state, local and
other governmental authorities, all self-regulatory organizations and
all courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure to
obtain or file would not have a material adverse effect on the Company
and its Subsidiaries, taken as a whole;
(l) No order, license, consent, authorization or approval of,
or exemption by, or the giving of notice to, or the registration with
any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, and no filing,
recording, publication or registration in any public office or any
other place, was or is now required to be obtained by the Company to
authorize its execution or delivery of, or the performance of its
obligations under, this Agreement, except such as have been obtained or
may be required under state securities or Blue Sky laws or as referred
to in the Prospectus in connection with the purchase and distribution
of the Units, the Purchase Contracts, the Master Unit Agreement, the
Pledge Agreement, the Guarantee, the Trust Agreement and the Indenture,
or to issue, sell and deliver the Junior Subordinated Debentures and
the Purchase Contract Shares;
(m) No order, license, consent, authorization or approval of,
or exemption by, or the giving of notice to, or the registration with
any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, and no filing,
recording, publication or registration in any public office or any
other place, was or is now required to be obtained by the Trust to
authorize its execution or delivery of, or the performance of its
obligations under, this Agreement, except such as have been obtained or
may be required under state securities or Blue Sky laws or as referred
to in the Prospectus in connection with the purchase and distribution
of the Units, and the Trust Agreement, or to issue, sell and deliver
the Trust Preferred Securities and the Trust Common Securities;
(n) The execution and delivery of this Agreement by the Trust,
the compliance by the Trust with all of the provisions of this
Agreement, the issuance and sale of the Trust Preferred Securities and
the Trust Common Securities by the Trust, the purchase of the Junior
Subordinated Debentures by the Trust, the distribution of the Junior
Subordinated Debentures by the Trust in the circumstances contemplated
by the Trust Agreement, the performance of this Agreement and the Trust
Agreement, and the consummation of each of the transactions
contemplated thereby did not and will not conflict with, result in a
breach of any of the terms or provisions of, or constitute a default or
require the consent of any party under the Trust Agreement, any
material terms or provisions of any material agreement or instrument to
which the Trust is a party, any existing material applicable law, rule
or regulation or any judgment, order or decree of any governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the Trust or any of its properties or assets, or did or will result in
the creation or imposition of any Lien on the Company's properties or
assets;
(o) The execution and delivery of this Agreement by the
Company, the compliance by the Company with all of the provisions of
this Agreement, the entry into the Purchase
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Contracts by the Company, the issuance and sale of the Trust Preferred
Securities and the Trust Common Securities by the Trust, the sale of
the Junior Subordinated Debentures by the Company to the Trust, the
distribution of the Junior Subordinated Debentures by the Trust in the
circumstances contemplated by the Trust Agreement, the issuance and
sale by the Company of the Purchase Contract Shares, the execution,
delivery and performance of this Agreement, the Purchase Contracts, the
Master Unit Agreement, the Pledge Agreement, the Guarantee, the Trust
Agreement and the Indenture, and the consummation of each of the
transactions contemplated thereby, did not and will not conflict with,
result in a breach of any of the terms or provisions of, or constitute
a default or require the consent of any party under the Company's
Articles of Incorporation or by-laws, any material terms or provisions
of any material agreement or instrument to which the Company is a
party, any existing material applicable law, rule or regulation or any
judgment, order or decree of any governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties or assets, or did or will result in the creation or
imposition of any Lien on the Company's properties or assets;
(p) Except as disclosed in the Prospectus, there is no action,
suit, proceeding, inquiry or investigation (at law or in equity or
otherwise) pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary by any governmental authority
that (i) questions the validity, enforceability or performance of this
Agreement or the Units or (ii) if determined adversely, is likely to
have a material adverse effect on the business or financial condition
of the Company and its Subsidiaries, taken as a whole, or materially
adversely affect the ability of the Company to perform its obligations
hereunder or the consummation of the transactions contemplated by this
Agreement;
(q) Except as set forth in the Prospectus, no event or
condition exists that constitutes, or with the giving of notice or
lapse of time or both would constitute, a default or any breach or
failure to perform by the Company or any of its Significant
Subsidiaries in any material respect under any indenture, mortgage,
loan agreement, lease or other material agreement or instrument to
which the Company or any of its Significant Subsidiaries is a party or
by which it or any of its Significant Subsidiaries, or any of their
respective properties, may be bound;
(r) Neither the Company, the Trust nor any of the Subsidiaries
is, after giving effect to the offering and sale of the Units, will be
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended (the "Investment Company Act"). The Trust is
not required to be registered under the Investment Company Act;
(s) The Units have been approved for listing on the New York
Stock Exchange, subject to notice of issuance;
(t) The Trust has been duly created and is validly existing as
a statutory business trust in good standing under the Business Trust
Act of the State of Delaware (the "Delaware Business Trust Act") with
the trust power and authority to own property and conduct its
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business as described in the Prospectus, and has conducted and will
conduct no business other than the transactions contemplated by this
Agreement and described in the Prospectus; the Trust is not a party to
or bound by any agreement or instrument other than this Agreement, the
Trust Agreement between the Company and the CMS Trustees named therein
and the agreements and instruments contemplated by the Trust Agreement
and described in the Prospectus; based on expected operations and
current law, the Trust is not and will not be classified as an
association taxable as a corporation for United States federal income
tax purposes; and, to the knowledge of each of the Company and the
Trust, the Trust is not a party to or subject to any action, suit or
proceeding of any nature;
(u) This Agreement has been duly authorized, executed and
delivered by the Company and the Trust and constitutes a valid and
binding obligation of each of the Company and the Trust, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally or by general principles of equity
(regardless of whether enforcement is considered in a proceeding at law
or in equity);
(v) The Purchase Contracts underlying the Units have been duly
authorized and when validly executed and delivered by the Company and
the other parties thereto pursuant to this Agreement and the Master
Unit Agreement, will constitute valid and binding obligations of the
Company, enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is considered
in a proceeding at law or in equity); and the Purchase Contracts will
conform to the descriptions thereof in the Prospectus;
(w) The Master Unit Agreement and the Pledge Agreement, have
each been duly authorized by the Company and, when executed and
delivered by the Company and the other parties thereto, will constitute
valid and binding obligations, enforceable in accordance with their
respective terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally or by general principles of equity
(regardless of whether enforcement is considered in a proceeding at law
or in equity); the Master Unit Agreement and the Pledge Agreement
conform or will conform to the descriptions thereof in the Prospectus;
and the Pledge Agreement creates, as collateral security, for the
performance when due, by the Holders, of the respective obligations
created under the Purchase Contracts and Call Options, a legal, valid
and perfected security interest (as that term is defined in the Uniform
Commercial Code, as adopted and in effect in the State of New York), in
favor of the Collateral Agent, in the right, title and interest of such
Holders in the Pledged Securities that constitute a part of the Units;
(x) The Guarantee, the Junior Subordinated Debentures, the
Trust Agreement and the Indenture have each been duly authorized and
when validly executed and delivered by the Company and, in the case of
the Guarantee, by the Guarantee Trustee and, in the case of the Trust
Agreement, by the CMS Trustees and, in the case of the Indenture, by
the Debenture
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<PAGE> 10
Trustee, and, in the case of the Junior Subordinated Debentures, when
validly authenticated and delivered by the Debenture Trustee and, in
the case of the Guarantee, upon due execution, authentication and
delivery of the Junior Subordinated Debentures and upon payment
therefor, will constitute valid and binding obligations of the Company,
enforceable in accordance with their respective terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is considered
in a proceeding at law or in equity); the Junior Subordinated
Debentures are entitled to the benefits of the Indenture; the Trust
Agreement, the Indenture and the Guarantee have been duly qualified
under the Trust Indenture Act;
(y) Each of the Trust Agreement, the Guarantee, the Indenture
and the Junior Subordinated Debentures will conform in all material
respects to the description thereof contained in the Prospectus.
2. Sale of Units.
(a) Subject to the terms and conditions set forth herein:
(i) the Company and each of the Underwriters,
severally and not jointly, agree to enter into the Purchase
Contracts underlying the number of Firm Units set forth
opposite the name of such Underwriter in Schedule II hereto,
(ii) the Company and the Trust agree that the Trust
will sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase
from the Trust, at a purchase price of $41.50 per Trust
Preferred Security, the number of Trust Preferred Securities
underlying the number of Firm Units set forth opposite the
name of such Underwriter in Schedule II hereto, and
(iii) in the event and to the extent that the
Underwriters shall exercise the election to enter into
additional Purchase Contracts underlying Optional Units as
provided in sub-section (b) below,
(1) the Company and each of the
Underwriters, severally and not jointly, agree to
enter into that number of additional Purchase
Contracts as to which such election shall have been
exercised (to be adjusted by you so as to eliminate
fractional Purchase Contracts) determined by
multiplying such number of additional Purchase
Contracts by a fraction, the numerator of which is
the maximum number of Optional Units set forth
opposite the name of such Underwriter in Schedule II
hereto and the denominator of which is the maximum
number of Optional Units set forth in total opposite
the names of all such Underwriters in Schedule II
hereto, and
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<PAGE> 11
(2) the Company and the Trust agree that the
Trust will sell to each of the Underwriters and each
of the Underwriters agrees, severally and not
jointly, to purchase from the Trust at the purchase
price set forth in clause (a) of this Section 2, a
number of Trust Preferred Securities equal to such
number of additional Purchase Contracts.
(b) The Company hereby grants to the Underwriters the right to
enter into at their election up to 1,087,500 Purchase Contracts
underlying Optional Units and the Company and the Trust hereby grant
the Underwriters the right to purchase from the Trust at their election
up to 1,087,500 Trust Preferred Securities, for the sole purpose of
covering overallotments in the sale of the Firm Units. Any such
election to enter into such additional Purchase Contracts and purchase
such Trust Preferred Securities may be exercised only by written notice
from you to the Company and the Trust, given within a period of 30
calendar days after the date of this Agreement and setting forth the
aggregate number of such additional Purchase Contracts to be entered
into and Trust Preferred Securities to be purchased (which shall be an
identical number) and the date on which the related Optional Units are
to be delivered, as determined by you but in no event earlier than the
First Time of Delivery (as defined in Section 4 hereof) or, unless you
and the Company otherwise agree in writing, earlier than two or later
than ten business days after the date of such notice.
(c) The Underwriters agree to pledge to the Collateral Agent,
on behalf of the initial purchasers of the Units, the Trust Preferred
Securities underlying the Firm Units and the Optional Units with
respect to which the Company and the Underwriters have entered into
Purchase Contracts. Such pledge shall be effected by the delivery by
the Underwriters to the Collateral Agent in New York of the Trust
Preferred Securities to be pledged at the appropriate Time of Delivery
(as defined below) in accordance with the Pledge Agreement.
(d) The Underwriters further agree to sell, on behalf of the
initial purchasers of the Units, to the Call Option Holder a Call
Option with respect to each Trust Preferred Security purchased at a
purchase price of $0.0415 per Call Option at the appropriate Time of
Delivery.
(e) Unless the context otherwise requires, for purposes of
this Agreement, the act of entering into a Purchase Contract,
purchasing a Trust Preferred Security and selling a Call Option with
respect to such Trust Preferred Security shall be referred to as the
"purchase" of a Unit.
3. Delivery of Units.
(a) The Units to be purchased by each Underwriter shall be
delivered by or on behalf of the Company to such Underwriter, through
the facilities of the Depository Trust Company ("DTC"), for the account
of such Underwriter, against (i) payment by or on behalf of such
Underwriter of the purchase price therefor by certified or official
bank check or checks, payable to the order of, or by wire transfer to
the account designated by, the
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<PAGE> 12
Company in federal or other immediately available funds and (ii)
delivery to the Collateral Agent of the Trust Preferred Securities
relating to such Units. The Company will cause the certificates
representing the Units to be made available for checking and packaging
at least twenty-four hours prior to the Time of Delivery (as defined
below) at the office of DTC or its designated custodian (the
"Designated Office"). The Units to be purchased by each Underwriter
hereunder will be represented by one or more definitive global Units in
book-entry form which will be deposited by or on behalf of the Company
with the DTC or its designated custodian. The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on July 8,
1999 or such other time and date as the Underwriters, the Trust and the
Company may agree upon in writing, and, with respect to the Optional
Units, 9:30 a.m., New York City time, on the date specified by the
Representatives in the written notice given by the Representatives of
the Underwriters' election to purchase such Optional Units, or such
other time and date as the Representatives and the Company may agree
upon in writing. Such time and date for delivery of the Firm Units is
herein called the "First Time of Delivery," such time and date for
delivery of the Optional Units, if not the First Time of Delivery, is
herein called the "Second Time of Delivery," and each such time and
date for delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 6 hereof,
including the cross-receipt for the Units, will be delivered at such
time and date at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP, 919 Third Avenue, New York, New York 10022 (the "Closing
Location"), and the Units will be delivered at the Designated Office,
all at each Time of Delivery. A meeting will be held at the Closing
Location prior to each Time of Delivery, at which meeting the final
drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the
purposes of this Agreement, "New York Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
4. Covenants of the Trust and the Company. The Trust and the Company,
jointly and severally, agree with each of the Representatives and each of the
Underwriters:
(a) To prepare the Prospectus as amended and supplemented in
relation to the Units in a form approved by the Representatives and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 424(b); prior
to each Time of Delivery, to make no further amendment or any
supplement to the Registration Statement or Prospectus as amended or
supplemented unless the Company has furnished the Representatives and
their counsel with a copy, for their review and comment, a reasonable
time prior to filing and has reasonably considered any comments of the
Representatives, and to make no such amendment or supplement to which
such counsel shall reasonably object on legal grounds in writing, after
consultation with the Representatives; to timely file all reports and
any definitive proxy or
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<PAGE> 13
information statements required to be filed by the Trust or the Company
with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Units, and
during such same period to advise the Representatives, promptly after
it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
with the Commission, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
prospectus relating to the Units, of the suspension of the
qualification of the Units for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order
or of any such order preventing or suspending the use of any prospectus
relating to the Units or suspending any such qualification, promptly to
use its best efforts to obtain the withdrawal of such order;
(b) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time during the period of time (not exceeding nine months) after the
date of the Prospectus when a Prospectus is required to be delivered
under the Act to furnish the Representatives in New York City with
copies of the Prospectus as amended or supplemented in such quantities
as the Representatives may reasonably request, and, if the delivery of
a prospectus is required at any time after the expiration of nine
months in connection with the offering or sale of the Units, and if at
such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus
or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to prepare and file such
document and to furnish without charge as many copies as the
Representatives may reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance;
(c) If the Company and the Trust elect to rely upon Rule
462(b), the Company and the Trust shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) by 10:00
p.m., Washington, D.C. time, on the date of this Agreement, and the
Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act;
(d) To make generally available to the Company's
securityholders, as soon as practicable but in any event not later than
eighteen months after the effective date of the Registration Statement,
an "earning statement" (which need not be audited by independent public
accountants) covering a twelve-month period commencing after the
effective date of
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<PAGE> 14
the Registration Statement and ending not later than 15 months
thereafter, which shall comply in all material respects with the
provisions of Section 11(a) of the Act and Rule 158 under the Act);
(e) To use its best efforts to qualify the Units for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may reasonably request, to comply with such laws so as
to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Units, and to pay (or cause to be paid), or
reimburse (or cause to be reimbursed) the Representatives and their
counsel for, reasonable filing fees and expenses in connection
therewith (including the reasonable fees and disbursements of counsel
to the Representatives and filing fees and expenses paid and incurred
prior to the date hereof), provided, however, that the Company shall
not be required to qualify to do business as a foreign corporation or
as a securities dealer or to file a general consent to service of
process or to file annual reports or to comply with any other
requirements deemed by the Company to be unduly burdensome;
(f) During the period beginning from the date hereof and
continuing for a period of 60 days after the issuance of the Units, not
to offer, sell, contract to sell or otherwise dispose of any Units,
Trust Preferred Securities or Common Stock or any other securities of
the Company which are substantially similar to the Units, including any
guarantee of such securities, or any securities convertible into or
exchangeable for or representing the right to receive any of the
foregoing securities, other than shares of Common Stock issuable upon
conversion of the Units or pursuant to the Company's Stock Purchase
Plan, Performance Incentive Stock Plan, Employee Stock Ownership Plan
and Employee Savings and Incentive Plan, without the prior written
consent of the Representatives;
(g) To use the net proceeds received by it from the sale of
the Units, pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds"; and
(h) To use its best efforts to list, subject to notice of
issuance, the Units on the New York Stock Exchange.
5. Expenses. The Company covenants and agrees with the several
Representatives and the several Underwriters that the Company will pay or cause
to be paid the following: (i) the fees, disbursements and expenses of the
Trust's and the Company's counsel and accountants in connection with the
registration of the Units under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof to the dealers and the
Underwriters; (ii) the cost of any delivery to the Underwriters of any Blue Sky
Memorandum; (iii) all expenses in connection with the qualification of the Units
for offering and sale under state securities laws as provided in Section 4(e)
hereof, including the fees and disbursements of counsel for the Representatives
in connection with such qualification and in connection with the
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<PAGE> 15
Blue Sky survey(s) up to an aggregate amount not to exceed $5,000; (iv) any fees
charged by securities rating services for rating the Units, the Trust Preferred
Securities and the Junior Subordinated Debentures; (v) the cost of preparing the
certificates for the Units, the Trust Preferred Securities, the Junior
Subordinated Debentures, the Trust Common Securities and any Purchase Contract
Shares; (vi) the fees and expenses of the CMS Trustees, the Debenture Trustee
and the Guarantee Trustee and any other agent thereof and the fees and
disbursements of their counsel (it being understood that as among the Company
and the Trust and such trustees, such fees and expenses shall not exceed
$5,000); (vii) the cost and charges of any transfer agent or registrar or
dividend disbursing agent; (viii) the fees and expenses of the Unit Agent,
Collateral Agent and Debenture Trustee and any agent of the Unit Agent,
Collateral Agent and Debenture Trustee and the fees and disbursements of any
counsel for the Unit Agent, Collateral Agent or Trustee in connection with the
Master Unit Agreement, the Pledge Agreement, the Call Option Agreement, the
Indenture and the Junior Subordinated Debentures, as the case may be and (ix)
all other reasonable costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Section 8 hereof, the Representatives and the Underwriters will pay all of
their own costs and expenses, including, without limitation, the fees of their
counsel.
6. Conditions on the Obligations of the Underwriters. The obligations
of the Underwriters shall be subject to the condition that all representations
and warranties and other statements of the Trust and the Company herein are, at
and as of such Time of Delivery, true and correct, the condition that the Trust
and the Company shall have performed all of their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
the Securities shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance
with Section 4(a) hereof; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden Arps"),
counsel for the Underwriters, shall have furnished to the
Representatives such written opinion or opinions, dated the appropriate
Time of Delivery, with respect to the formation of the Trust, insofar
as the federal laws of the United States and the laws of the State of
New York or the General Corporation Law of the State of Delaware or the
Delaware Business Trust Act are concerned, the validity of the Units,
the Trust Preferred Securities, the Junior Subordinated Debentures, the
Guarantee and the Prospectus, as well as such other related matters as
the Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
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<PAGE> 16
(c) Michael D. Van Hemert, Assistant General Counsel to the
Company, shall have furnished to the Representatives his written
opinion or opinions, dated such Time of Delivery, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company is a duly organized and validly
existing corporation in good standing under the laws of
Michigan, with power and authority (corporate and other) to
own its properties and conduct its business as described in
the Prospectus, as amended and supplemented;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus, as amended or supplemented, and
all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid
and non-assessable;
(iii) The Purchase Contract Shares to be issued and
sold by the Company pursuant to the Purchase Contracts and the
Master Unit Agreement have been duly authorized and reserved
for issuance and, when issued and delivered against payment
therefor as provided in the Purchase Contracts and the Master
Unit Agreement, will be duly and validly issued, fully paid
and non-assessable and will conform to the description of the
Common Stock in the Prospectus;
(iv) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or
any of its Subsidiaries is a party or of which any property of
the Company or any of its Subsidiaries is the subject which,
if determined adversely to the Company or any of its
Subsidiaries, would in the aggregate have a material adverse
effect on the current or future consolidated financial
position, securityholders' equity or results of operations of
the Company and its Subsidiaries; and to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(v) This Agreement has been duly authorized, executed
and delivered by the Company;
(vi) To the best knowledge of such counsel, there are
no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments or sale or Liens
related to or entitling any person to purchase or otherwise to
acquire any shares of the capital stock of, or other ownership
interest in, any Significant Subsidiary;
(vii) The issuance and sale of the Units being
delivered at such Time of Delivery, the entry by the Company
into the Purchase Contracts, the compliance by the Company
with all the provisions of this Agreement, the issuance and
sale of the
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<PAGE> 17
Trust Preferred Securities and the Trust Common Securities by
the Trust, the sale of the Junior Subordinated Debentures by
the Company to the Trust, the issuance by the Company of the
Purchase Contract Shares pursuant to the Purchase Contracts
and the Master Unit Agreement, the distribution of the Junior
Subordinated Debentures by the Trust in the circumstances
contemplated by the Trust Agreement and the execution,
delivery and performance of this Agreement, the Purchase
Contracts, the Master Unit Agreements, the Pledge Agreements,
the Guarantee, the Trust Agreement and the Indenture and the
consummation of each of the transactions contemplated thereby,
will not conflict with or result in a breach or violation of
any of the material terms or provisions of, or constitute a
default under, any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known
to such counsel to which the Company or any of its
Subsidiaries is a party or by which the Company is bound or to
which any of the property or assets of the Company or any of
its Subsidiaries is subject (except for such breaches or
violations or defaults that would not have a material adverse
effect on the business, property or financial condition of the
Trust or of the Company and its Subsidiaries, taken as a
whole), nor will such action result in any violation of the
provisions of the Articles of Incorporation or by-laws of the
Company or any statute or any currently existing order, rule
or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of its properties
(other than the securities or Blue Sky laws of the various
states, as to which such counsel need express no opinion);
(viii) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issuance and
sale of the Units or the consummation by the Company of the
transactions contemplated herein, except such as have been
obtained under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws (as to which
such counsel need express no opinion) in connection with the
purchase and distribution of the Units;
(ix) Neither the Company nor any of its Significant
Subsidiaries is in violation of its respective charters or
bylaws or in default in the performance or observance of any
material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it
is a party or by which it or any of its properties may be
bound, except for such violations or defaults the existence of
which would not have a material adverse effect on the Company
and its Subsidiaries, taken as a whole;
(x) The statements made in the Prospectus under the
captions "Description of the Units," "Description of the
Purchase Contracts," "Description of the Call Options,"
"Pledged Securities and Pledge Agreement," "Certain Provisions
of Principal Agreements," "Description of the Trust Preferred
Securities," "Description of the Guarantee," "Description of
the Junior Subordinated Debentures," and
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<PAGE> 18
"Relationship Among the Preferred Securities, the Debenture
and the Guarantee," insofar as such statements constitute
summaries of legal matters or documents referred to therein,
are accurate in all material respects; the Units, the Trust
Preferred Securities, the Junior Subordinated Debentures, the
Guarantee, the Trust Agreement, the Indenture and the Trust
Common Securities conform as to legal matters to the
description thereof and to the statements in regard thereto
contained in the Registration Statement and the Prospectus as
amended or supplemented;
(xi) The Company is not an "investment company"
within the meaning of the Investment Company Act. The Trust is
not required to be registered under the Investment Company
Act;
(xii) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the
operating statistics, financial statements, notes, auditors'
reports and related schedules therein, and any other financial
or statistical data included or incorporated by reference
therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder; and they have no reason to believe that any of
such documents, when they became effective or were so filed,
as the case may be, contained, in the case of a registration
statement which became effective under the Act, 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, in the case of other
documents which were filed under the Act or the Exchange Act
with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made when such documents were so filed,
not misleading;
(xiii) The Registration Statement and the Prospectus
as amended or supplemented, and any further amendments and
supplements thereto made by the Company prior to such Time of
Delivery (other than the operating statistics, financial
statements, notes, auditors' reports and related schedules and
any other financial or statistical data included or
incorporated by reference therein, as to which such counsel
need express no opinion), comply as to form in all material
respects with the requirements of the Act and the Trust
Indenture Act and the rules and regulations thereunder;
although he does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus, except for
those referred to in the opinion in subsection (ix) of this
Section 6(c), he has no reason to believe that, as of its
effective date, the Registration Statement or any further
amendment thereto made by the Company prior to such Time of
Delivery (other than the operating statistics, financial
statements, notes, auditors' reports and related schedules and
any other financial or statistical data
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<PAGE> 19
included or incorporated by reference therein, as to which
such counsel need express no opinion) 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, as of its date, the
Prospectus as amended or supplemented or any further amendment
or supplement thereto made by the Company prior to such Time
of Delivery (other than the operating statistics, financial
statements, notes, auditors' reports and related schedules and
any other financial or statistical data included or
incorporated by reference therein, as to which such counsel
need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading or that, as of such
Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented or any further amendment
or supplement thereto made by the Company prior to such Time
of Delivery (other than the operating statistics, financial
statements, notes, auditors' reports and related schedules and
any other financial or statistical data included or
incorporated by reference therein, as to which such counsel
need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; and he does not
know of any amendment to the Registration Statement required
to be filed or any contracts or other documents of a character
required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus as amended or supplemented or required to be
described in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or incorporated by
reference or described as required;
(xiv) The Indenture has been duly authorized,
executed and delivered by the Company and constitutes a valid
and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent
that (a) enforcement thereof may be limited by (i) bankruptcy,
insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law) and (b) the waiver of usury
contained in Section 5.13 of the Base Indenture may be
unenforceable;
(xv) The Junior Subordinated Debentures have been
duly authorized for issuance by the Company and, when
authenticated by the Debenture Trustee in accordance with the
terms of the Indenture, will be validly issued by the Company
and will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their
terms, except to the extent that (a) enforcement thereof may
be limited by (i) bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or
hereafter in effect relating
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<PAGE> 20
to creditors' rights generally and (ii) general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law) and (b) the waiver of usury
contained in Section 5.13 of the Base Indenture may be
unenforceable;
(xvi) The Trust Agreement has been duly authorized,
executed and delivered by the Company, and constitutes a valid
and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent
that enforcement thereof may be limited by (a) bankruptcy,
insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally and (b) general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law);
(xvii) The Guarantee has been duly authorized,
executed and delivered by the Company, and constitutes a valid
and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent
that enforcement thereof may be limited by (i) bankruptcy,
insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law);
(xviii) Each of the Master Unit Agreement, the
Purchase Contracts being delivered at such Time of Delivery
and the Pledge Agreement has been duly authorized, executed
and delivered by the Company and, assuming due authorization,
execution and delivery by the other parties thereto,
constitutes a valid and legally binding agreement of the
Company enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization,
fraudulent transfer, fraudulent conveyance, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general principles (whether such
principles are considered in a proceeding in equity or in
law); the Master Unit Agreement, the Pledge Agreement and the
Purchase Contracts conform in all material respects to the
descriptions thereof in the Prospectus as amended or
supplemented; and
(xix) To the best of such counsel's knowledge, the
Trust is not a party to or bound by any agreement or
instrument other than this Agreement, the Trust Agreement and
the agreements and instruments contemplated by the Trust
Agreement and described in the Prospectus; and to the best of
such counsel's knowledge, there are no legal or governmental
proceedings pending to which the Trust is a party or of which
any property of the Trust is the subject and no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others.
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The foregoing opinions may be limited to the laws of Delaware,
Michigan and the federal law of the United States. In giving such opinion, such
counsel may rely, as to matters of Delaware law, upon the opinion of Skadden
Arps, special Delaware counsel to the Trust and the Company, in which case the
opinion shall state that such counsel believes that you and he are entitled to
so rely.
(d) The opinion of Skadden Arps, dated as of such Time of
Delivery, in form and substance to the effect that:
(i) Assuming that: (i) the Pledge Agreement has been
duly authorized executed and delivered by the Unit Agent on
behalf of each of the Holders from time to time, (ii) the
Pledge Agreement constitutes the legal, valid and binding
obligation of the Unit Agent on behalf of each Holder and of
each other party to such agreement enforceable against the
Unit Agent, each Holder and each other party in accordance
with its terms; (iii) the Unit Agent and each Holder has full
power, authority and legal right (including, without
limitation, any legal right dependent upon there being no
conflict with laws, governing documents or contracts) to make
and perform its obligations under the Pledge Agreement; then
such counsel is of the opinion that the provisions of the
Pledge Agreement are effective to create, in favor of the
Collateral Agent for the benefit of the Company and the Call
Option Holder to secure the obligations of the Holders under
the Purchase Contracts and the Call Options, a valid security
interest in each Holders' rights in the certificates
identified on Schedule I to the opinion (the "Pledged Trust
Securities"). Upon delivery of the Pledged Trust Securities to
the Collateral Agent in the State of New York, the security
interest of the Collateral Agent for the benefit of the
Company and the Call Option Holder in the Pledged Trust
Securities will be perfected. Such opinion will be subject to
customary assumptions and qualifications; and
(ii) Assuming that the Master Unit Agreement, the
Purchase Contract underlying the Units being delivered at such
Time of Delivery, and the Pledge Agreement have been duly
authorized, executed and delivered by the Company under
Michigan law, and subject to the enforceability of the choice
of law provisions thereof, each is a valid and legally binding
agreement of the Company enforceable against the Company in
accordance with its terms, except as may be limited by (a)
bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law); provided,
however, that based on a review of applicable case law, upon
the occurrence of a Termination Event (as defined in the
Master Unit Agreement), Section 365 (e)(2) of the Bankruptcy
Code (11 U.S.C. Sections 101-1330, as amended) should not
substantively limit the provisions of Sections __ and __ of
the Master Unit Agreement and Section __ of the Pledge
Agreement that require termination of the Purchase Contracts
and release of the Collateral Agent's security interest in the
Trust Preferred Securities or
21
<PAGE> 22
other Pledged Securities; provided, however, that procedural
restrictions respecting relief from the automatic stay under
Section 362 of the Bankruptcy Code may affect the timing of
the exercise of such rights and remedies.
(e) Skadden, Arps, special tax counsel to the Trust and the
Company, shall have furnished to the Representatives such opinion or
opinions, dated such Time of Delivery, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Trust will be classified as a grantor trust
and not as an association taxable as a corporation; and
(ii) Although the discussion set forth in the
Prospectus included as part of the Registration Statement
under the heading "CERTAIN FEDERAL INCOME TAX CONSEQUENCES"
does not purport to discuss all possible United States federal
income tax consequences of the purchase, ownership, and
disposition of Trust Preferred Securities and Firm Units, such
discussion constitutes, in all material respects, a fair and
accurate summary under current law of the material United
States federal income tax consequences of the purchase,
ownership, and disposition of the Trust Preferred Securities,
Firm Units and Common Stock to investors generally.
(f) Skadden Arps, special Delaware counsel to the Trust and
the Company, shall have furnished to the Representatives, the Company
and the Trust their written opinion or opinions, dated as of such Time
of Delivery, in form and substance satisfactory to the Representatives,
to the effect that:
(i) This Agreement has been duly authorized, executed
and delivered by the Trust;
(ii) The Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Business Trust Act and has the trust power and
authority to conduct its business as described in the Trust
Agreement;
(iii) The Trust Agreement is a valid and binding
agreement of each of the Company and the Trust, enforceable
against the Company in accordance with its terms, except as
enforcement thereof may be limited by (a) bankruptcy,
insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally and (b) general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law);
(iv) Under the Delaware Business Trust Act and the
Trust Agreement, the Trust has the power and authority to (a)
execute and deliver, and to perform its obligations pursuant
to, this Agreement, and (b) issue and perform its obligations
under the Trust Preferred Securities;
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<PAGE> 23
(v) The execution and delivery by the Trust of this
Agreement, and the performance by the Trust of its obligations
thereunder, have been duly authorized by all necessary action
on the part of the Trust;
(vi) The Trust Preferred Securities have been duly
authorized for issuance by the Trust and, when executed and
authenticated by the Property Trustee in accordance with the
terms of the Trust Agreement and delivered and paid for in
accordance with this Agreement, will be fully paid and
non-assessable undivided beneficial interests in the assets of
the Trust and will entitle the holders thereof to the benefits
of this Agreement except to the extent that enforcement of the
Trust Agreement may be limited by (a) bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally and (b) general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law); and the holders of the Trust
Preferred Securities will be entitled to the same limitation
of personal liability extended to stockholders of private
corporations for profit organized under the General
Corporation Law of the State of Delaware, except that the
holders of Trust Preferred Securities may be obligated,
pursuant to the Trust Agreement, to make payments, including
(i) to provide indemnity and/or security in connection with
and pay taxes or governmental charges arising from transfers
of the Trust Preferred Securities and (ii) to provide security
and indemnity in connection with requests of or directions to
the Property Trustee to exercise its rights and powers under
the Trust Agreement; the issuance of the Trust Preferred
Securities is not subject to preemptive or other similar
rights under the Delaware Business Trust Act or the Trust
Agreement;
(vii) None of the execution and delivery by the Trust
of, or the performance by the Trust of its obligations under,
this Agreement, or the issuance and sale of the Trust
Preferred Securities by the Trust in accordance with the terms
of this Agreement or the consummation of the other
transactions contemplated hereby, will contravene any
provision of applicable law or the Trust Agreement or any
agreement or other instrument governed by the laws of the
State of Delaware binding upon the Trust as set forth in the
Trust's certificate, or any judgment, order or decree
applicable to the Trust as set forth in the Trust's
certificate, of any governmental authority;
(viii) No governmental approval is required for the
issuance and sale of the Trust Preferred Securities and the
Trust Common Securities by the Trust pursuant to this
Agreement or the consummation of the other transactions
contemplated hereby, except such as have been obtained and
made;
(g) On the date of the Prospectus and also at such Time of
Delivery, the independent accountants of the Company who have certified
the financial statements of the Company and its consolidated
Subsidiaries included or incorporated by reference in the
23
<PAGE> 24
Registration Statement shall have furnished to the Representatives
a letter, dated as of such date, (i) confirming that they are
independent public accountants within the meaning of the Act and the
applicable published rules and regulations of the Commission
thereunder, (ii) stating that in their opinion the financial statements
examined by them and included or incorporated by reference in the
Registration Statement complied as to form in all material respects
with the applicable accounting requirements of the Commission,
including applicable published rules and regulations of the Commission,
and (iii) covering, as of a date not more than five business days prior
to the date of such letter, such other matters as the Representatives
reasonably request;
(h) That, between the date of the execution of this Agreement
and such Time of Delivery, no material and adverse change shall have
occurred in the business, properties or financial condition of the
Company and its Subsidiaries, taken as a whole, which, in the judgment
of the Representatives, impairs the marketability of the Units (other
than changes referred to in or contemplated by the Registration
Statement or Prospectus);
(i) That, between the date of the execution of this Agreement
and such Time of Delivery, there has been no downgrading of the
investment ratings of the Company's debt securities or preferred stock
by Standard & Poor's Corporation, Moody's Investors Service, Inc. or
Duff & Phelps Credit Rating Co., and the Company shall not have been
placed on "credit watch" or "credit review" with negative implications
by any of such statistical rating organizations if any of such
occurrences shall, in the judgment of the Representatives, after
reasonable inquiries on the part of the Representatives, impair the
marketability of the Units;
(j) Each of the Purchase Contracts, the Master Unit Agreement,
the Pledge Agreement, the Trust Agreement, the Guarantee and the
Indenture shall have been executed and delivered, in each case in a
form reasonably satisfactory to the Representatives;
(k) The Units shall have been duly listed, subject to notice
of issuance, on the New York Stock Exchange;
(l) The Company shall have complied with the provisions of
Section 4(b) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
and
(m) The Trust and the Company shall have furnished or caused
to be furnished to the Representatives at such Time of Delivery
certificates of officers of the Trust and the Company to the effect
that to the best of such person's knowledge, information and belief (i)
there has been no material adverse change in the business, properties
or financial condition of the Company and its Subsidiaries, taken as a
whole or the Trust from that set forth in the Registration Statement or
Prospectus (other than changes referred to in or contemplated by the
Registration Statement or Prospectus), (ii) the representations and
warranties of the Trust and the Company herein at and as of the Time of
Delivery are true and correct, (iii) the Trust and the Company have
complied with all agreements and satisfied all conditions on their part
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<PAGE> 25
to be performed or satisfied at or prior to the Time of Delivery, and
(iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission.
7. Condition on the Obligations of the Company and the Trust. The
obligations of the Company and the Trust shall be subject, in the discretion of
the Company and the Trust, to the condition that the Registration Statement
shall be effective under the Act and no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the Act or
proceedings therefor initiated or threatened by the Commission.
8. Indemnification.
(a) The Trust and the Company, jointly and severally, will, to
the extent permitted by law, indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that neither
the Trust nor the Company shall be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Units, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the Trust
and the Company by the Representatives expressly for use in the Prospectus as
amended or supplemented relating to the Units or with any statements in or
omissions from that part of the Registration Statement that shall constitute the
Statements of Eligibility and Qualification under the Trust Indenture Act of the
Debenture Trustee, the Guarantee Trustee and the Property Trustee, and except
that this indemnity shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) on account of any losses, claims, damages,
liabilities or actions, suits or proceedings arising from the sale of the Units
to any person if a copy of the Prospectus, as the same may then be supplemented
or amended (excluding, however, any document then incorporated or deemed
incorporated therein by reference), was not sent or given by or on behalf of
such Underwriter to such person (i) with or prior to the written confirmation of
sale involved or (ii) as soon as available after such written confirmation,
relating to an event occurring prior to the payment for and delivery to such
person of the Units involved in such sale, and the omission or alleged omission
or untrue statement or alleged untrue statement was corrected in the Prospectus
as supplemented or amended at such time.
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<PAGE> 26
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Trust and the Company against any losses,
claims, damages or liabilities to which the Trust and the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Units, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Securities, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the Trust
and the Company by Underwriter through the Representatives expressly for use
therein; and will reimburse the Trust and the Company for any legal or other
expenses reasonably incurred by the Trust and the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) If a claim is made or an action, suit or proceeding
(including governmental investigations) is commenced or threatened against any
person as to which indemnity may be sought under subsection (a) or (b), such
person (the "Indemnified Person") shall notify the person against whom such
indemnity may be sought (the "Indemnifying Person"), promptly after any
assertion of such claim threatening to institute an action, suit or proceeding
or if such an action, suit or proceeding is commenced against such Indemnified
Person, promptly after such Indemnified Person shall have been served with a
summons or other first legal process, giving information as to the nature and
basis of the claim. Failure to so notify the Indemnifying Person shall not,
however, relieve the Indemnifying Person from any liability which it may have on
account of the indemnity under subsection (a) or (b) if the Indemnifying Person
has not been prejudiced in any material respect by such failure. Subject to the
immediately succeeding sentence, the Indemnifying Person shall assume the
defense of any such litigation or proceeding, including the employment of
counsel and the payment of all expenses, with such counsel being designated,
subject to the immediately succeeding sentence, in writing by the
Representatives in the case of parties indemnified pursuant to subsection (b)
and by the Company in the case of parties indemnified pursuant to subsection
(a). Any Indemnified Person shall have the right to participate in such
litigation or proceeding and to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the
26
<PAGE> 27
Indemnified Person shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including any impleaded
parties) include (x) the Indemnifying Person and (y) the Indemnified Person and,
in the written opinion of counsel to such Indemnified Person, representation of
both parties by the same counsel would be inappropriate due to actual or likely
conflicts of interest between them, in either of which cases the reasonable fees
and expenses of counsel (including disbursements) for such Indemnified Person
shall be reimbursed by the Indemnifying Person to the Indemnified Person. If
there is a conflict as described in clause (ii) above, and the Indemnified
Persons have participated in the litigation or proceeding utilizing separate
counsel whose fees and expenses have been reimbursed by the Indemnifying Person
and the Indemnified Persons, or any of them, are found to be solely liable, such
Indemnified Persons shall repay to the Indemnifying Person such fees and
expenses of such separate counsel as the Indemnifying Person shall have
reimbursed. It is understood that the Indemnifying Person shall not, in
connection with any litigation or proceeding or related litigation or
proceedings in the same jurisdiction as to which the Indemnified Persons are
entitled to such separate representation, be liable under this Agreement for the
reasonable fees and out-of-pocket expenses for more than one separate firm
(together with not more than one appropriate local counsel) for all such
Indemnified Persons. Subject to the next paragraph, all such fees and expenses
shall be reimbursed by payment to the Indemnified Persons of such reasonable
fees and expenses of counsel promptly after payment thereof by the Indemnified
Persons.
In furtherance of the requirement above that fees and expenses of any
separate counsel for the Indemnified Persons shall be reasonable, the
Representatives and the Company agree that the Indemnifying Person's obligations
to pay such fees and expenses shall be conditioned upon the following:
(i) in case separate counsel is proposed to be
retained by the Indemnified Persons pursuant to clause (ii) of
the preceding paragraph, the Indemnified Persons shall in good
faith fully consult with the Indemnifying Person in advance as
to the selection of such counsel;
(ii) reimbursable fees and expenses of such separate
counsel shall be detailed and supported in a manner reasonably
acceptable to the Indemnifying Person (but nothing herein
shall be deemed to require the furnishing to the Indemnifying
Person of any information, including without limitation,
computer print-outs of lawyers' daily time entries, to the
extent that, in the judgment of such counsel, furnishing such
information might reasonably be expected to result in a waiver
of any attorney-client privilege); and
(iii) the Company and the Representatives shall
cooperate in monitoring and controlling the fees and expenses
of separate counsel for Indemnified Persons for which the
Indemnifying Person is liable hereunder, and the Indemnified
Person shall use every reasonable effort to cause such
separate counsel to minimize the duplication of activities as
between themselves and counsel to the Indemnifying Person.
The Indemnifying Person shall not be liable for any settlement of any
litigation or proceeding effected without the written consent of the
Indemnifying Person, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees, subject to the
provisions of this Section 8, to indemnify the Indemnified Person from and
against any loss, damage, liability or expenses by reason of such settlement or
judgment. The Indemnifying Person shall not, without the prior written consent
of the Indemnified Persons, effect any settlement of any pending or threatened
litigation, proceeding or claim in respect of which indemnity has been properly
sought by the Indemnified Persons hereunder, unless such settlement includes an
unconditional release by the claimant of all Indemnified Persons from all
liability with respect to claims which are the subject matter of such
litigation, proceeding or claim.
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<PAGE> 28
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Trust and the Company on the one hand and the
Underwriters on the other from the offering of the Units. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above and such failure resulted in the indemnifying party
being prejudiced in a material way, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Trust and the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Trust and the Company on the one hand and such
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from such offering (before deducting expenses) received by
the Trust and the Company bear to the total placement fees received by such
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Trust and the Company on the one hand or such
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Trust, the Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) 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 which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim, provided that the provisions of
subsection (c) have been complied with (in all material respects) in respect of
any separate counsel for such indemnified party. Notwithstanding the provisions
of this subsection (d), no Underwriter shall be required to contribute any
amount greater than the excess of (i) the total price at which the Units placed
by it and distributed to the public were offered to the public over (ii) the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of 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 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligations of the
Underwriters in this subsection (d) to contribute are several in proportion to
their respective placement fees and not joint.
(e) The obligations of the Trust and the Company under this
Section 8 shall be in addition to any liability which the Trust and the Company
may otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the
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<PAGE> 29
meaning of the Act; and the obligations of the Agents under this Section 8 shall
be in addition to any liability which the respective Agents may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company, each Administrative Trustee under the Trust Agreement
and to each person, if any, who controls the Trust and the Company within the
meaning of the Act.
9. Survival. The respective indemnities, agreements, representations,
warranties and other statements of the Trust and the Company and the several
Agents, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Trust, the Company, or any officer, director, Administrative
Trustee or controlling person of the Trust or the Company, and shall survive
delivery of and payment for the Units.
10. Termination.
(a) This Agreement may be terminated at any time prior to such
Time of Delivery by the Representatives if, prior to such time, any of the
following events shall have occurred: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange; (ii) a
suspension or material limitation in trading in the Company's securities on the
New York Stock Exchange; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this Clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Prospectus.
(b) If the Representatives elect to terminate this Agreement,
as provided in this Section 10, the Representatives will promptly notify the
Company and each other Underwriter by telephone or telecopy, confirmed by
letter. If this Agreement shall not be carried out by any Underwriter for any
reason permitted hereunder, or if the sale of the Units to the Underwriters as
herein contemplated shall not be carried out because the Company is not able to
comply with the terms hereof, the Company shall not be under any obligation
under this Agreement and shall not be liable to any Underwriter or to any member
of any selling group for the loss of anticipated profits from the transactions
contemplated by this Agreement and Underwriters shall be under no liability to
the Company nor be under any liability under this Agreement to one another.
(c) Notwithstanding the foregoing, the provisions of Sections
5 and 8 shall survive any termination of this Agreement.
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<PAGE> 30
11. Notices. All notices hereunder shall, unless otherwise expressly
provided, be in writing and be delivered at or mailed to the following addresses
or be sent by telecopy as follows: if to the Underwriters or the
Representatives, to the Representatives at the address or number, as
appropriate, designated in Schedule I hereto, and, if to the Company, to CMS
Energy Corporation, Fairlane Plaza South, Suite 1100, 330 Town Center Drive,
Dearborn, Michigan 48126, attention:
Alan M. Wright, Senior Vice President and Chief Financial Officer.
12. Parties in Interest. This Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Trust, the Company and, to
the extent provided in Sections 8 and 9 hereof, the officers, directors and
administrative trustees of the Trust, the Company and each person who controls
the Trust, the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Units from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
13. Time of the Essence. Time shall be of the essence of this
Agreement.
14. Definition of Certain Terms. The term "Underwriters," as used
herein, shall be deemed to mean the several persons, firms or corporations,
named in Schedule II hereto (including the Representatives herein mentioned, if
so named), and the term "Representatives," as used herein, shall be deemed to
mean the Representatives or Representatives designated by, or in the manner
authorized by, the Underwriters in Schedule I hereto. All obligations of the
Underwriters hereunder are several and not joint. If there shall be only one
person, firm or corporation named in Schedule I and Schedule II hereto, the term
"Underwriters" and the term "Representatives," as used herein, shall mean such
person, firm or corporation. If the firm or firms listed in Schedule I hereto
are the same as the firm or firms listed in Schedule II hereto, then the terms
"Underwriters" and "Representatives," as used herein, shall each be deemed to
refer to such firm or firms. The term "successors" as used in this Agreement
shall not include any purchaser, as such purchaser, of any of the Units from any
of the respective Underwriters.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. Counterparts. This Agreement may be executed by any one or more of
the parties hereto and thereto in any number of counterparts, each of which
shall be deemed to be an original, but all such respective counterparts shall
together constitute one and the same instrument.
30
<PAGE> 31
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Trust, the Company, each of the Underwriters and
each of the Representatives plus one for each counsel counterparts hereof.
Very truly yours,
CMS ENERGY TRUST II
By: /s/ ALAN M. WRIGHT
-------------------------
Alan M. Wright
Administrative Trustee
CMS ENERGY CORPORATION
By: /s/ ALAN M. WRIGHT
-------------------------
Alan M. Wright
Senior Vice President and
Chief Financial Officer
Accepted as of the date hereof:
SALOMON SMITH BARNEY, INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
As Representatives of the several
Underwriters named in Schedule II hereto
By: SALOMON SMITH BARNEY INC.
By: /s/ JOYCE E. ERONY
------------------------------
Name: Joyce E. Erony
Title: Authorized Signatory
31
<PAGE> 32
SCHEDULE I
REPRESENTATIVES
SOLOMON SMITH BARNEY INC.
DONALDSON LUFKIN& JENRETTE
SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
c/o SALOMON SMITH BARNEY INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
ATTN:
TELEPHONE:
FACSIMILE:
<PAGE> 33
SCHEDULE II
<TABLE>
<CAPTION>
NUMBER OF OPTIONAL
NUMBER OF FIRM UNITS TO BE PURCHASED IF
UNDERWRITERS UNITS TO BE PURCHASED MAXIMUM OPTION EXERCISED
------------ --------------------- ------------------------
<S> <C> <C>
Salomon Smith Barney Inc. 3,443,750 516,562.5
Donaldson Lufkin & Jenrette
Securities Corporation 3,443,750 516,562.5
Banc of America Securities LLC 362,500 54,375
========= =========
Total.............. 7,250,000 1,087,500
</TABLE>
<PAGE> 1
Exhibit 4(h)
================================================================================
AMENDED AND RESTATED
DECLARATION OF TRUST
among
CMS Energy Corporation, as Sponsor,
The Bank of New York,
as Property Trustee,
The Bank of New York (Delaware)
as Delaware Trustee,
and
THE ADMINISTRATORS NAMED HEREIN
Dated as of July 8, 1999
CMS Energy Trust II
================================================================================
<PAGE> 2
AMENDED AND RESTATED DECLARATION
OF TRUST
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
INTERPRETATION AND DEFINITIONS...................................................1
Section 1.1. Definitions.............................................2
ARTICLE II
TRUST INDENTURE ACT.............................................................11
Section 2.1. Trust Indenture Act; Application.......................11
Section 2.2. Lists of Holders of Securities.........................11
Section 2.3. Reports by the Property Trustee........................12
Section 2.4. Periodic Reports to Property Trustee...................12
Section 2.5. Evidence of Compliance with Conditions
Precedent.............................................12
Section 2.6. Events of Default; Waiver..............................12
Section 2.7. Event of Default; Notice...............................15
ARTICLE III
ORGANIZATION....................................................................16
Section 3.1. Name...................................................16
Section 3.2. Office.................................................16
Section 3.3. Purpose................................................16
Section 3.4. Authority..............................................16
Section 3.5. Title to Property of the Trust.........................17
Section 3.6. Powers and Duties of the Administrators................17
Section 3.7. Prohibition of Actions by the Trust, the Administrators
and the Trustees......................................21
Section 3.8. Powers and Duties of the Property Trustee..............22
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 3.9. Certain Duties and Responsibilities of the
Property Trustee......................................25
Section 3.10. Certain Rights of the Property Trustee.................27
Section 3.11. Delaware Trustee.......................................30
Section 3.12. Execution of Documents.................................30
Section 3.13. Not Responsible for Recitals or Issuance of
Securities............................................30
Section 3.14. Duration of Trust......................................31
Section 3.15. Mergers................................................31
ARTICLE IV
SPONSOR.........................................................................33
Section 4.1. Sponsor's Purchase of Common Trust Securities..........33
Section 4.2. Responsibilities of the Sponsor........................33
Section 4.3. Right to Proceed.......................................34
ARTICLE V
TRUSTEES AND ADMINISTRATORS.....................................................35
Section 5.1. Number of Trustees: Appointment of Co-Trustee..........35
Section 5.2. Delaware Trustee.......................................35
Section 5.3. Property Trustee; Eligibility..........................36
Section 5.4. Certain Qualifications of Administrators and
Delaware Trustee Generally............................37
Section 5.5. Administrators.........................................37
Section 5.6. Delaware Trustee.......................................38
Section 5.7. Appointment, Removal and Resignation of Trustees.......38
Section 5.8. Vacancies among Trustees...............................40
Section 5.9. Effect of Vacancies....................................40
Section 5.10. Meetings...............................................40
Section 5.11. Delegation of Power....................................41
Section 5.12. Merger, Conversion, Consolidation or Succession
to Business...........................................41
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VI
DISTRIBUTIONS...................................................................42
Section 6.1. Distributions..........................................42
ARTICLE VII
ISSUANCE OF SECURITIES..........................................................42
Section 7.1. General Provisions Regarding Securities................42
Section 7.2. Execution And Authentication...........................43
Section 7.3. Form And Dating........................................44
Section 7.4. Registrar, Paying Agent And Exchange Agent.............45
Section 7.5. Paying Agent to Hold Money in Trust....................46
Section 7.6. Replacement Securities.................................46
Section 7.7. Outstanding Trust Preferred Securities.................47
Section 7.8. Trust Preferred Securities in Treasury.................47
Section 7.9. Temporary Securities...................................47
Section 7.10. Cancellation...........................................48
Section 7.11. CUSIP Numbers..........................................48
ARTICLE VIII
DISSOLUTION OF TRUST............................................................49
Section 8.1. Dissolution of Trust...................................49
ARTICLE IX
TRANSFER OF INTERESTS...........................................................50
Section 9.1. Transfer of Securities.................................50
Section 9.2. Transfer Procedures And Restrictions...................51
Section 9.3. Deemed Security Holders................................55
Section 9.4. Book Entry Interests...................................55
Section 9.5. Notices to Clearing Agency.............................56
Section 9.6. Appointment of Successor Clearing Agency...............56
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF
SECURITIES, TRUSTEES, ADMINISTRATORS OR OTHERS..................................56
Section 10.1. Liability..............................................56
Section 10.3. Fiduciary Duty.........................................57
Section 10.4. Indemnification........................................58
Section 10.5. Outside Businesses.....................................62
ARTICLE XI
ACCOUNTING...........................................................................63
Section 11.1. Fiscal Year............................................63
Section 11.2. Certain Accounting Matters.............................63
Section 11.3. Banking................................................64
Section 11.4. Withholding............................................64
ARTICLE XII
AMENDMENTS AND MEETINGS..............................................................64
Section 12.1. Amendments.............................................64
Section 12.2. Meetings of The Holders; Action by Written Consent.....67
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE
TRUSTEE..............................................................................69
Section 13.1. Representations And Warranties of Property Trustee.....69
Section 13.2. Representations And Warranties of Delaware Trustee.....70
ARTICLE XIV
MISCELLANEOUS........................................................................71
Section 14.1. Notices................................................71
Section 14.2. Governing Law..........................................72
</TABLE>
iv
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 14.3. Intention of The Parties...............................72
Section 14.4. Headings...............................................72
Section 14.5. Successors And Assigns.................................73
Section 14.6. Partial Enforceability.................................73
Section 14.7. Counterparts...........................................73
</TABLE>
Annex I - Terms of Securities
Exhibit A-1 - Form of Trust Preferred Security
Exhibit A-2 - Form of Common Trust Security
v
<PAGE> 7
AMENDED AND RESTATED DECLARATION OF TRUST
OF
CMS Energy Trust II
July 8, 1999
AMENDED AND RESTATED DECLARATION OF TRUST
("Declaration") dated and effective as of July 8, 1999, by the Trustees (as
defined herein), the Sponsor (as defined herein), the Administrators (as defined
herein) and by the holders, from time to time, of undivided beneficial ownership
in the assets of the Trust to be issued pursuant to this Declaration;
WHEREAS, CMS Energy Trust II (the "Trust") has been
established as a trust created under the Business Trust Act (as defined herein)
pursuant to a Trust Agreement dated as of May 22, 1997 (the "Original
Declaration") and a Certificate of Trust executed and filed with the Secretary
of State of the State of Delaware on May 22, 1997, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
ownership interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer (each as hereinafter
defined);
WHEREAS, the parties hereto, by this Declaration, amend and
restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial ownership interests in the assets of the Trust
issued hereunder, subject to the provisions of this Declaration.
<PAGE> 8
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise
requires:
(a) Capitalized terms used in this Declaration but
not defined in the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) a term defined anywhere in this Declaration has
the same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Declaration as modified, supplemented or amended from
time to time;
(d) all references in this Declaration to Articles
and Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has
the same meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires;
(f) a term defined in the Indenture (as defined
herein) and the Master Unit Agreement (as defined herein) has the same meaning
when used in this Declaration unless otherwise defined in this Declaration or
the context otherwise requires; and
(g) a reference to the singular includes the plural
and vice versa.
"Administrators" means each of Alan M. Wright and Thomas A.
McNish solely in such Person's capacity as Administrator of the Trust created
and continued hereunder and not in such Person's individual capacity, or such
Administrator's successor in interest in such capacity, or any successor
appointed as herein provided.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act or any successor rule thereunder.
2
<PAGE> 9
"Agent" means any Paying Agent, Registrar or Exchange Agent.
"Authorized Officer" of a Person means any other Person that
is authorized to legally bind such former Person.
"Bankruptcy Event" means, with respect to any Person:
(a) a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person
in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or
for all or any substantial part of its property, or ordering
the winding-up or liquidation of its affairs and such decree
or order shall remain unstayed and in effect for a period of
90 consecutive days; or
(b) such Person shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, shall consent to the entry of an order
for relief in an involuntary case under any such law, or shall
consent to the appointment of or taking of possession by a
receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of such Person of all
or any substantial part of its property, or shall make any
general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due.
"Book Entry Interest" means a beneficial interest in a Global
Security registered in the name of a Clearing Agency or its nominee, ownership
and transfers of which shall be maintained and made through book entries by a
Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday or a Sunday
or a day on which banking institutions in The City of New York are authorized or
required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801 et seq., as it may be amended from time
to time, or any successor legislation.
3
<PAGE> 10
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Trust Preferred Securities and in whose name or in the name
of a nominee of that organization shall be registered a Global Security and
which shall undertake to effect book-entry transfers and pledges of the Trust
Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Time" means the "First Time of Delivery" under the
Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the United States Securities and Exchange
Commission as from time to time constituted, or if any time after the execution
of this Declaration such Commission is not existing and performing the duties
now assigned to it under applicable federal securities laws, then the body
performing such duties at such time.
"Common Trust Securities" has the meaning specified in Section
7.1(a).
"Common Trust Securities Guarantee" means the guarantee
agreement of the Sponsor dated as of July 8, 1999 in respect of the Common Trust
Securities.
"Common Trust Securities Subscription Agreement" means the
Common Trust Securities Subscription Agreement, dated July 8, 1999 by and
between the Debenture Issuer and the Trust.
"Company Indemnified Person" means (a) any Administrator; (b)
any Affiliate of any Administrator; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Administrator; or
(d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Property
Trustee at which the corporate trust business of the Property Trustee shall, at
any particular
4
<PAGE> 11
time, be principally administered, which office at the date of execution of this
Agreement is located at 101 Barclay Street, Fl. 21 West, NY, NY 10286,
Attention: Corporate Trust Administration.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means CMS Energy Corporation, a Michigan
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debenture Subscription Agreement" means the Debenture
Subscription Agreement, dated July 8, 1999, by and between the Debenture Issuer
and the Trust.
"Debenture Trustee" means The Bank of New York, as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Debentures" means the 8.625% Junior Subordinated Deferrable
Interest Debentures due July 8, 2004 of the Debenture Issuer issued pursuant to
the Indenture.
"Default" means an event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.
"Definitive Trust Preferred Securities" shall have the meaning
set forth in Section 7.3(d).
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direct Action" shall have the meaning set forth in Section
3.8(e).
"Distribution" means a distribution payable to Holders in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
5
<PAGE> 12
"Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Final Redemption Price" has the meaning set forth in Section
4 of Annex I hereto.
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Security" has the meaning set forth in Section 7.3(b).
"Holder" means a Person in whose name a Security is
registered, such Person being a beneficial owner within the meaning of the
Business Trust Act, provided, however, that with respect to any Trust Preferred
Securities that form a part of Normal Units, the Holder (as defined in the
Master Unit Agreement and as notified to the Property Trustee by or on behalf of
the Unit Agent) of such Normal Units shall be deemed to be the Holder of such
Trust Preferred Securities for all purposes under the Declaration and the
Indenture other than for receipt of Distributions on, or other payments to be
made in respect of, such Trust Preferred Securities (including the distribution
of Debentures in connection with a Dissolution Event or the exercise of a Put
Option). The Property Trustee shall from time to time request from the Unit
Agent a copy of the Unit Register for the Normal Units as shall be necessary to
give effect to the foregoing.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of June 1, 1997,
between the Debenture Issuer and the Debenture Trustee, as amended, modified or
supplemented from time to time, including as amended by the Terms Resolutions of
the Debenture Issuer relating to the Debentures and dated as of July 1, 1999.
"Investment Company" means an investment company as defined in
the Investment Company Act.
6
<PAGE> 13
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(f).
"Like Amount" has the meaning set forth in Section 3 of Annex
I hereto.
"Majority in liquidation amount" means, with respect to the
Trust Securities, except as provided in the terms of the Trust Preferred
Securities or by the Trust Indenture Act, Holder(s) of outstanding Trust
Securities voting together as a single class or, as the context may require,
Holders of outstanding Trust Preferred Securities or Holders of outstanding
Common Trust Securities voting separately as a class, who are the record owners
of more than 50% of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Master Unit Agreement" shall mean the Master Unit Agreement
between CMS Energy Corporation and The Bank of New York, as Unit Agent, dated
as of July 8, 1999.
"Officers' Certificate" means, (i) with respect to any Person
other than the Trust, a certificate signed by two of the following: the
Chairman, a Vice Chair man, the Chief Executive Officer, the President, the
Chief Financial Officer, a Vice President (whether or not designated by a number
or a word or words added before or after such title), the Comptroller, or the
Secretary or an Assistant Secretary of such Person and (ii) with respect to the
Trust, a certificate signed by not less than two administrators. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(i) a statement that each officer signing
the Officers' Certificate has read the covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement of the nature and
scope of the examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
7
<PAGE> 14
(iii) a statement that each such officer has
made such examination or investigation as, in such officer's opinion,
is necessary to enable such officer to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(iv) a statement as to whether, in the
opinion of each such officer, such condition or covenant has been
complied with.
"Opinion of Counsel" shall mean a written opinion of counsel,
who may be an employee of the Sponsor, and which shall be delivered to the
Property Trustee.
"Participants" shall have the meaning set forth in Section
7.3(c).
"Paying Agent" has the meaning specified in Section 7.4.
"Payment Amount" has the meaning set forth in Section 6.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Property Trustee" has the meaning set forth in Section
5.3(a).
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Quorum" means a majority of the Administrators or, if there
are only two Administrators, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Statements" has the meaning set forth in Section
3.6(b).
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
8
<PAGE> 15
"Responsible Officer" means, with respect to the Property
Trustee, any officer within the Corporate Trust Office of the Property Trustee
with direct responsibility for the administration of this Declaration and also
means, with respect to a particular corporate trust matter, any other officer of
the Property Trustee to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Securities" or "Trust Securities" means the Common Trust
Securities and the Trust Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Securities Guarantees" means the Common Trust Securities
Guarantee and the Trust Preferred Securities Guarantee.
"Sponsor" means CMS Energy Corporation, a Michigan
corporation, or any successor entity resulting from any merger, consolidation,
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Subscription Agreements" means the Common Trust Securities
Subscription Agreement and the Debenture Subscription Agreement.
"Successor Delaware Trustee" has the meaning set forth in
Section 5.7(b)(ii).
"Successor Entity" has the meaning set forth in Section
3.15(b)(i).
"Successor Property Trustee" has the meaning set forth in
Section 3.8(f).
"Successor Securities" has the meaning set forth in Section 3
.15(b)(i)(B).
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"10% in liquidation amount" means, with respect to the Trust
Securities, except as provided in the terms of the Trust Preferred Securities or
by the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single
9
<PAGE> 16
class or, as the context may require, Holders of outstanding Trust Preferred
Securities or Holders of outstanding Common Trust Securities voting separately
as a class, who are the record owners of 10% or more of the aggregate
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Preferred Securities has the meaning specified in
Section 7.1(a).
"Trust Preferred Securities Guarantee" means the guarantee
agreement of the Sponsor dated as of July 8, 1999 in respect of the Trust
Preferred Securities.
"Trust Preferred Securities Beneficial Owner" means, with
respect to a Book Entry Interest, a Person who is the beneficial owner of such
Book Entry Interest, as reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly as
a Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Underwriting Agreement" means the Underwriting Agreement
among CMS Energy Corporation, the Trust and the underwriters named therein,
dated as of July 1, 1999, for the initial offering and sale of the Units.
"Units" has the meaning set forth in the Master Unit
Agreement.
10
<PAGE> 17
"1933 Act Registration Statement" has the meaning set forth in
Section 3.6(b).
"1934 Act Registration Statement" has the meaning set forth in
Section 3.6(b).
ARTICLE II
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; (a) Application. This
Declaration is subject to the provisions of the Trust Indenture Act that are
required to be part of this Declaration and shall, to the extent applicable, be
governed by such provisions.
(b) The Property Trustee shall be the only Trustee
which is a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to
this Declaration shall not affect the nature of the Securities as equity
securities representing undivided beneficial ownership interests in the assets
of the Trust.
Section 2.2. Lists of Holders of Securities. (a) Each of the
Sponsor and the Administrators on behalf of the Trust shall provide the Property
Trustee, unless the Property Trustee is Registrar for the Securities (i) on a
quarterly basis on each record date for payment of Distributions, a list, in
such form as the Property Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of such record date, and (ii) at
such other times as the Property Trustee may request in writing, within 30 days
of receipt by the Trust, of such written request, a List of Holders as of a date
not more than 15 days prior to the time such List of Holders is furnished to the
Property Trustee. The Property Trustee shall preserve, in as current a form as
is reasonably practicable, all information contained in Lists of Holders given
to it or which it receives in the capacity as Paying Agent (if acting in such
capacity), provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
11
<PAGE> 18
(a) The Property Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 2.3. Reports by the Property Trustee. If required by
Section 313(a) of the Trust Indenture Act, the Property Trustee shall, within
sixty days after each May 15, following the date of this Indenture, commencing
May 15, 2000, deliver to the Holders of Trust Preferred Securities a brief
report, dated as of such May 15, 2000, which complies with the provisions of
such Section 313(a) of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
Section 2.4. Periodic Reports to Property Trustee. Each of the
Sponsor and the Administrators on behalf of the Trust shall provide to the
Property Trustee such documents, reports and information as are required by
Section 314 of the Trust Indenture Act (if any) and the compliance certificate
required by Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture Act. Delivery of
such documents, reports and information to the Trustee is for informational
purposes only and the Property Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Trust's compliance with any of its
covenants hereunder (as to which the Property Trustee is entitled to rely
exclusively on Officers' Certificates).
Section 2.5. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrators on behalf of the Trust shall provide
to the Property Trustee such evidence of compliance with any conditions
precedent provided for in this Declaration that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c) (1) of the
Trust Indenture Act may be given in the form of an Officers' Certificate.
Section 2.6. Events of Default; Waiver. The Holders of a
Majority in liquidation amount of Trust Preferred Securities may, by vote or
written consent, on behalf of the Holders of all of the Trust Preferred
Securities, waive any past Event of Default in respect of the Trust Preferred
Securities and its consequences, provided, that if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the
Event of Default under the Declaration shall also not be waivable; or
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(ii) requires the consent or vote of greater
than a majority in aggregate principal amount of the holders of the
Debentures (a "Super Majority") to be waived under the Indenture, the
Event of Default under the Declaration may only be waived by the vote
of the Holders of at least the proportion in aggregate liquidation
amount of the Trust Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the Trust
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Trust
Preferred Securities or impair any right consequent thereon. Any waiver by the
Holders of the Trust Preferred Securities of an Event of Default with respect to
the Trust Preferred Securities shall also be deemed to constitute a waiver by
the Holders of the Common Trust Securities of any such Event of Default with
respect to the Common Trust Securities for all purposes of this Declaration
without any further act, vote, or consent of the Holders of the Common Trust
Securities.
The Holders of a Majority in liquidation amount of the Trust
Preferred Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property Trustee,
including the right to direct the Property Trustee to exercise the remedies
available to it as holder of the Debentures; provided, however, that (subject to
the provisions of Section 3.9) the Property Trustee shall have the right to
decline to follow any such direction if the Property Trustee shall determine
that the action so directed would be unjustly prejudicial to the Holders not
taking part in such direction or if the Property Trustee, being advised by
counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Property Trustee, in good faith, by a trust committee of
directors or Responsible Officers, shall determine that the action or
proceedings so directed would involve the Property Trustee in personal
liability. If the Property Trustee fails to enforce its rights under the
Debentures after the Holders of a Majority in liquidation amount of the Trust
Preferred Securities have so directed the Property Trustee, a Holder of record
of such Trust Preferred Securities may, to the fullest
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extent permitted by law, institute a legal proceeding against the Debenture
Issuer to enforce the Property Trustee's rights under the Debentures without
first instituting any legal proceeding against the Property Trustee or any other
Person.
(b) The Holders of a Majority in liquidation amount
of the Common Trust Securities may, by vote or written consent, on behalf of the
Holders of all of the Common Trust Securities, waive any past Event of Default
with respect to the Common Trust Securities and its consequences, provided, that
if the underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture,
except where the Holders of the Common Trust Securities are deemed to
have waived such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default under the
Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super
Majority to be waived, except where the Holders of the Common Trust
Securities are deemed to have waived such Event of Default under the
Declaration as provided below in this Section 2.6(b), the Event of
Default under the Declaration may only be waived by the vote of the
Holders of at least the proportion in aggregate liquidation amount of
the Common Trust Securities that the relevant Super Majority represents
of the aggregate principal amount of the Debentures outstanding;
provided further, each Holder of Common Trust Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Trust Securities and its consequences until all Events of Default with
respect to the Trust Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Trust Preferred Securities and only the Holders of
the Trust Preferred Securities will have the right to direct the Property
Trustee in accordance with the terms of the Securities. The foregoing provisions
of this Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Subject
to the foregoing provisions of this Section 2.6(b), upon such waiver, any such
default shall cease to exist and any Event of Default with respect to
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the Common Trust Securities arising therefrom shall be deemed to have been cured
for every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Common
Trust Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the
Indenture by the Property Trustee, at the direction of the Holders of the Trust
Preferred Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.6(c) shall be
in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act.
Section 2.7. Event of Default; Notice. (a) The Property
Trustee shall, within 90 days after the occurrence of an Event of Default
actually known to a Responsible Officer of the Property Trustee, transmit by
mail, first class postage prepaid, to the Holders, notices of all defaults with
respect to the Securities actually known to a Responsible Officer of the
Property Trustee, unless such defaults have been cured before the giving of such
notice (the term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be an Event of Default as defined in the Indenture, not including any
periods of grace provided for therein and irrespective of the giving of any
notice provided therein); provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures, the
Property Trustee shall be protected in withholding such notice if and so long as
a Responsible Officer of the Property Trustee in good faith determines that the
with holding of such notice is in the interests of the Holders.
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 5.01(1) and
5.01(2) of the Indenture; or
(ii) any default as to which the Property
Trustee shall have received written notice or of which a Responsible
Officer of the Property Trustee charged with the administration of the
Declaration shall have actual knowledge.
(c) Within ten Business Days after the occurrence of
an Event of Default actually known to a Responsible Officer of the Property
Trustee, the
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Property Trustee shall transmit notice of such Event of Default to the holders
of the Trust Preferred Securities, the Administrators and the Sponsor, unless
such Event of Default shall have been cured or waived. The Sponsor and the
Administrators shall file annually with the Property Trustee a certification as
to whether or not they are in compliance with all the conditions and covenants
applicable to them under this Declaration. The Company shall deliver to the
Trustee within 5 Business Days after the Company becomes aware of the occurrence
of any Event of Default or an event which, with notice or lapse of time, would
constitute an Event of Default, an Officers' Certificate setting forth the
details of, and what action the Company proposes to take with respect to, such
Event of Default.
ARTICLE III
ORGANIZATION
Section 3.1. Name. The Trust is named "CMS Energy Trust II" as
such name may be modified from time to time by the Administrators following
written notice to the Trustees and the Holders of Securities. The Trust's
activities may be conducted under the name of the Trust or any other name deemed
advisable by the Administrators.
Section 3.2. Office. The address of the principal office of
the Trust is c/o CMS Energy Corporation, Fairlane Plaza, Suite 1100, 330 Town
Center Drive, Dearborn, Michigan 48126. On ten Business Days written notice to
the Property Trustee, the Delaware Trustee and the Holders of Securities, the
Administrators may designate another principal office.
Section 3.3. Purpose. The exclusive purposes and functions of
the Trust are (a) to issue and sell the Securities, (b) use the proceeds from
the sale of the Securities to acquire the Debentures, and (c) except as
otherwise limited herein, to engage in only those other activities necessary or
incidental thereto, including, without limitation, those activities specified in
Sections 3.6, 3.8, 3.9, 3.10, 3.11 and/or 3.12. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, mortgage or
pledge any of its assets, or otherwise under take (or permit to be undertaken)
any activity that would cause the Trust not to be classified for United States
Federal income tax purposes as a grantor trust.
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Section 3.4. Authority. Subject to the limitations provided in
this Declaration and to the specific duties of the Property Trustee, the
Administrators shall have exclusive and complete authority to carry out the
purposes of the Trust. An action taken by the Administrators or any of them in
accordance with their powers shall constitute the act of and serve to bind the
Trust and an action taken by the Property Trustee on behalf of the Trust in
accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration. The
Administrators shall have only those ministerial duties set forth herein with
respect to accomplishing the purposes of the Trust and are not intended to be
trustees or fiduciaries with respect to the Trust or the Holders. The Property
Trustee shall have the right, but shall not be obligated except as specifically
provided in Section 3.6, to perform those duties assigned to the Administrators.
Section 3.5. Title to Property of the Trust. Except as
provided in Section 3.8 with respect to the Debentures and the Property Trustee
Account or as otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders shall not have legal
title to any part of the assets of the Trust, but shall have an undivided
beneficial ownership interest in the assets of the Trust.
Section 3.6. Powers and Duties of the Administrators. The
Administrators shall have the exclusive power, duty and authority to cause the
Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance
with this Declaration; provided, however, that (i) except as contemplated in
Section 7.1(a), (A) the Trust may issue no more than one series of Trust
Preferred Securities and no more than one series of Common Trust Securities and
(B) there shall be no interests in the Trust other than the Securities, and (ii)
the issuance of Securities shall be limited to a simultaneous issuance of both
Trust Preferred Securities and Common Trust Securities at the Closing Time;
(b) in connection with the registration, issue and
sale of the Trust Preferred Securities, to:
(i) execute and file on behalf of the Trust,
(a) a registration statement, including pre-effective or post-effective
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amendments to such registration statement and any and all amendments to
registration statements filed pursuant to Rule 462(b) promulgated under
the Securities Act, relating to the registration under the Securities
Act, of the Securities (the "1933 Act Registration Statement"), and (b)
a registration statement on Form 8-A or other appropriate form (the
"1934 Act Registration Statement" and together with the 1933 Act
Registration Statement, the "Registration Statements") (including all
pre-effective and post-effective amendments thereto) relating to the
registration of the Securities of the Trust under the Exchange Act;
(ii) execute and file on behalf of the Trust
such applications, reports, surety bonds, irrevocable consents,
appointments of attorney for service of process and other papers and
documents as the Sponsor, on behalf of the Trust, may deem necessary or
desirable to register the Securities under the securities or "Blue Sky"
laws of any applicable jurisdiction;
(iii) execute and file a listing application
and all other applications, statements, certificates, agreements and
other instruments as shall be necessary or desirable to permit the
Trust Preferred Securities to trade or be quoted or listed in or on the
New York Stock Exchange or any other securities exchange, quotation
system or the Nasdaq National Market;
(iv) execute, deliver and perform on behalf
of the Trust such underwriting or purchase agreements with one or more
underwriters, purchasers or agents relating to the offering of the
Securities as the Sponsor, on behalf of the Trust, may deem necessary
or desirable; and
(v) execute and deliver letters, documents
or instruments with DTC and other Clearing Agencies relating to the
Trust Preferred Securities.
(c) to acquire the Debentures with the proceeds of
the sale of the Trust Preferred Securities and the Common Trust Securities;
provided, however, that the Administrators shall cause legal title to the
Debentures to be held of record in the name of the Property Trustee for the
benefit of the Holders;
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(d) to establish a record date with respect to all
actions to be taken hereunder that require a record date be established,
including and with respect to, for the purposes of Section 316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and exchanges, and to
issue relevant notices to the Holders of Trust Preferred Securities and Holders
of Common Trust Securities as to such actions and applicable record dates;
(e) to take all actions and perform such duties as
may be required of the Administrators pursuant to the terms of the Securities;
(f) to the fullest extent permitted by law, to bring
or defend, pay, collect, compromise, arbitrate, resort to legal action, or
otherwise adjust claims or demands of or against the Trust (each a "Legal
Action"), unless pursuant to Section 3.8(e), the Property Trustee has the
exclusive power to bring such Legal Action;
(g) to employ or otherwise engage employees and
agents (who may be designated as officers with titles) and managers,
contractors, advisors, and consultants and pay reasonable compensation for such
services;
(h) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(i) to give the certificate required by Section
314(a)(4) of the Trust Indenture Act to the Property Trustee, which certificate
may be executed by any Administrator;
(j) to incur expenses that are necessary or
incidental to carry out any of the purposes of the Trust;
(k) to act as, or appoint another Person to act as,
Registrar and Exchange Agent for the Securities or to appoint a Paying Agent for
the Securities as provided in Section 7.4 except for such time as such power to
appoint a Paying Agent is vested in the Property Trustee;
(l) to give prompt written notice to the Property
Trustee and to Holders of any notice received from the Debenture Issuer of its
election to defer payments of interest on the Debentures by extending the
interest payment period under the Indenture;
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(m) to take all action that may be necessary or
appropriate for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business trust under
the laws of the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of the
Trust Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(n) to take any action, not inconsistent with this
Declaration, the certificate of trust of the Trust or with applicable law, that
the Administrators determine in their discretion to be necessary or desirable in
carrying out the activities of the Trust as set out in this Section 3.6 (as long
as such action does not materially adversely affect the interests of the Holders
of the Securities), including, but not limited to:
(i) causing the Trust not to be deemed to be
an Investment Company required to be registered under the
Investment Company Act;
(ii) causing the Trust to be classified for
United States Federal income tax purposes as a grantor trust;
(iii) cooperating with the Debenture Issuer
to ensure that the Debentures will be treated as indebtedness
of the Debenture Issuer for United States Federal income tax
purposes;
(o) to take all action necessary to cause all
applicable tax returns and tax information reports that are required to be filed
with respect to the Trust to be duly prepared and filed by the Administrators,
on behalf of the Trust; and
(p) to execute and deliver all documents, instruments
and certificates, exercise all rights and powers, perform all duties, and do all
things for and on behalf of the Trust in all matters necessary or incidental to
the foregoing.
The Administrators must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3 and with the intentions of the parties set
forth in Section 14.3, and the Administrators shall not take any action that is
inconsistent with the purposes and functions of the Trust and intentions of the
parties set forth in Section 3.3 and Section 14.3, respectively.
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Subject to this Section 3.6, the Administrators shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
Any indebtedness, expenses, taxes or other liabilities
incurred by the Administrators pursuant to this Section 3.6 or otherwise
incurred by or on behalf of the Trust, other than obligations of the Trust to
pay to holders of the Trust Preferred Securities the amounts due such holders
pursuant to the terms of the Trust Preferred Securities, shall be paid for in
full or reimbursed, as the case may be, by the Debenture Issuer.
Section 3.7. Prohibition of Actions by the Trust, the
Administrators and the Trustees. The Trust shall not, and neither the
Administrators nor the Trustees (including the Property Trustee) shall cause the
Trust to, engage in any activity other than as required or authorized by this
Declaration. The Trust shall not:
(i) invest any proceeds received by the
Trust from holding the Debentures, but shall distribute all such
proceeds to Holders pursuant to the terms of this Declaration and of
the Securities;
(ii) acquire any assets other than as
expressly provided herein;
(iii) possess Trust property for other than
a Trust purpose;
(iv) make any loans or incur any
indebtedness other than loans represented by the Debentures, execute
mortgages or pledge any of its assets;
(v) possess any power or otherwise act in
such a way as to vary the Trust assets or the terms of the Securities
in any way whatsoever;
(vi) issue any securities or other evidences
of beneficial ownership of, or beneficial interest in, the Trust other
than the Securities; or
(vii) other than as provided in this
Declaration or Annex I, (A) direct the time, method and place of
conducting
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any proceeding with respect to any remedy available to the Debenture
Trustee, or exercising any trust or power conferred upon the Debenture
Trustee with respect to the Debentures, (B) waive any past default that
is waivable under the Indenture, (C) exercise any right to rescind or
annul any declaration that the principal of all the Debentures shall be
due and payable, or (D) consent to any amendment, modification or
termination of the Indenture or the Debentures where such consent shall
be required, unless the Trust shall have received an opinion of counsel
experienced in such matters to the effect that such action will not
cause the Trust to be classified as other than a grantor trust for
United States Federal income tax purposes.
Section 3.8. (a) Powers and Duties of the Property Trustee.
The legal title to the Debentures shall be owned by and held of record in the
name of the Property Trustee in trust for the benefit of the Trust and the
Holders. The right, title and interest of the Property Trustee to the Debentures
shall vest automatically in each Person who may hereafter be appointed as
Property Trustee in accordance with Section 5.7. Such vesting and cessation of
title shall be effective whether or not conveyancing documents with regard to
the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right,
title and interest in the Debentures to the Administrators or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-
interest bearing trust account (the "Property Trustee Account") in the
name of and under the exclusive control of the Property Trustee on
behalf of the Holders and, upon the receipt of payments of funds made
in respect of the Debentures held by the Property Trustee, deposit such
funds into the Property Trustee Account and make payments, and/or
request the Paying Agent (whether or not the Property Trustee also acts
as Paying Agent) to make payments, to the Holders of the Trust
Preferred Securities and Holders of the Common Trust Securities from
the Property Trustee Account in accordance with Section 6.1. Funds in
the Property Trustee Account shall be held uninvested until disbursed
in accordance with this Declaration.
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(ii) engage in such ministerial activities
as shall be necessary or appropriate to effect the repurchase or
redemption of the Securities to the extent the Debentures are redeemed,
repurchased or mature; and (iii) upon written notice of distribution
issued by the Administrators in accordance with the terms of the
Securities, engage in such ministerial activities as shall be necessary
or appropriate to effect the distribution of the Debentures to Holders
of Securities upon the occurrence of certain events.
(d) The Property Trustee shall take all actions and
perform such duties as may be specifically required of the Property Trustee
pursuant to the terms of this Declaration and the Securities.
(e) Subject to Section 3.9(a), the Property Trustee
may take any Legal Action which arises out of or is in connection with an Event
of Default of which a Responsible Officer of the Property Trustee has actual
knowledge or the Property Trustee's duties and obligations under this
Declaration or the Trust Indenture Act. If such Property Trustee shall have
failed to take such Legal Action, the Holders of the Trust Preferred Securities,
to the fullest extent permitted by applicable law, may take such Legal Action,
to the same extent as if such Holders of Trust Preferred Securities held an
aggregate principal amount of Debentures equal to the aggregate liquidation
amount of such Trust Preferred Securities, without first proceeding against the
Property Trustee or the Trust; provided, however, that if an Event of Default
has occurred and is continuing and such event is attributable to the failure of
the Debenture Issuer to pay the principal of or premium, if any, or interest on
the Debentures on the date such principal, premium, if any, or interest is
otherwise payable (after giving effect to any permitted deferral of payment of
such interest), then a Holder of Trust Preferred Securities may directly
institute a proceeding against the Debenture Issuer for enforcement of payment
to such Holder of the principal of or premium, if any, or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Trust Preferred Securities of such Holder (a "Direct Action") on or after
the respective due date specified in the Debentures. In connection with such
Direct Action, the rights of the Holders of the Common Trust Securities will be
subrogated to the rights of such Holder of Trust Preferred Securities (or Units)
to the extent of any payment made by the Debenture Issuer to such Holder of
Trust Preferred Securities (or Units) in such Direct Action; provided, however,
that no such subrogation right may be exercised so long as an Event of Default
has occurred and is continuing. The Holders of Trust Preferred Securities will
not be able to exercise directly any other remedy available to the holders of
the Debentures.
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(f) The Property Trustee shall continue to serve as a
Trustee until either:
(i) the Trust has been completely liquidated
and the proceeds of the liquidation distributed to the Holders pursuant
to the terms of the Securities; or
(ii) a successor Property Trustee has been
appointed and has accepted that appointment in accordance with Section
5.7 (a "Successor Property Trustee").
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default actually known to a Responsible
Officer of the Property Trustee occurs and is continuing, the Property Trustee
shall, for the benefit of Holders, enforce its rights as holder of the
Debentures subject to the rights of the Holders pursuant to this Declaration
(including Annex I) and the terms of the Securities.
(h) The Property Trustee shall be authorized to
undertake any actions set forth in Section 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the
Paying Agent, the Property Trustee may authorize one or more Persons to act as
additional Paying Agents and to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all securities and
any such Paying Agent shall comply or shall be caused to comply with Section
317(b) of the Trust Indenture Act. Any such additional Paying Agent may be
removed by the Property Trustee at any time the Property Trustee remains as
Paying Agent and a successor Paying Agent or additional Paying Agents may be
(but are not required to be) appointed at any time by the Property Trustee.
(j) Subject to this Section 3.8, the Property Trustee
shall have none of the duties, liabilities, powers or the authority of the
Administrators set forth in Section 3.6.
The Property Trustee shall exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Property Trustee shall not take,
nor shall the Sponsor or any
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Administrator direct the Property Trustee to take, any action that is
inconsistent with the purposes and functions of the Trust and intentions of the
parties set out in Section 3.3 and Section 14.3, respectively.
Section 3.9. Certain Duties and Responsibilities of the
Property Trustee. (a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Property Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) of
which a Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) No provision of this Declaration shall be
construed to relieve the Property Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of an Event of
Default and after the curing or waiving of all such Events of Default
that may have occurred:
(A) the duties and obligations
of the Property Trustee shall be determined solely by the
express provisions of this Declaration and in the Securities
and the Property Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Declaration and in the
Securities, and no implied covenants or obligations shall be
read into this Declaration against the Property Trustee; and
(B) in the absence of bad
faith on the part of the Property Trustee, the Property
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions ex pressed
therein, upon any certificates or opinions furnished to the
Property Trustee and conforming to the
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requirements of this Declaration; provided, however, that in
the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to
the Property Trustee, the Property Trustee shall be under a
duty to examine the same to determine whether or not they
conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be
liable for any error of judgment made in good faith by a Responsible
Officer of the Property Trustee, unless it shall be proved that the
Property Trustee was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of not less
than a Majority in liquidation amount of the Trust Preferred Securities
or the Common Trust Securities, as applicable, relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall
require the Property Trustee to expend or risk its own funds or other
wise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms of
this Declaration or indemnity reasonably satisfactory to the Property
Trustee against such risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with
respect to the custody, safe keeping and physical preservation of the
Debentures and the Property Trustee Account shall be to deal with such
property in a similar manner as the Property Trustee deals with similar
property for its own account, subject to the protections and
limitations on liability afforded to the Property Trustee under this
Declaration and the Trust Indenture Act;
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(vi) the Property Trustee shall have no duty
or liability for or with respect to the value, genuineness, existence
or sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be
liable for any interest on any money received by it except as it may
otherwise agree in writing with the Sponsor, and money held by the
Property Trustee need not be segregated from other funds held by it
except in relation to the Property Trustee Account maintained by the
Property Trustee pursuant to Section 3.8(c)(i) and except to the extent
other wise required by law; and
(viii) the Property Trustee shall not be
responsible for monitoring the compliance by the Administrators or the
Sponsor with their respective duties under this Declaration, nor shall
the Property Trustee be liable for any default or misconduct of the
Administrators or the Sponsor.
Section 3.10. Certain Rights of the Property Trustee. Subject
to the provisions of Section 3.9:
(i) the Property Trustee may conclusively
rely and shall be fully protected in acting or refraining from acting
upon any resolution, opinion of counsel, written representation of
Holder or transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document (whether in its original or facsimile form)
believed by it to be genuine and to have been signed, sent or presented
by the proper party or parties;
(ii) any direction or act of the Sponsor or
the Administrators contemplated by this Declaration may be sufficiently
evidenced by an Officers' Certificate;
(iii) whenever in the administration of this
Declaration, the Property Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting any
action hereunder, the Property Trustee (unless other evidence is herein
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specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Sponsor or
the Administrators;
(iv) the Property Trustee shall have no duty
to see to any recording, filing or registration of any instrument
(including any financing or continuation statement or any filing under
tax or securities laws) or any rerecording, refiling or re-registration
thereof;
(v) the Property Trustee may consult with
counsel or other experts of its selection and the advice or opinion of
such counsel and experts with respect to legal matters or advice within
the scope of such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion, such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder, unless such
Holder shall have provided to the Property Trustee security and
indemnity, reasonably satisfactory to the Property Trustee, against the
costs, expenses (including reasonable attorneys' fees and expenses and
the expenses of the Property Trustee's agents, nominees or custodians)
and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Property Trustee provided, that, nothing contained in
this Section 3.10(a)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of
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indebtedness or other paper or document, but the Property Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit at the expense of the Sponsor
and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation;
(viii) the Property Trustee may execute any
of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, custodians, nominees or
attorneys and the Property Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;
(ix) any action taken by the Property
Trustee or its agents hereunder shall bind the Trust and the Holders of
the Securities, and the signature of the Property Trustee or its agents
alone shall be sufficient and effective to perform any such action and
no third party shall be required to inquire as to the authority of the
Property Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its agent's taking
such action;
(x) whenever in the administration of this
Declaration the Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Property Trustee (i) may request
instructions from the Holders which instructions may only be given by
the Holders of the same proportion in liquidation amount of the
Securities as would be entitled to direct the Property Trustee under
the terms of the Securities in respect of such remedy, right or action,
(ii) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (iii) shall be
protected in conclusively relying on or acting in accordance with such
instructions;
(xi) except as otherwise expressly provided
by this Declaration, the Property Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration;
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(xii) the Property Trustee shall not be
liable for any action taken, suffered, or omitted to be taken by it in
good faith, without negligence, and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Declaration; and
(xiii) the Property Trustee shall not be
deemed to have notice of any Default or Event of Default unless a
Responsible Officer of the Property Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a
default is received by the Property Trustee at the Corporate Trust
Office of the Property Trustee, and such notice references the Trust
Preferred Securities and this Declaration.
(b) No provision of this Declaration shall be deemed
to impose any duty or obligation on the Property Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it, in any jurisdiction in which it shall be illegal, or in which the Property
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 3.11. Delaware Trustee. Notwithstanding any other
provision of this Declaration other than Section 5.2, the Delaware Trustee
shall not be entitled to exercise any powers, nor shall the Delaware Trustee
have any of the duties and responsibilities of the Administrators or the
Property Trustee described in this Declaration. Except as set forth in Section
5.2, the Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act and shall
take such actions as are expressly required to be taken by the Delaware Trustee
under the Business Trust Act. In the event the Delaware Trustee shall at any
time be required to take any action or perform any duty hereunder, the Delaware
Trustee shall be entitled to the benefits of Section 3.9(b)(ii) to (viii)
inclusive, and Section 3.10. No implied covenants or obligations shall be read
into this Declaration against the Delaware Trustee.
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Section 3.12. Execution of Documents. Except as otherwise
required by the Business Trust Act or applicable law, any Administrator is
authorized to execute on behalf of the Trust any documents that the
Administrators have the power and authority to execute pursuant to Section 3.6.
Section 3.13. Not Responsible for Recitals or Issuance of
Securities. The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
Section 3.14. Duration of Trust. The Trust, unless dissolved
pursuant to the provisions of Article VIII hereof, shall have existence for
seven years from the dater hereof.
Section 3.15. Mergers. (a) The Trust may not merge or convert
with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or
lease its properties and assets as an entirety or substantially as an entirety
to any Person, except as described in Section 3.15(b) and (c) or Section 3 of
Annex I.
(b) The Trust may, at the request of the Holders of a
Majority in liquidation amount of the Common Trust Securities and without the
consent of the other Holders, the Delaware Trustee or the Property Trustee,
merge or convert with or into, consolidate, amalgamate, or be replaced by, or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to, a trust organized as such under the laws of any
State; provided that:
(i) such successor entity (the "Successor
Entity") either:
(A) expressly assumes all of
the obligations of the Trust with respect to the Trust
Preferred Securities; or
(B) substitutes for the Trust
Preferred Securities other securities having substantially the
same terms as the Trust Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the
same as the Trust Preferred Securities
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rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a
trustee of the Successor Entity that possesses the same powers and
duties as the Property Trustee as the Holder of the Debentures;
(iii) the Successor Securities are listed,
or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or other organization on
which the Trust Preferred Securities are then listed or quoted, if any;
(iv) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause
the Trust Preferred Securities (including any Successor Securities) or
Units to be downgraded by any nationally recognized statistical rating
organization, if then so rated;
(v) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders
of Trust Preferred Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of such
Holders' interests in the new entity);
(vi) such Successor Entity has a purpose
substantially identical to that of the Trust;
(vii) prior to such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Sponsor has received an opinion of an independent counsel to
the Trust experienced in such matters to the effect that:
(A) such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and
privileges of the Holders of Trust Preferred Securities
(including any Successor Securities) in any material respect
(other than with respect to any dilution of the Holders'
interest in the new entity);
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(B) following such merger,
conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Trust nor the
Successor Entity will be required to register as an In
vestment Company; and
(C) following such merger,
conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Trust or the Successor
Entity will continue to or will be classified as a grantor
trust for United States Federal income tax purposes.
(viii) the Sponsor or any permitted
successor or assignee owns all of the common securities of such
Successor Entity and guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided
by the Trust Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall
not, except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge or convert with or into, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to, any other entity or permit any
other entity to consolidate, amalgamate, merge or convert with or into, or
replace it if such consolidation, amalgamation, merger, conversion, replacement,
conveyance, transfer or lease would cause the Trust or the Successor Entity to
be classified as other than a grantor trust for United States Federal income tax
purposes.
ARTICLE IV
SPONSOR
Section 4.1. Sponsor's Purchase of Common Trust Securities. At
the Closing Time, the Sponsor will purchase all of the Common Trust Securities
then issued by the Trust, in an amount at least equal to 3% of the total capital
of the Trust, at the same time as (and giving effect to) the Trust Preferred
Securities are issued and sold.
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Section 4.2. Responsibilities of the Sponsor. In connection
with the issue and sale of the Trust Preferred Securities, the Sponsor shall
have the exclusive right and responsibility to engage in the following
activities (and any actions taken by the Sponsor in furtherance of the following
prior to the date of this Declaration are hereby ratified and confirmed in all
respects):
(a) to prepare and file with the Commission and to
execute, in the case of the Registration Statements, on behalf of the Trust, (a)
the 1933 Act Registration Statement, including pre-effective or post-effective
amendments to such registration statement and any and all amendments to such
registration statement filed pursuant to Rule 462(b) promulgated under the
Securities Act, relating to the registration under the Securities Act of the
Securities, (b) any preliminary prospectus or prospectus or supplement thereto
relating to the Securities required to be filed pursuant to the Securities Act,
and (c) the 1934 Act Registration Statement (including all pre-effective and
post-effective amendments thereto) relating to the registration of the
Securities of the Trust under the Exchange Act;
(b) to determine the jurisdictions in which to take
appropriate action to qualify or register for sale all or part of the Trust
Preferred Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be executed and filed by the
Trust, as the Sponsor deems necessary or advisable to register the Securities
and in order to comply with the securities or "Blue Sky" laws of any applicable
jurisdiction;
(c) to prepare, execute and file a listing application
and all other applications, statements, certificates, agreements and other
instruments as shall be necessary or desirable to permit the Trust Preferred
Securities and/or the Units to trade or be quoted or listed in or on the New
York Stock Exchange or any other securities exchange, quotation system or the
Nasdaq National Market;
(d) to negotiate the terms of, and execute, the
Underwriting Agreement and the Subscription Agreements, and to enter into and
execute and deliver and perform the same on behalf of the Trust; and
(e) notwithstanding anything to the contrary contained
herein, the Trust shall be authorized to issue and sell the Trust Preferred
Securities at an offering price per Trust Preferred Securities to be determined
by the Sponsor in its sole and absolute discretion, including, without
limitation, at an offering price that is
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less than the liquidation amount of $41.50 per Trust Preferred Securities (the
"Liquidation Amount"), which offering price shall be specified in the
Prospectus relating to the Securities, and the Common Trust Securities shall be
issued and sold at an offering price per Common Trust Security that is equal to
the offering price per Trust Preferred Securities.
Section 4.3. Right to Proceed. The Sponsor acknowledges the
rights of the Holders of Trust Preferred Securities, in the event that a failure
of the Trust to pay Distributions on the Trust Preferred Securities is
attributable to the failure of the Debenture Issuer to pay interest or principal
on the Debentures, to institute a proceeding directly against the Debenture
Issuer for enforcement of its payment obligations on the Debentures.
ARTICLE V
TRUSTEES AND ADMINISTRATORS
Section 5.1. Number of Trustees: Appointment of Co-Trustee.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities,
the Sponsor may, by written instrument, increase or decrease the number of
Trustees and Administrators; and
(b) after the issuance of any Securities, the number
of Trustees and Administrators may be increased or decreased by vote of the
Holders of a Majority in liquidation amount of the Common Trust Securities
voting as a class at a meeting of the Holders of the Common Trust Securities;
provided, however, that, there shall be a Delaware Trustee if required by
Section 5.2; and there shall be one Trustee who shall be the Property Trustee,
and such Trustee may also serve as Delaware Trustee if it meets the applicable
requirements. Notwithstanding the above, unless an Event of Default shall have
occurred and be continuing, at any time or times, for the purpose of meeting the
legal requirements of any jurisdiction in which any part of the Trust's property
may at the time be located, the Holders of a Majority in liquidation amount of
the Common Trust Securities acting as a class at a meeting of the Holders of the
Common Trust Securities, and the Administrators shall have power to appoint one
or more persons either to act as a co-trustee, jointly with the Property
Trustee, of all or any part of the Trust's property, or to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument
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of appointment, and to vest in such person or persons in such capacity any
property, title, right or power deemed necessary or desirable, subject to the
provisions of this Declaration. In case an Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make any such
appointment of a co-trustee.
Section 5.2. Delaware Trustee. If required by the Business
Trust Act, one Trustee (the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware, and otherwise meets the
requirements of applicable law; provided that, if the Property Trustee has its
principal place of business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Property Trustee shall also be the
Delaware Trustee and Section 3.11 shall have no application.
Section 5.3. Property Trustee; Eligibility. (a) There shall at
all times be one Trustee (the "Property Trustee") which shall act as Property
Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a Person organized and doing
business under the laws of the United States of America or any
State or Territory thereof or of the District of Columbia, or
a Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of
Columbia authority. If such Person publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority
referred to above, then for the purposes of this Section
5.3(a)(ii), the combined capital and surplus of such Person
shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.
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(b) If at any time the Property Trustee shall cease to
be eligible to so act under Section 5.3(a), the Property Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.7(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common Trust
Securities (as if it were the obligor referred to in Section 310(b) of the Trust
Indenture Act) shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
(d) The Trust Preferred Securities Guarantee shall be
deemed to be specifically described in this Declaration for purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
Section 5.4. Certain Qualifications of Administrators and
Delaware Trustee Generally. Each Administrator and the Delaware Trustee (unless
the Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
Section 5.5. Administrators. The initial Administrators shall
be:
Alan M. Wright
Thomas A. McNish
c/o CMS Energy Corporation
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, MI 48126
Telephone: (313) 436-9200
Telecopier: (313) 436-9258
(a) Except as expressly set forth in this Declaration
and except if a meeting of the Administrators is called with respect to any
matter over which the Administrators have power to act, any power of the
Administrators may be exercised by, or with the consent of, any one such
Administrator.
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(b) An Administrator may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents which the
Administrators have power and authority to cause the Trust to execute pursuant
to Section 3.6. (c)The Holders of a Majority in liquidation amount of the Common
Trust Securities may appoint or remove any Administrator without cause at any
time.
(c) An Administrator appointed to office shall hold
office until his successor shall have been appointed or until his death, removal
or resignation. Any Administrator may resign from office (without need for prior
or subsequent accounting) by an instrument in writing signed by the
Administrator and delivered to the Sponsor and the Property Trustee, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein.
Section 5.6. Delaware Trustee. The initial Delaware Trustee
shall be:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, DE 19711
Attention:
Telecopier:
Telephone:
Section 5.7. Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b) and to Section 6(b) of Annex I hereto, Trustees
may be appointed or removed without cause at any time:
(i) until the issuance of any Securities, by
written instrument executed by the Sponsor;
(ii) unless an Event of Default shall have
occurred and be continuing after the issuance of any Securities, by
vote of the Holders of a Majority in liquidation amount of the Common
Trust Securities voting as a class at a meeting of the Holders of the
Common Trust Securities; and
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(iii) if an Event of Default shall have
occurred and be continuing after the issuance of the Securities, with
respect to the Property Trustee or the Delaware Trustee only, by vote
of Holders of a Majority in liquidation amount of the Trust Preferred
Securities voting as a class at a meeting of Holders of the Trust
Preferred Securities.
(b) (i) The Trustee that acts as Property Trustee
shall not be removed in accordance with Section 5.7(a) until a Successor
Property Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Property Trustee and delivered to the
Administrators and the Sponsor; and
(ii) the Trustee that acts as Delaware
Trustee shall not be removed in accordance with Section 5.7(a) until a
successor Trustee possessing the qualifications to act as Delaware
Trustee under Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has
been appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Administrators and the Sponsor.
(c) A Trustee appointed to office shall hold office
until his successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the Sponsor and the Trust, which resignation shall take effect upon
such delivery or upon such later date as is specified therein; provided,
however, that:
(i) No such resignation of the Trustee that
acts as the Property Trustee shall be effective until the first to
occur of the following:
(A) a Successor Property
Trustee has been appointed and has accepted such appointment
by instrument executed by such Successor Property Trustee and
delivered to the Trust, the Sponsor and the resigning
Property Trustee; or
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(B) the assets of the Trust
have been completely liquidated and the proceeds thereof
distributed to the Holders of the Securities; and
(ii) no such resignation of the Trustee that
acts as the Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted such appointment
by instrument executed by such Successor Delaware Trustee and delivered
to the Trust, the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Trust Securities shall
use their best efforts to promptly appoint a Successor Delaware Trustee or
Successor Property Trustee, as the case may be, if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.7.
(e) If no Successor Property Trustee or Successor
Delaware Trustee shall have been appointed and accepted appointment as provided
in this Section 5.7 within 60 days after delivery of an instrument of
resignation or removal, the Property Trustee or Delaware Trustee resigning or
being removed, as applicable, may petition, at the expense of the Sponsor, any
court of competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be
liable for the acts or omissions to act of any Successor Property Trustee or
Successor Delaware Trustee, as the case may be.
Section 5.8. Vacancies among Trustees. If a Trustee ceases to
hold office for any reason and the number of Trustees is not reduced pursuant to
Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1,
a vacancy shall occur. A resolution certifying the existence of such vacancy by
the Trustees or, if there are more than two, a majority of the Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
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Section 5.9. Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee shall not operate to dissolve,
terminate or annul the Trust. Whenever a vacancy in the number of Trustees shall
occur, until such vacancy is filled by the appointment of a Trustee in
accordance with Section 5.7, the Property Trustee shall have all the powers
granted to the Trustees and shall discharge all the duties imposed upon the
Trustees by this Declaration.
Section 5.10. Meetings. If there is more than one
Administrator, meetings of the Administrators shall be held from time to time
upon the call of any Administrator. Regular meetings of the Administrators may
be held at a time and place fixed by resolution of the Administrators. Notice of
any in-person meetings of the Administrators shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before such meeting. Notice of any
telephonic meetings of the Administrators or any committee thereof shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before a meeting. Notices
shall contain a brief statement of the time, place and anticipated purposes of
the meeting. The presence (whether in person or by telephone) of an
Administrator at a meeting shall constitute a waiver of notice of such meeting
except where an Administrator attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting has
not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Administrators may be taken at a meeting by vote
of a majority of the Administrators present (whether in person or by telephone)
and eligible to vote with respect to such matter, provided that a Quorum is
present, or without a meeting by the unanimous written consent of the
Administrators. In the event there is only one Administrator, any and all action
of such Administrator shall be evidenced by a written consent of such
Administrator.
Section 5.11. (a) Delegation of Power. Any Trustee or
Administrator may, by power of attorney consistent with applicable law, delegate
to any other natural person over the age of 21 his or her power for the purpose
of executing any documents contemplated in Section 3.6; and
(b) the Trustees shall have power to delegate from
time to time to such of their number or to other Persons the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Trustees or otherwise as the Trustees may deem expedient, to
the extent such
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delegation is not prohibited by applicable law or contrary to the provisions of
the Trust, as set forth herein.
Section 5.12. Merger, Conversion, Consolidation or Succession
to Business. Any Person into which the Property Trustee or the Delaware Trustee,
as the case may be, that is not a natural person, may be merged or converted or
with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Property Trustee or the Delaware
Trustee, as the case may be, shall be a party, or any Person succeeding to all
or substantially all the corporate trust business of the Property Trustee or the
Delaware Trustee, as the case may be, shall be the successor of the Property
Trustee or the Delaware Trustee, as the case may be, hereunder, provided such
Person shall be otherwise qualified and eligible under this Article, without the
execution or filing (except to the extent required under the Business Trust Act)
of any paper or any further act on the part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
Section 6.1. Distributions. Each Holder shall receive
Distributions pro rata in accordance with the applicable terms of such Holder's
Securities. If and to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Sums (as defined in the Indenture)), premium and/or principal on the
Debentures held by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property Trustee shall and is directed, to the extent
funds are available for that purpose, to make a distribution (a "Distribution")
of the Payment Amount to Holders in accordance with the respective terms of the
Securities held by them. In the event there is any money or other property held
by or for the Trust that is not accounted for hereunder, such property shall be
distributed pro rata among the Holders of Securities on the next Distribution
Date.
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ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1. General Provisions Regarding Securities. (a) The
Administrators shall on behalf of the Trust issue one class of preferred
securities representing undivided beneficial ownership interests in the assets
of the Trust having such terms as are set forth in Annex I (the "Trust Preferred
Securities") and one class of common securities representing undivided
beneficial ownership interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Trust Securities"). The Trust shall issue
no securities or other interests in the assets of the Trust other than the Trust
Preferred Securities and the Common Trust Securities and the aggregate
liquidation amount of all Securities issued by the Trust and outstanding at any
time shall not exceed $356,707,481.50.
(b) The Trust Preferred Securities rank pari passu,
and payment thereon shall be made pro rata, with the Common Trust Securities
except that, where an Event of Default specified in clause (1), (2) or (3) of
the definition of Event of Default in the Indenture has occurred and is
continuing, the rights of Holders of the Common Trust Securities to payment in
respect of Distributions and payments upon liquidation, redemption, repurchase
and otherwise are subordinated to the rights to payment of the Holders of the
Trust Preferred Securities.
(c) The consideration received by the Trust for the
issuance of the Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(d) Upon issuance of the Trust Preferred Securities as
provided in this Declaration, the Trust Preferred Securities so issued shall be
deemed to be validly issued, fully paid and non-assessable.
(e) Every Person that becomes a Holder or a Trust
Preferred Securities Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration and the Trust Preferred Securities
Guarantee.
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Section 7.2. Execution And Authentication. (a) The Securities
shall be signed on behalf of the Trust by one or more Administrators. Such
signature may be the manual or facsimile signature of any Administrator. In case
any Administrator of the Trust who shall have signed any of the Securities shall
cease to be such Administrator before the Securities so signed shall be
delivered by the Trust, such Securities nevertheless may be delivered as though
the person who signed such Securities had not ceased to be such Administrator;
and any Securities may be signed on behalf of the Trust by such persons who, at
the actual date of execution of such Security, shall be the Administrators of
the Trust, although at the date of the execution and delivery of the Declaration
any such person was not such an Administrator.
(b) A Common Trust Security shall be deemed validly
issued upon execution by an Administrator without any act of the Property
Trustee. A Trust Preferred Securities shall not be valid until authenticated by
the manual signature of an authorized signatory of the Property Trustee. Such
signature shall be conclusive evidence that the Trust Preferred Securities have
been authenticated under this Declaration. Upon a written order of the Trust
signed by one Administrator, the Property Trustee shall authenticate the Trust
Preferred Securities for original issue. The Property Trustee may appoint an
authenticating agent acceptable to the Trust to authenticate Trust Preferred
Securities. An authenticating agent may authenticate Trust Preferred Securities
whenever the Property Trustee may do so. Each reference in this Declaration to
authentication by the Property Trustee includes authentication by such agent. An
authenticating agent has the same rights as the Property Trustee hereunder with
respect to the Sponsor or an Affiliate. The aggregate number of Trust Preferred
Securities outstanding at any time shall not exceed the number set forth in the
Terms in Annex I hereto except as provided in Section 7.6.
Section 7.3. Form And Dating. (a) The Trust Preferred
Securities and the Property Trustee's certificate of authentication shall be
substantially in the form of Exhibit A-1 and the Common Trust Securities shall
be substantially in the form of Exhibit A-2, each of which is hereby
incorporated in and expressly made a part of this Declaration. Certificates
representing the Securities may be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Administrators,
as evidenced by their execution thereof. The Securities may have letters, CUSIP
or other numbers, notations or other marks of identification or designation and
such legends or endorsements required by law, stock exchange rule, agreements to
which the Trust is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Trust). The Trust at the
direction of the Sponsor shall furnish any such legend not contained in Exhibit
A- 1 to the Property Trustee in writing. Each Trust Preferred Securities shall
be dated
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the date of its authentication. The terms and provisions of the Securities set
forth in Annex I and the forms of Securities set forth in Exhibits A-1 and A-2
are part of the terms of this Declaration and to the extent applicable, the
Property Trustee and the Sponsor, by their execution and delivery of this
Declaration, expressly agree to such terms and provisions and to be bound
thereby. The Trust Preferred Securities shall be dated the date of their
authentication.
(b) Global Securities. If no Trust Preferred
Securities constitute Pledged Securities (as defined in the Master Unit
Agreement), the Trust Preferred Securities will be represented in the form of
one or more permanent global securities in definitive, fully registered form
with the global legend set forth in Exhibit A-1 hereto (a "Global Security"),
which shall be deposited on behalf of the holders of the Units with the Property
Trustee, at its New York office, as custodian for the Clearing Agency, and
registered in the name of the Clearing Agency or a nominee of the Clearing
Agency, duly executed by the Trust and authenticated by the Property Trustee as
hereinafter provided. The number of Trust Preferred Securities represented by
the Global Security may from time to time be increased or decreased by
adjustments made on the records of the Property Trustee and the Clearing Agency
or its nominee as hereinafter provided.
(c) Book-Entry Provisions. This Section 7.3(c) shall
apply only to the Global Security and such other Trust Preferred Securities in
global form as may be authorized by the Trust to be deposited with or on behalf
of the Clearing Agency. The Trust shall execute and the Property Trustee shall,
in accordance with this Section 7.3, authenticate and make available for
delivery initially one or more Global Securities that (i) shall be registered in
the name of Cede & Co. or other nominee of such Clearing Agency and (ii) shall
be delivered by the Property Trustee to such Clearing Agency or pursuant to such
Clearing Agency's written instructions or, if no such written instructions are
received by the Property Trustee, held by the Property Trustee as custodian for
the Clearing Agency.
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Declaration with respect to any
Global Security held on their behalf by the Clearing Agency or by the Property
Trustee as the custodian of the Clearing Agency or under such Global Security,
and the Clearing Agency may be treated by the Trust, the Property Trustee and
any agent of the Trust or the Property Trustee as the absolute owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Trust, the Property Trustee or any agent of the
Trust or the Property Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Clearing Agency or
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impair, as between the Clearing Agency and its Participants, the operation of
customary practices of such Clearing Agency governing the exercise of the
rights of a holder of a beneficial ownership interest in any Global Security.
(d) Definitive Trust Preferred Securities. Except as
provided in Section 7.9, owners of beneficial ownership interests in a Global
Security will not be entitled to receive physical delivery of certificated Trust
Preferred Securities ("Definitive Trust Preferred Securities").
Section 7.4. Registrar, Paying Agent And Exchange Agent. The
Trust shall maintain in Dearborn, Michigan or at the principal offices of the
Property Trustee, (i) an office or agency where Trust Preferred Securities may
be presented for registration of transfer ("Registrar") and (ii) an office or
agency where Trust Preferred Securities may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Trust Preferred Securities
and of their transfer. The Property Trustee may appoint the Registrar and the
Paying Agent and may appoint one or more co-registrars and one or more
additional paying agents in such other locations as it shall determine. The term
"Registrar" includes any additional registrar and the term "Paying Agent"
includes any additional paying agent. The Property Trustee may change any Paying
Agent or Registrar without prior notice to any Holder. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Property
Trustee (if not the Paying Agent) and the Administrators. The Trust shall notify
the Property Trustee of the name and address of any Agent not a party to this
Declaration. In the event that the Property Trustee shall no longer be the
Paying Agent or the Registrar, the Administrators shall appoint another entity
as Registrar or Paying Agent. The Trust or any of its Affiliates may act as
Paying Agent or Registrar. The Trust shall act as Paying Agent and Registrar for
the Common Trust Securities.
The Property Trustee will initially act as Registrar and
Paying Agent for the Trust Preferred Securities.
Section 7.5. Paying Agent to Hold Money in Trust. The Trust
shall require each Paying Agent other than the Property Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders or
the Property Trustee all money held by the Paying Agent for the payment of
liquidation amounts or Distributions on the Securities, and will notify the
Property Trustee if there are insufficient funds for such purpose. While any
such insufficiency continues, the Property Trustee may require a Paying Agent to
pay all money held by it to the Property Trustee. The Trust at any time may
require a Paying Agent to pay all money held by it to the Property Trustee and
to account for any money disbursed by it. Upon payment over
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to the Property Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the money. If the
Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.
Section 7.6. Replacement Securities. If a Holder claims that a
certificate evidencing the Securities owned by it has been lost, destroyed or
wrong fully taken or if such certificate is mutilated and is surrendered to the
Trust, or in the case of a certificate evidencing Trust Preferred Securities, to
the Property Trustee, and the Property Trustee shall receive evidence to its
satisfaction of the destruction, loss or theft of such certificate and there
shall be delivered to the Property Trustee and the Administrators such security
or indemnity as may be required by them to keep each of them harmless, then, in
the absence of notice that such certificate shall have been acquired by a
protected purchaser, an Administrator on behalf of the Trust shall execute (and
in the case of a certificate evidencing Trust Preferred Securities, the Property
Trustee shall authenticate) and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen certificate, a new certificate of like
denomination. In connection with the issuance of any new certificate under this
Section 7.6, the Registrar or the Administrators may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate certificate issued pursuant to this
Section 7.6 shall constitute conclusive evidence of or ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen or
destroyed certificate shall be found at any time.
Section 7.7. Outstanding Trust Preferred Securities. The Trust
Preferred Securities outstanding at any time are all the Trust Preferred
Securities authenticated by the Property Trustee except for those canceled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding. If a Trust Preferred Securities is replaced paid or
purchased, pursuant to Section 7.6 or Section 7.10, it ceases to be outstanding
unless the Property Trustee receives proof satisfactory to it that the replaced
Trust Preferred Securities is held by a protected purchaser. If Trust Preferred
Securities are considered paid in accordance with the terms of this Declaration,
they cease to be outstanding and Distributions on them shall cease to
accumulate. A Trust Preferred Securities does not cease to be outstanding
because one of the Trust, the Sponsor or an Affiliate of the Sponsor holds the
Security.
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Section 7.8. Trust Preferred Securities in Treasury. In
determining whether the Holders of the required amount of Securities have
concurred in any direction, waiver or consent, Trust Preferred Securities owned
by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be,
shall be disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be fully protected in
relying on any such direction, waiver or consent, only Securities which a
Responsible Officer of the Property Trustee actually knows are so owned shall be
so disregarded.
Section 7.9. Temporary Securities. (a) Until definitive
securities are ready for delivery, the Trust may prepare and, in the case of the
Trust Preferred Securities, the Property Trustee shall authenticate temporary
securities. Temporary Securities shall be substantially in the form of
definitive securities but may have variations that the Trust considers
appropriate for temporary securities. Without unreasonable delay, the Trust
shall prepare and, in the case of the Trust Preferred Securities, the Property
Trustee shall authenticate definitive securities in exchange for temporary
securities.
(b) A Global Security deposited with the Clearing
Agency or with the Property Trustee as custodian for the Clearing Agency
pursuant to Section 7.3 shall be transferred to the beneficial owners thereof in
the form of Definitive Trust Preferred Securities only if such transfer complies
with Section 9.2 and (i) the Clearing Agency notifies the Sponsor that it is
unwilling or unable to continue as Clearing Agency for such Global Security or
if at any time such Clearing Agency ceases to be a "clearing agency" registered
under the Exchange Act and a clearing agency is not appointed by the Sponsor
within 90 days of such notice, (ii) a Default or an Event of Default has
occurred and is continuing, or (iii) the Trust at its sole discretion elects to
cause the issuance of Definitive Trust Preferred Securities.
(c) Any Global Security that is transferable to the
beneficial owners thereof in the form of Definitive Trust Preferred Securities
pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to the
Property Trustee to be so transferred, in whole or from time to time in part,
without charge, and the Property Trustee shall authenticate and make available
for delivery, upon such transfer of each portion of such Global Security, an
equal aggregate liquidation amount of Securities of authorized denominations in
the form of Definitive Trust Preferred Securities. Any portion of a Global
Security transferred pursuant to this Section shall be registered in such names
as the Clearing Agency shall direct.
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(d) Subject to the provisions of Section 7.9(c), the
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Participants and Persons that may hold interests through
Participants, to take any action which such Holder is entitled to take under
this Declaration or the Securities.
(e) In the event of the occurrence of any of the
events specified in Section 7.9(b), the Trust will promptly make available to
the Property Trustee a reasonable supply of Definitive Trust Preferred
Securities in fully registered form without distribution coupons.
Section 7.10. Cancellation. The Trust at any time may deliver
Trust Preferred Securities to the Property Trustee for cancellation. The
Registrar and Paying Agent shall forward to the Property Trustee any Trust
Preferred Securities surrendered to them for registration of transfer,
redemption, repurchase, exchange or payment. The Property Trustee shall promptly
cancel all Trust Preferred Securities surrendered for registration of transfer,
redemption, repurchase, exchange, payment, replacement or cancellation and shall
dispose of canceled Trust Preferred Securities in its customary manner. The
Trust may not issue new Trust Preferred Securities to replace Trust Preferred
Securities that it has paid or that have been delivered to the Property Trustee
for cancellation or that any holder has exchanged.
Section 7.11. CUSIP Numbers. The Trust in issuing the Trust
Preferred Securities may use "CUSIP" numbers (if then generally in use), and, if
so, the Property Trustee shall use "CUSIP" numbers in notices as a convenience
to Holders of Trust Preferred Securities; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Trust Preferred Securities or as contained in any such
notice and that reliance may be placed only on the other identification numbers
printed on the Trust Preferred Securities, and any such notice shall not be
affected by any defect in or omission of such numbers. The Sponsor will promptly
notify the Property Trustee of any change in the "CUSIP" numbers.
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ARTICLE VIII
DISSOLUTION OF TRUST
Section 8.1. Dissolution of Trust. (a) The Trust shall
automatically dissolve:
(i) upon a Bankruptcy Event of the Sponsor;
(ii) upon the filing of a certificate of
dissolution or liquidation or its equivalent with respect to the
Sponsor; or the revocation of the Sponsor's charter and the expiration
of 90 days after the date of revocation without a reinstatement
thereof;
(iii) after satisfaction of liabilities to
creditors of the Trust as required by applicable law, following the
distribution of a Like Amount of the Debentures to the Holders,
provided that the Property Trustee has received written notice from the
Sponsor, as holder of all of the issued and outstanding Common Trust
Securities directing the Property Trustee, to dissolve the Trust (which
direction is optional, and except as otherwise expressly provided
below, within the discretion of the Sponsor);
(iv) upon the entry of a decree of judicial
dissolution of the Trust by a court of competent jurisdiction;
(v) when all of the Securities shall have
been called for redemption and the amounts necessary for redemption
thereof shall have been paid to the Holders in accordance with the
terms of the Securities;
(vi) upon the repayment of the Debentures or
at such time as no Debentures are outstanding; or
(vii) the expiration of the term of the
Trust provided in Section 3.14.
(b) As soon as is practicable after the occurrence of
an event referred to in Section 8.1(a) or Section 8.1(c), and after the
completion of the winding up of the Trust's affairs, the Administrators shall
file a certificate of cancellation with the Secretary of State of the State of
Delaware.
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(c) Subject to the conditions set forth in the
Declaration and the Indenture, the Sponsor may at any time direct the Property
Trustee to dissolve the Trust and, after satisfaction of liabilities to
creditors of the Trust as required by applicable law, cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust.
(d) The provisions of Section 3.9, Article X and
Section 11.2 shall survive the termination of the Trust and the registration or
removal of any Trustee.
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1. (a) Transfer of Securities. Securities may only
be transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration and the terms of the Securities. Any transfer or
purported transfer of any Security not made in accordance with this Declaration
shall be null and void.
(b) Subject to this Article IX, Trust Preferred
Securities may only be transferred, in whole or in part, in accordance with the
terms and conditions set forth in this Declaration. To the fullest extent
permitted by law, any transfer or purported transfer of any security not made in
accordance with this Declaration shall be null and void.
(c) The Sponsor may not transfer the Common Trust
Securities; provided, however, that any permitted successor of the Sponsor under
the Indenture may succeed to the Sponsor's ownership of the Common Trust
Securities.
(d) The Registrar shall provide for the registration
of Securities and of the transfer of Securities, which will be effected without
charge but only upon payment (with such indemnity as the Registrar may require)
in respect of any tax or other governmental charges that may be imposed in
relation to it. Upon surrender for registration of transfer of any Securities,
the Registrar shall cause one or more new Securities to be issued in the name of
the designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder's attorney duly authorized in writing. Each Security surrendered for
registration of transfer shall be canceled by the Property Trustee. A
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transferee of a Security shall be entitled to the rights and subject to the
obligations of a Holder hereunder upon the receipt by such transferee of a
Security. By acceptance of a Security, each transferee shall be deemed to have
agreed to be bound by this Declaration.
Section 9.2. Transfer Procedures And Restrictions. (a)
Transfer and Exchange of Definitive Trust Preferred Securities. When Definitive
Trust Preferred Securities are presented to the Registrar or co-Registrar:
(i) to register the transfer of such
Definitive Trust Preferred Securities; or (ii) to exchange such
Definitive Trust Preferred Securities which became mutilated,
destroyed, defaced, stolen or lost, for an equal number of Definitive
Trust Preferred Securities, the Registrar or co-registrar shall
register the transfer or make the exchange as requested; provided,
however, that the Definitive Trust Preferred Securities surrendered for
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Trust and
the Registrar or co-registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing.
(b) Transfer of a Definitive Trust Preferred
Securities for a Beneficial Ownership Interest in a Global Security. A
Definitive Trust Preferred Securities may not be exchanged for a beneficial
ownership interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Property Trustee of a
Definitive Trust Preferred Securities, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Property
Trustee, together with written instructions directing the Property Trustee to
make, or to direct the Clearing Agency to make, an adjustment on its books and
records with respect to the appropriate Global Security to reflect an increase
in the number of the Trust Preferred Securities represented by such Global
Security, then the Property Trustee shall cancel such Definitive Trust Preferred
Securities and cause, or direct the Clearing Agency to cause, the aggregate
number of Trust Preferred Securities represented by the appropriate Global
Security to be increased accordingly. If no Global Securities are then
outstanding, the Trust shall issue and the Property Trustee shall authenticate,
upon written order of any Administrator, an appropriate number of Trust
Preferred Securities in global form.
(c) Transfer and Exchange of Global Securities.
Subject to Section 9.2(d), the transfer and exchange of Global Securities or
beneficial ownership
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interests therein shall be effected through the Clearing Agency, in accordance
with this Declaration (including applicable restrictions on transfer set forth
herein, if any) and the procedures of the Clearing Agency therefor.
(d) Transfer of a Beneficial Ownership Interest in a
Global Security for a Definitive Trust Preferred Securities.
(i) If none of the Trust Preferred
Securities constitute Pledged Securities, and are thereafter
represented by one or more permanent Global Securities in definitive,
fully registered form, any Person having a beneficial ownership
interest in a Global Security may upon request, but only upon 20 days
prior notice to the Property Trustee, and if accompanied by the
information specified below, exchange such beneficial ownership
interest for a Definitive Trust Preferred Securities representing the
same number of Trust Preferred Securities. Upon receipt by the Property
Trustee from the Clearing Agency or its nominee on behalf of any Person
having a beneficial ownership interest in a Global Security of written
instructions or such other form of instructions as is customary for the
Clearing Agency or the Person designated by the Clearing Agency as
having such a beneficial ownership interest in a Trust Preferred
Securities and a certification from the transferor (in a form
substantially similar to that attached hereto as the "Form of
Assignment" in Exhibit A-1), which may be submitted by facsimile, then
the Property Trustee will cause the aggregate number of Trust Preferred
Securities represented by Global Securities to be reduced on its books
and records and, following such reduction, the Trust will execute and
the Property Trustee will authenticate and make available for delivery
to the transferee a Definitive Trust Preferred Securities.
(ii) Definitive Trust Preferred Securities
issued in exchange for a beneficial ownership interest in a Global
Security pursuant to this Section 9.2(d) shall be registered in such
names and in such authorized denominations as the Clearing Agency,
pursuant to instructions from its Participants or indirect participants
or otherwise, shall instruct the Property Trustee in writing. The
Property Trustee shall deliver such Trust Preferred Securities to the
Persons in whose names such Trust Preferred Securities are so
registered in accordance with such instructions of the Clearing Agency.
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(e) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in subsection (f) of this Section 9.2), a Global
Security may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or another nominee of the Clearing Agency or by
the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
(f) Authentication of Definitive Trust Preferred
Securities. If at any time:
(i) there occurs a Default or an Event of
Default which is continuing, or
(ii) the Trust, at the direction of the
Sponsor, as Holder of all of the issued and outstanding Trust Preferred
Securities, notifies the Property Trustee in writing that it elects to
cause the issuance of Definitive Trust Preferred Securities under this
Declaration, then the Trust will execute, and the Property Trustee,
upon receipt of a written order of the Trust signed by one
Administrator requesting the authentication and delivery of Definitive
Trust Preferred Securities to the Persons designated by the Trust, will
authenticate and make available for delivery Definitive Trust Preferred
Securities, equal in number to the number of Trust Preferred Securities
represented by the Global Securities, in exchange for such Global
Securities.
(g) Cancellation or Adjustment of Global Security. At
such time as all beneficial ownership interests in a Global Security have either
been exchanged for Definitive Trust Preferred Securities to the extent permitted
by this Declaration or redeemed, repurchased or canceled in accordance with the
terms of this Declaration, such Global Security shall be returned to the
Clearing Agency for cancellation or retained and canceled by the Property
Trustee. At any time prior to such cancellation, if any beneficial ownership
interest in a Global Security is ex changed for Definitive Trust Preferred
Securities, Trust Preferred Securities represented by such Global Security shall
be reduced and an adjustment shall be made on the books and records of the
Property Trustee (if it is then the custodian for such Global Security) with
respect to such Global Security, by the Property Trustee or the Securities
custodian, to reflect such reduction.
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(h) Obligations with Respect to Transfers and
Exchanges of Trust Preferred Securities.
(i) To permit registrations of transfers and
exchanges, an Administrator on behalf of the Trust shall execute and
the Property Trustee shall authenticate Definitive Trust Preferred
Securities and Global Securities at the Registrar's or co-Registrar's
request in accordance with the terms of this Declaration.
(ii) Registrations of transfers or exchanges
will be effected without charge, but only upon payment (with such
indemnity as the Trust or the Sponsor may require) in respect of any
tax or other governmental charge that may be imposed in relation to it.
(iii) The Registrar or co-registrar shall
not be required to register the transfer of or exchange of Trust
Preferred Securities during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of
Trust Preferred Securities and ending at the close of business on the
day of such mailing.
(iv) Prior to the due presentation for
registrations of transfer of any Trust Preferred Securities, the Trust,
the Property Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Trust
Preferred Securities is registered as the absolute owner of such Trust
Preferred Securities for the purpose of receiving Distributions on such
Trust Preferred Securities and for all other purposes whatsoever, and
none of the Trust, the Property Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice to the
contrary.
(v) All Trust Preferred Securities issued
upon any transfer or exchange pursuant to the terms of this Declaration
shall evidence the same security and shall be entitled to the same
benefits under this Declaration as the Trust Preferred Securities
surrendered upon such transfer or exchange.
(i) No Obligation of the Property Trustee. The
Property Trustee shall have no responsibility or obligation to any beneficial
owner of a Global Security, a Participant in the Clearing Agency or other Person
with respect to the
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accuracy of the records of the Clearing Agency or its nominee or of any
Participant thereof, with respect to any beneficial ownership interest in the
Trust Preferred Securities or with respect to the delivery to any Participant,
beneficial owner or other Person (other than the Clearing Agency) of any notice
(including any notice of redemption) or the payment of any amount, under or with
respect to such Trust Preferred Securities. All notices and communications to be
given to the Holders and all payments to be made to Holders under the Trust
Preferred Securities shall be given or made only to or upon the order of the
registered Holders (which shall be the Clearing Agency or its nominee in the
case of a Global Security). The rights of beneficial owners in any Global
Security shall be exercised only through the Clearing Agency subject to the
applicable rules and procedures of the Clearing Agency. The Property Trustee may
conclusively rely and shall be fully protected in relying upon information
furnished by the Clearing Agency or any agent thereof with respect to its
Participants and any beneficial owners.
Section 9.3. Deemed Security Holders. Except when Trust
Preferred Securities constitute Pledged Securities held for the benefit of the
holders of Units, the Trustees may treat the Person in whose name any Security
shall be registered on the books and records of the Trust as the sole owner of
such Security for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Security on the part of any Person, whether
or not the Trust shall have actual or other notice thereof.
Section 9.4. Book Entry Interests. Global Securities shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of the Clearing Agency, and no Trust Preferred
Securities Beneficial Owner will receive a definitive certificate representing
such Trust Preferred Securities Beneficial Owner's interests in such Global
Securities, except as provided in Section 9.2. Unless and until definitive,
fully registered certificates representing Trust Preferred Securities have been
issued to the Trust Preferred Securities Beneficial Owners pursuant to Section
9.2 and Section 7.9:
(a) the provisions of this Section 9.4 shall be in
full force and effect;
(b) the Trust and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Declaration (including
the payment of Distributions on the Global Securities and receiving approvals,
votes or consents
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hereunder) as the sole holder of the Global Securities and shall have no
obligation to the Trust Preferred Securities Beneficial Owners;
(c) to the extent that the provisions of this Section
9.4 conflict with any other provisions of this Declaration, the provisions of
this Section 9.4 shall control; and
(d) the rights of the Trust Preferred Securities
Beneficial Owners shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such Trust
Preferred Securities Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants and receive and transmit payments of Distributions
on the Global Securities to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
Section 9.5. Notices to Clearing Agency. Whenever a notice or
other communication to the Holders of Trust Preferred Securities is required to
be given by a Trustee under this Declaration and such Trust Preferred Securities
are in the form of Global Securities, such Trustee shall give all such notices
and communications specified herein to be given to the Holders of Global
Securities to the Clearing Agency, and shall have no notice obligations to the
Trust Preferred Securities Beneficial Owners.
Section 9.6. Appointment of Successor Clearing Agency. If any
Clearing Agency elects to discontinue its services as securities depositary with
respect to the Trust Preferred Securities, the Administrators may, in their sole
discretion, appoint a successor Clearing Agency with respect to such Trust
Preferred Securities.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF
SECURITIES, TRUSTEES, ADMINISTRATORS OR OTHERS
Section 10.1. Liability. (a) Except as expressly set forth in
this Declaration, the Securities Guarantees and the terms of the Securities, the
Sponsor shall not be:
(i) personally liable for the return of any
portion of the capital contributions (or any return thereon) of the
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Holders of the Securities which shall be made solely from assets of the
Trust; and
(ii) required to pay to the Trust or to any
Holder of Securities any deficit upon dissolution of the Trust or
otherwise.
(b) The Sponsor shall be liable for all of the debts
and obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust
Act, the Holders of the Trust Preferred Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
Section 10.2. Exculpation.
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence (or, in
the case of the Property Trustee, by reason of such Trustee's negligence) or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be paid.
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Section 10.3. Fiduciary Duty. (a) To the extent that, at law
or in equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists
or arises between any Covered Persons and any Indemnified Person; or
(ii) whenever this Declaration or any other
agreement contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provide terms that are, fair
and reasonable to the Trust or any Holder of Securities.
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person
is permitted or required to make a decision:
(i) in its "discretion" or under a grant of
similar authority, the Indemnified Person shall be entitled to consider
such interests and factors as it desires, including its own interests,
and shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
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(ii) in its "good faith" or under another
express standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different standard
imposed by this Declaration or by applicable law.
Section 10.4. Indemnification. (a)(i) The Sponsor shall
indemnify, to the full extent permitted by law, any Company Indemnified Person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Trust) by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees and expenses), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Company Indemnified Person did not act in good faith and in a manner which
he reason ably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the
full extent permitted by law, any Company Indemnified Person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Trust to
pro cure a judgment in its favor by reason of the fact that he is or
was a Company Indemnified Person against expenses (including attorneys'
fees and expenses) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been ad judged
to be liable to the Trust unless and only to the extent that the Court
of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
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expenses which such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company
Indemnified Person shall be successful on the merits or otherwise
(including dismissal of an action without prejudice or the settlement
of an action without admission of liability) in defense of any action,
suit or proceeding referred to in paragraphs (i) and (ii) of this
Section 10.4(a), or in defense of any claim, issue or matter therein,
he shall be indemnified, to the full extent permitted by law, against
expenses (including attorneys' fees) actually and reasonably incurred
by him in connection therewith.
(iv) Any indemnification under paragraphs
(i) and (ii) of this Section 10.4(a) (unless ordered by a court) shall
be made by the Sponsor only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person is
proper in the circumstances because he has met the applicable standard
of conduct set forth in paragraphs (i) and (ii). Such determination
shall be made by the Holder of the Common Trust Securities.
(v) To the fullest extent permitted by law,
expenses (including attorneys' fees and expenses) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Sponsor in
advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Sponsor as
authorized in this Section 10.4(a). Notwithstanding the foregoing, no
advance shall be made by the Sponsor if a determination is reasonably
and promptly made by the Holder of the Common Trust Securities, that,
based upon the facts known to the Holder of the Common Trust Securities
at the time such determination is made, such Company Indemnified Person
acted in bad faith or in a manner that such person did not believe to
be in or not opposed to the best interests of the Trust, or, with
respect to any criminal proceeding, that such Company Indemnified
Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where the
Holder
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of the Common Trust Securities reasonably determines that such person
deliberately breached his duty to the Trust or its Common Trust
Securities or Trust Preferred Securities Holders.
(vi) The indemnification and advancement of
expenses provided by, or granted pursuant to, the other paragraphs of
this Section 10.4(a) shall not be deemed exclusive of any other rights
to which those seeking indemnification and advancement of expenses may
be entitled under any agreement, vote of stockholders or disinterested
directors of the Sponsor or Holders of the Trust Preferred Securities
or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Sponsor and each Company Indemnified
Person who serves in such capacity at any time while this Section
10.4(a) is in effect. Any repeal or modification of this Section
10.4(a) shall not affect any rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase
and maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Sponsor would have the power to indemnify him
against such liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a),
references to "the Trust" shall include, in addition to the resulting
or surviving entity, any constituent entity (including any constituent
of a constituent) absorbed in a consolidation or merger, so that any
person who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement
of expenses provided by, or granted pursuant to, this Section 10.4(a)
shall, unless otherwise provided when authorized or ratified, continue
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as to a person who has ceased to be a Company Indemnified Person and
shall inure to the benefit of the heirs, executors and administrators
of such a person.
(b) The Sponsor agrees, to the fullest extent
permitted by law, to (A) indemnify the (i) Property Trustee, (ii) the Delaware
Trustee, (iii) any Affiliate of the Property Trustee and the Delaware Trustee,
and (iv) any officers, directors, shareholders, members, partners, employees,
representatives, custodians, nominees or agents of the Property Trustee and the
Delaware Trustee (each of the Persons in (i) through (iv), including the
Property Trustee and the Delaware Trustee in their respective individual
capacities, being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense including taxes (other than taxes based on
the income of such Fiduciary Indemnified Person) incurred without gross
negligence (or, in the case of the Property Trustee, incurred without ordinary
negligence) or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reason able legal fees and expenses) of defending
itself against or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder and (B) to
advance, from time to time, prior to the final disposition of any claim, demand,
action, suit or proceeding for which indemnification is authorized pursuant to
subsection (b)(A) above, any expenses (including reasonable legal fees) incurred
by a Fiduciary Indemnified Person in defending such claim, demand, action, suit
or proceeding upon receipt by the Sponsor of an undertaking by or on behalf of
the Fiduciary Indemnified Person to repay such amount if it shall be determined
that the Fiduciary Indemnified Person is not entitled to be indemnified as
authorized in subsection (b)(A) above. The obligation to indemnify and advance
expenses as set forth in this Section 10.4(b) shall survive the satisfaction and
discharge of this Declaration and the Trust and shall survive the resignation or
removal of such Fiduciary Indemnified Person.
(c) The Sponsor agrees to pay the Property Trustee and
the Delaware Trustee, from time to time, such compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by the Property Trustee and the
Delaware Trustee hereunder as may be mutually agreed upon in writing by the
Sponsor and the Property Trustee or the Delaware Trustee, as the case may be,
and, except as otherwise expressly provided herein, to reimburse the Property
Trustee and the Delaware Trustee upon its or their request for all reasonable
expenses (including counsel fees and expenses), disbursements and advances
incurred or made by the
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Property Trustee or the Delaware Trustee, as the case may be, in accordance with
the provisions of this Declaration.
Section 10.5. Outside Businesses. Any Covered Person, the
Sponsor, the Delaware Trustee and the Property Trustee (subject to Section
5.3(c)) may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Delaware Trustee, or the Property
Trustee shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that, if
presented to the Trust, could be taken by the Trust, and any Covered Person, the
Sponsor, the Delaware Trustee and the Property Trustee shall have the right to
take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary, trustee or agent for, or act
on any committee or body of holders of, securities or other obligations of the
Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
Section 11.1. Fiscal Year. The fiscal year ("Fiscal Year") of
the Trust shall be the calendar year, or such other year as is required by the
Code.
Section 11.2. (a) Certain Accounting Matters. At all times
during the existence of the Trust, the as Administrators shall keep, or cause to
be kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for United States Federal income tax
purposes. The books of account and the records of the Trust shall be examined by
and reported upon as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Administrators.
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(b) The Administrators shall cause to be duly prepared
and delivered to each of the Holders, any annual United States Federal income
tax information statement, required by the Code, containing such information
with regard to the Securities held by each Holder as is required by the Code and
the Treasury Regulations. Notwithstanding any right under the Code to deliver
any such statement at a later date, the Administrators shall endeavor to deliver
all such information statements within 30 days after the end of each Fiscal Year
of the Trust.
(c) The Administrators shall cause to be duly prepared
and filed with the appropriate taxing authority, an annual United States Federal
income tax return, on a Form 1041 or such other form or statement as may be
required by United States Federal income tax law, and any other annual income
tax returns required to be filed by the Administrators on behalf of the Trust
with any state, local or other taxing authority.
Section 11.3. Banking. The Trust shall maintain one or more
bank accounts in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Debentures held by the
Property Trustee shall be made directly to the Property Trustee Account and no
other funds of the Trust shall be deposited in the Property Trustee Account. The
sole signatories for such accounts shall be designated by the Administrators;
provided, however, that the Property Trustee shall designate the signatories for
the Property Trustee Account.
Section 11.4. Withholding. The Trust and the Administrators
shall comply with all withholding requirements under United States Federal,
state and local law. The Trust shall request, and the Holders shall provide to
the Trust, such forms or certificates as are necessary to establish an exemption
from withholding with respect to each Holder, and any representations and forms
as shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Administrators
shall file required forms with applicable jurisdictions and, unless an exemption
from withholding is properly established by a Holder, shall remit amounts
withheld with respect to the Holder to applicable jurisdictions. To the extent
that the Trust is required to withhold and pay over any amounts to any authority
with respect to Distributions or allocations to any Holder, the amount withheld
shall be deemed to be a Distribution in the amount of the withholding to the
Holder. In the event of any claimed over withholding, Holders shall be limited
to an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
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ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1. Amendments. (a) Except as otherwise provided in
this Declaration or by any applicable terms of the Securities, this Declaration
may only be amended by a written instrument approved and executed by:
(i) if the amendment affects the rights,
powers, duties, obligations or immunities of the Administrators, the
Administrators (or if there are more than two Administrators, a
majority of the Administrators);
(ii) if the amendment affects the rights,
powers, duties, obligations or immunities of the Property Trustee, the
Property Trustee; and
(iii) if the amendment affects the rights,
powers, duties, obligations or immunities of the Delaware Trustee, the
Delaware Trustee.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed
amendment, the Property Trustee shall have first received an Officers'
Certificate from the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities); (ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Property Trustee or the Delaware Trustee, the Property Trustee and the
Delaware Trustee shall have first received:
(A) an Officers' Certificate from
the Sponsor that such amendment is permitted by, and conforms
to, the terms of this Declaration (including the terms of the
Securities); and
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(B) an Opinion of Counsel
that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the
Securities); provided, however, that the Property Trustee
shall not be required to sign any such amendment; and
(C) a consent in writing by
the Property Trustee or the Delaware Trustee, as the
case may be (which consent may be withheld in such
Trustee's sole discretion); and
(iii) unless the Property Trustee shall have
first received an Opinion of Counsel that such amendment or the
exercise of any power granted to the Property Trustee or Delaware
Trustee in accordance with such amendment will not:
(A) cause the Trust to fail to
continue to be classified for purposes of United States
Federal income taxation as a grantor trust; or
(B) cause the Trust to be
deemed to be an Investment Company required to be
registered under the Investment Company Act;
(c) Except as provided in Section 12.1(d), (e) or (h),
no amendment shall be made, and any such purported amendment shall be void and
ineffective unless the Holders of a Majority in liquidation amount of the Trust
Preferred Securities (or Units) shall have consented to such amendment.
(d) In addition to and notwithstanding any other
provision in this Declaration, without the consent of each affected Holder, this
Declaration may not be amended to (i) change the amount or timing of any
Distribution or other payment on the Securities (including payment of the Put
Price (as defined in the Indenture) or otherwise adversely affect the amount of
any distribution required to be made in respect of the Securities as of a
specified date or (ii) restrict the right of a Holder of Securities to institute
suit for the enforcement of any such payment on or after such date.
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(e) Section 9.1(b) and this Section 12.1 shall not be
amended without the consent of all of the Holders of the Securities.
(f) Article Four shall not be amended without the
consent of the Holders of a Majority in liquidation amount of the Common Trust
Securities.
(g) The rights of the holders of the Common Trust
Securities under Article Five to increase or decrease the number of, and appoint
and remove Trustees or Administrators shall not be amended without the consent
of the Holders of a Majority in liquidation amount of the Common Trust
Securities.
(h) Notwithstanding Section 12.1(c), this Declaration
may be amended from time to time by the Sponsor and the Property Trustee without
the consent of the Holders of the Securities to:
(i) cure any ambiguity, correct or
supplement any provision in this Declaration that may be inconsistent
with any other provision of this Declaration or to make any other
provisions with respect to matters or questions arising under this
Declaration which shall not be inconsistent with the other provisions
of the Declaration; or
(ii) modify, eliminate or add to any
provisions of the Declaration to such extent as shall be necessary to
ensure that the Trust will continue to be classified for United States
Federal income tax purposes as a grantor trust at all times that any
Securities are outstanding or to ensure that the Trust will not be
required to register as an Investment Company under the Investment
Company Act;
provided, however, that in the case of clauses (i) and (ii), such action shall
not adversely affect in any material respect the interests of the Holders, and
any amendments of this Declaration pursuant to Section 12.1(h) shall become
effective when notice thereof is given to the Holders of the Securities.
(i) If so directed by all of the Holders of a class of
Securities at a meeting of the Holders of such class, the Trustees, the Sponsor
and the Trust shall take such actions as are necessary to amend this Declaration
and to permit Holders of such class to reconstitute all of the Securities of
such class with a liquidation amount of $1,000 per each Security of such class.
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Section 12.2. Meetings of The Holders; Action by Written
Consent. (a) Meetings of the Holders of any class of Securities may be called at
any time by the Administrators (or as otherwise provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Trust Preferred
Securities listed or admitted for trading. The Administrators shall call a
meeting of the Holders of such class if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Administrators one or more notices in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders calling a meeting shall specify in writing the Securities
held by the Holders exercising the right to call a meeting and only those
Securities specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the
terms of the Securities, the following provisions shall apply to meetings of
Holders of Securities:
(i) notice of any such meeting shall be
given by the Property Trustee to all the Holders of Securities having a
right to vote thereat at least seven days and not more than 60 days
before the date of such meeting. Whenever a vote, consent or approval
of the Holders is permitted or required under this Declaration or the
rules of any stock exchange on which the Trust Preferred Securities are
listed or admitted for trading, such vote, consent or approval may be
given at a meeting of the Holders. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a meeting if
a consent in writing setting forth the action so taken is signed by the
Holders of Securities owning not less than the minimum amount of
Securities in liquidation amount that would be necessary to authorize
or take such action at a meeting at which all Holders having a right to
vote thereon were present and voting. Prompt notice of the taking of
action without a meeting shall be given to the Holders entitled to vote
who have not consented in writing. The Administrators may specify that
any written ballot submitted to the Security Holder for the purpose of
taking any action without a meeting shall be returned to the Trust
within the time specified by the Administrators;
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(ii) each Holder may authorize any Person to
act for it by proxy on all matters in which a Holder is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the discretion of the
Holder of Securities executing it. Except as otherwise provided herein,
all matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders were stockholders of
a Delaware corporation;
(iii) each meeting of the Holders shall be
conducted by the Administrators or by such other Person that the
Administrators may designate; and
(iv) unless the Business Trust Act, this
Declaration, the terms of the Securities, the Trust Indenture Act or
the listing rules of any stock exchange on which the Trust Preferred
Securities or Units are then listed or trading, otherwise provides, the
Administrators, in their sole discretion, shall establish all other
provisions relating to meetings of Holders, including notice of the
time, place or purpose of any meeting at which any matter is to be
voted on by any Holders of Securities, waiver of any such notice,
action by consent without a meeting, the establishment of a record
date, quorum requirements, voting in person or by proxy or any other
matter with respect to the exercise of any such right to vote.
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ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
Section 13.1. Representations And Warranties of Property
Trustee. The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a New York banking
corporation with trust powers and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the
Property Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration has been
duly executed and delivered by the Property Trustee and under Delaware law
(excluding securities laws) constitutes a legal, valid and binding obligation of
the Property Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or at law);
(c) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Property Trustee; and
(d) 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 the Property Trustee of this
Declaration.
Section 13.2. Representations And Warranties of Delaware
Trustee. The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking
Corporation with trust powers and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
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(b) The execution, delivery and performance by the
Delaware Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee. This Declaration has been
duly executed and delivered by the Delaware Trustee under Delaware law
(excluding securities laws) and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) 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 the Delaware Trustee of this
Declaration; and
(d) The Delaware Trustee is an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
Section 14.1. Notices. All notices provided for in this
Declaration shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the
Administrators at the Trust's mailing address set forth below (or such other
address as the Trust may give notice of to the Holders):
CMS Energy Trust II
c/o CMS Energy Corporation
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
Attention: Corporate Secretary
Telephone: (313) 436-9200
Telecopier: (313) 436-9258
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(b) if given to the Delaware Trustee, at the mailing
address set forth below (or such other address as Delaware Trustee may give
notice of to the Holders):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, DE 19711
Attention:
Telephone:
Telecopier:
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the Property
Trustee may give notice of to the Holders):
The Bank of New York
101 Barclay Street
Floor 21W
New York, New York 10007
Attention: Corporate Trust Administrator
Telephone: (212) 815-5909
Telecopier: (212) 815-5915
(d) if given to the Holder of the Common Trust
Securities, at the mailing address of the Sponsor set forth below (or such other
address as the Holder of the Common Trust Securities may give notice to the
Trust):
CMS Energy Trust II
c/o CMS Energy Corporation
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
Attention: Corporate Secretary
Telephone: (313) 436-9200
Telecopier: (313) 436-9258
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(e) if given to any other Holder, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
Section 14.2. Governing Law. This Declaration and the rights
of the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies shall be governed
by such laws without regard to principles of conflict of laws.
Section 14.3. Intention of The Parties. It is the intention of
the parties hereto that for United States Federal income tax purposes the Trust
be classified as a grantor trust and the Debentures as indebtedness. The
provisions of this Declaration shall be interpreted to further this intention of
the parties. The parties hereto agree and any Holder by the acquisition of a
Security shall be deemed to have agreed to treat the Trust as a grantor trust
and the Debentures as indebtedness in all tax and accounting filings and
reports.
Section 14.4. Headings. Headings contained in this Declaration
are inserted for convenience of reference only and do not affect the
interpretation of this Declaration or any provision hereof.
Section 14.5. Successors And Assigns. Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Sponsor and the Trustees shall bind and
inure to the benefit of their respective successors and assigns, whether so
expressed.
Section 14.6. Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
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Section 14.7. Counterparts. This Declaration may contain more
than one counterpart of the signature page and this Declaration may be executed
by the affixing of the signature of each of the Trustees to one of such
counterpart signature pages. All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
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IN WITNESS WHEREOF, the undersigned have caused this Amended
and Restated Declaration to be executed as of the day and year first above
written.
<TABLE>
<S> <C>
Alan M. Wright, not in his individual CMS ENERGY CORPORATION,
capacity but solely as Administrative as Sponsor
Trustee of the Trust
/s/ ALAN M. WRIGHT By: /s/ ALAN M. WRIGHT
- -------------------------------------- -----------------------------------
Name: Alan M. Wright
Title: Senior Vice President and
Chief Financial Officer
Thomas A. McNish, not in his individual The Bank of New York (Delaware), not
capacity but solely as Administrative in its individual capacity but solely as
Trustee of the Trust Delaware Trustee of the Trust
/s/ THOMAS A. MCNISH By: /s/ WALTER N. GITLIN
- -------------------------------------- -----------------------------------
Name: Walter N. Gitlin
Title: Authorized Signature
The Bank of New York, not in its individual
capacity but solely as Property Trustee of
the Trust
By: /s/ MICHAEL CULHANE
-----------------------------------
Name: Michael Culhane
Title: Vice President
</TABLE>
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ANNEX I
TERMS OF
8.625% TRUST PREFERRED SECURITIES
8.625% COMMON TRUST SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of July 8, 1999 (as amended from time to time,
the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Securities are set out below
(each capitalized term used but not defined herein has the meaning set forth in
the Declaration or, if not defined in such Declaration, as defined in the
Prospectus referred to below in Section 2(c) of this Annex I):
1. Designation and Number.
(a) Trust Preferred Securities. 7,250,000 Trust Preferred Securities of
the Trust with an aggregate liquidation amount with respect to the assets of the
Trust of Three Hundred Million, Eight Hundred and Seventy-Five Thousand Dollars
( $300,875,000), and each with a liquidation amount with respect to the assets
of the Trust of $41.50 per security, are hereby designated for the purposes of
identification only as "8.625% Trust Preferred Securities" (the "Trust Preferred
Securities"). The certificates evidencing the Trust Preferred Securities shall
be substantially in the form of Exhibit A-1 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any exchange or
quotation system on which the Trust Preferred Securities are listed, traded or
quoted, if any.
(b) Common Trust Securities. 8.625% Common Trust Securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of Nine Million, Three Hundred Five Thousand, Four Hundred Twenty Dollars
and Fifty Cents ($9,305,420.50) and a liquidation amount with respect to the
assets of the Trust of $41.50 per security, are hereby designated for the
purposes of identification only as "8.625% Common Trust Securities" (the "Common
Trust Securities"). The certificates evidencing the Common Trust Securities
shall be substantially in the form of Exhibit A-2 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
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2. Distributions.
(a) Distributions payable on each Security will initially be fixed at a
rate per annum of 8.625% (the "Initial Coupon Rate") of the stated liquidation
amount of $41.50 per Security (the "Liquidation Amount") and, on and after the
Call Option Expiration Date (as defined in the Indenture) at a rate per annum
that is equal to the Reset Rate (as defined in the Indenture) of the Liquidation
Amount. The Initial Coupon Rate and the Reset Rate as in effect at any
applicable time are hereinafter referred to as the "Coupon Rate". Except as set
forth below in respect of an Extension Period, Distributions in arrears for
more than one quarterly period will bear additional distributions thereon
compounded quarterly at the rate of 8.625% per annum until the Call Option
Expiration Date, and at the Reset Rate thereafter (as the context requires, the
"Deferral Rate") (to the extent permitted by applicable law). The term
"Distributions," as used herein, includes distributions of any such interest
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds on hand legally available therefor.
(b) Distributions on the Securities will be cumulative, will accumulate
from the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from July 8, 1999, and will be payable quarterly
in arrears on January 1, April 1, July 1, 1999 and October 1, 1999 of each year,
commencing on October 1, 1999 (each, a "Distribution Date"), except as otherwise
described below. Distributions will be computed on the basis of a 360-day year
consisting of twelve 30- day months. As long as no Event of Default has occurred
and is continuing under the Indenture, the Debenture Issuer has the right under
the Indenture to elect to defer payments of interest by extending the interest
payment period at any time and from time to time on the Debentures (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures, provided that no Extension Period shall end on a date
other than an Interest Payment Date for the Debentures or extend beyond the
Maturity Date of the Debentures. During any such Extension Period, the Debenture
Issuer may not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Debenture Issuer's capital stock (which includes common and preferred stock),
(ii) make any payment of principal of or premium, if any, or interest on or
repay, repurchase or redeem any debt securities of the Debenture Issuer that
rank pari passu with or junior in right of payment to the Debentures or (iii)
make any guarantee payments with respect to any guarantee by the Debenture
Issuer of any securities of any subsidiary of the Debenture
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Issuer if such guarantee ranks pari passu with or junior in right of payment to
the Debentures (other than, in the case of clauses (i), (ii) and (iii), (A)
dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Debenture Issuer, (B)
any declaration of a dividend in connection with the implementation of a stock
holders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (C)
payments under the Trust Preferred Securities Guarantee, (D) as a result of a
reclassification of the Debenture Issuer's capital stock solely into shares of
one or more classes or series of the Debenture Issuer's capital stock or the
exchange or conversion of one class or series of the Debenture Issuer's capital
stock for another class or series of the Debenture Issuer's capital stock, (E)
the purchase of fractional interests in shares of the Debenture Issuer's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, and (F) purchases of common stock of
the Debenture Issuer in connection with the satisfaction by the Debenture Issuer
of its obligations (including purchases related to the issuance of such common
stock or rights) under any of the Debenture Issuer's benefit plans for its and
its subsidiaries' directors, officers or employees or any of the Debenture
Issuer's dividend reinvestment plans). As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, Distributions will
continue to accumulate with additional Distributions thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Deferral Rate compounded
quarterly during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further defer payments of interest by
further extending such Extension Period; provided that such Extension Period may
not extend beyond the Maturity Date of the Debentures. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates which shall be the fifteenth day of the month immediately preceding
the month during which the relevant Distribution Date falls. The relevant record
dates for the Common Trust Securities shall be the same as the record dates for
the Trust Preferred Securities. Distributions payable on any Securities that
are not punctually paid on any Distribution Date, as a result of the Debenture
Issuer having failed to make a payment under the Debentures, will cease to be
payable to the Holder on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such Securities
are registered on the special record date or other specified date
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determined in accordance with the Indenture. If any date on which Distributions
are payable on the Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and so long as such payment is made on such next succeeding
day, without any interest or other payment in respect of any such delay), except
if such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was originally payable.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any dissolution of the Trust or the Sponsor otherwise
gives notice of its election to dissolve the Trust pursuant to Section
8.1(a)(iii) of the Declaration, the Trust shall be liquidated by the
Administrators as expeditiously as the Administrators determine to be possible
by distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to the Holders of the Securities a Like Amount (as
defined below) of the Debentures (the "Liquidation Distribution"). "Like
Amount" means (i) with respect to a redemption of the Securities, Securities
having an aggregate Liquidation Amount equal to the principal amount of
Debentures to be paid in accordance with their terms and (ii) with respect to a
distribution of Debentures upon the liquidation of the Trust, Debentures having
a principal amount equal to the aggregate Liquidation Amount of the Securities
of the Holder to whom such Debentures are distributed. If, upon any such
liquidation, the Liquidation Distribution can be paid only in part because the
Trust has insufficient assets on hand legally available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis, except that if a
Event of Default has occurred and is continuing, the Trust Preferred Securities
shall have priority over the Common Trust Securities.
4. Redemption and Distribution.
(a) The Trust Preferred Securities will be subject to mandatory
redemption on the Maturity Date of the Debentures out of the proceeds of the
repayment of the Debentures at Maturity. Upon the repayment of the Debentures at
maturity, the proceeds from such repayment shall be simultaneously applied by
the Property Trustee to redeem a Like Amount of the Securities at a redemption
price equal to the
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principal of and accrued and unpaid interest on the Debentures as of the
Maturity Date thereof (the "Final Redemption Price").
(b) On and from the date fixed by the Administrators for any
distribution of Debentures and liquidation of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee), as the Holder of the
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and (iii) any
certificates representing Securities not held by the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) will be deemed to
represent beneficial interests in a Like Amount of Debentures and bearing
accrued and unpaid interest in an amount equal to the accumulated and unpaid
Distributions on such Securities until such certificates are presented to the
registrar for the Debentures for transfer or reissue, whereupon the Debenture
Issuer will issue to such Holder, and the Debenture Trustee will authenticate, a
certificate representing such Debentures.
(c) The procedure with respect to redemptions or distributions of
Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder to be
redeemed or exchanged not fewer than 30 nor more than 60 days before
the date fixed for redemption or exchange thereof which, in the case of
a redemption, will be the Maturity Date of the Debentures. For purposes
of the calculation of the date of redemption or exchange and the dates
on which notices are given pursuant to this Section 4(c)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders. Each Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing in
the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, then to the extent funds are legally
available, (A) with respect to Trust Preferred Securities issued in
book-entry form, by 12:00 noon, New York City time, on the Maturity
Date, provided that the
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Debenture Issuer has paid the Property Trustee a sufficient amount of
cash in connection with the maturity of the Debentures by 10:00 a.m.,
New York City time, on the Maturity Date, the Property Trustee will
deposit, or cause the Paying Agent to Deposit, irrevocably with the
Clearing Agency or its nominee (or successor Clearing Agency or its
nominee) funds sufficient to pay the Final Redemption Price and will
give the Clearing Agency irrevocable instructions and authority to pay
the Final Redemption Price to the Clearing Agency Participants, and (B)
with respect to Trust Preferred Securities issued in certificated form
and Common Trust Securities, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in connection
with the maturity of the Debentures, the Property Trustee will give
irrevocable instructions and authority to the Paying Agent and will
irrevocably deposit with the Paying Agent funds sufficient to pay the
Final Redemption Price to the Holders thereof. If a
Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the
close of business on the date of such deposit distributions will cease
to accumulate on the Securities and all rights of Holders will cease,
except the right of the Holders of such Securities to receive the Final
Redemption Price, but without interest on such Final Redemption Price,
and such Securities shall cease to be outstanding.
(iii) Payment of accumulated and unpaid Distributions on the
Maturity Date of the Debentures will be subject to the rights of
Holders of Securities on the close of business on a regular record date
in respect of a Distribution Date occurring on or prior to such
Maturity Date. If the Maturity Date of the Debentures is not a Business
Day, then payment of the Final Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and so
long as such payment is made on the next succeeding Business Day,
without any interest or other payment in respect of any such delay),
with the same force and effect as if made on such date fixed for
redemption. If payment of the Final Redemption Price is improperly
withheld or refused and not paid either by the Trust or by the Sponsor
as guarantor pursuant to the relevant Securities Guarantee,
Distributions on such Securities will continue to accumulate at the
Coupon Rate on the Final Redemption Price from the Maturity Date to the
actual date of payment.
(iv) Redemption/Distribution Notices shall be sent by the
Property Trustee on behalf of the Trust to (A) in respect of the Trust
Preferred Securities, the Clearing Agency or its nominee (or any
successor Clearing Agency or its nominee) if the Global Certificates
have been issued or, if
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Definitive Trust Preferred Securities have been issued, to the Holder
thereof, and (B) in respect of the Common Trust Securities to the
Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States Federal securities laws and banking
laws), provided the acquiror is not the Holder of the Common Trust
Securities or the obligor under the Indenture, the Sponsor or any of
its subsidiaries may at any time and from time to time purchase
outstanding Trust Preferred Securities by tender, in the open market or
by private agreement.
5. Voting Rights - Trust Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Trust Preferred
Securities will have no voting rights. The Administrators are required to call a
meeting of the Holders of the Trust Preferred Securities if directed to do so by
the Holders of at least 10% in liquidation amount of the Trust Preferred
Securities.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 5.07 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in liquidation amount
of all outstanding Trust Preferred Securities; provided, however, that where a
consent under the Indenture would require the consent of each holder of
Debentures affected thereby, no such consent shall be given by the Trustees
without the prior written approval of each Holder of the Trust Preferred
Securities. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Trust Preferred
Securities except by subsequent vote of such Holders. The Property Trustee shall
notify each Holder of Securities of any notice of default with respect to the
Debentures. In addition to obtaining the foregoing approvals of such Holders
prior to taking any of the foregoing actions, the Property Trustee shall be
provided with an Opinion of Counsel experienced in such matters to the effect
that the Trust will not be classified for United States Federal income tax
purposes as other than a grantor trust on account of such action.
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If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or premium, if any, or interest on the Debentures on the due
date therefor (after giving effect to any Extension Period), then a Holder of
Trust Preferred Securities may directly institute a proceeding for enforcement
of payment to such Holder of the principal of or premium, if any, or interest on
a Like Amount of Debentures (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such Direct Action, the
rights of the Common Trust Securities Holder will be subrogated to the rights of
such Holder of Trust Preferred Securities to the extent of any payment made by
the Debenture Issuer to such Holder of Trust Preferred Securities in such Direct
Action, provided, however, that no such subrogation right may be exercised so
long as an Event of Default has occurred and is continuing. The Holders of Trust
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
Any approval or direction of Holders of Trust Preferred Securities may
be given at a separate meeting of such Holders of Trust Preferred Securities
convened for such purpose, at a meeting of all of the Holders of Securities in
the Trust or pursuant to written consent. The Property Trustee will cause a
notice of any meeting at which Holders of Trust Preferred Securities are
entitled to vote, or of any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Trust Preferred
Securities. Each such notice will include a statement setting forth (i) the date
of such meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Trust Preferred Securities
will be required for the Trust to redeem and cancel Trust Preferred Securities
or to distribute the Debentures in accordance with the Declaration and the terms
of the Securities.
Notwithstanding that Holders of Trust Preferred Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Trust Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Trust Securities.
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(a) Except as provided under Sections 6(b), and 7, in the Business
Trust Act, and as otherwise required by law and the Declaration, the Holders of
the Common Trust Securities will have no voting rights.
(b) Unless an Event of Default under the Declaration shall have
occurred and be continuing, any Trustee may be removed at any time by the holder
of the Common Trust Securities. If an Event of Default under the Declaration has
occurred and is continuing, the Property Trustee and the Delaware Trustee may be
removed at such time by the Holders of a Majority in liquidation amount of the
outstanding Trust Preferred Securities. In no event will the Holders of the
Trust Preferred Securities have the right to vote to appoint, remove or replace
the Administrators, which voting rights are vested exclusively in the Sponsor as
the holder of the Common Trust Securities. No resignation or removal of a
Trustee and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the Declaration.
No vote or consent of the Holders of the Common Trust Securities will
be required for the Trust to redeem and cancel Common Trust Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration.
(a) The provisions set forth under Section 12.1 of the Declaration and
this Section 7 shall govern any amendments to the Declaration. (b)
Notwithstanding any provisions of the Declaration and the provisions of Section
3.16(b) of the Trust Indenture Act, the right of any Holder of Trust Preferred
Securities to receive payment of distributions and other payments upon
redemption, repurchase or other wise, on or after their respective due dates, or
to institute a suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder. For the protection and enforcement of the foregoing provision, each and
every Holder of Trust Preferred Securities shall be entitled to such relief as
can be given either at law or equity.
8. Right to Exercise Put Options.
In the event the Call Option (as defined in the Master Unit Agreement)
is not exercised by the Call Option Holder (as defined in the Master Unit
Agreement), each holder of Trust Preferred Securities will have the right to
require the Trust to distribute Debentures having an aggregate principal amount
equal to the aggregate Liquidation Amount of such Trust Preferred Securities to
the Put Agent (as defined in
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the Indenture), on the Stock Purchase Date (as defined in the Indenture), in
exchange for such Trust Preferred Securities, in connection with the concurrent
exercise by the Put Agent on behalf of each such holder of the Debenture Put
Option (as defined in the Indenture) related thereto.
A holder of Trust Preferred Securities may exercise the right referred
to above by presenting and surrendering the certificate evidencing such Trust
Preferred Securities, at the offices of the Property Trustee, with the form of
"Notice to Require Exercise of Junior Subordinated Debenture Put Option" on the
reverse side of the certificate completed and executed as indicated, by 10:00
a.m., New York City time, on the Stock Purchase Date. If such right is properly
exercised, the applicable Debentures will be distributed to the Put Agent, who
shall be the Collateral Agent, and the Put Agent will then exercise the Put
Option related thereto on behalf of the holder. Any cash received on the
exercise of such option must be used to settle any purchase contracts secured by
the Debentures.
9. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the Trust
Preferred Securities pro rata according to the aggregate liquidation amount of
Trust Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Trust Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Trust Preferred
Securities (as described in Section 10), to each Holder of Common Trust
Securities pro rata according to the aggregate liquidation amount of Common
Trust Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Common Trust Securities outstanding.
10. Ranking; Subordination of Common Trust Securities.
(a) The Trust Preferred Securities rank pari passu with the Common
Trust Securities and payment of Distributions on, and the Final Redemption Price
of, the Trust Preferred Securities and the Common Trust Securities, as
applicable, shall be made pro rata based on the liquidation amount of the Trust
Preferred Securities and Common Trust Securities; provided, however, that if on
any Distribution Date or
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Maturity Date an Event of Default under the Declaration (solely as the result of
an event described in clauses (1), (2) or (3) of the definition of Event of
Default in the Indenture) shall have occurred and be continuing, no payment of
any Distribution, or Final Redemption Price of, any of the Common Trust
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of the Common Trust Securities, shall be made unless payment
in full in cash of all accumulated and unpaid Distributions on all of the
outstanding Trust Preferred Securities for all distribution periods terminating
on or prior thereto or, in the case of the Maturity Date, the full amount of the
Final Redemption Price therefor, shall have been made or provided for, and all
funds available to the Property Trustee shall first be applied to the payment in
full in cash of all Distributions on, or Final Redemption Price of, the Trust
Preferred Securities then due and payable.
In the case of any Event of Default, the holder of the Common Trust
Securities will be deemed to have waived any right to act with respect to such
Event of Default until the effect of such Event of Default shall have been
cured, waived or otherwise eliminated. Until any such Event of Default has been
so cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the Holders of the Trust Preferred Securities, and only the Holders
of the Trust Preferred Securities will have the right to direct the Property
Trustee to act on their behalf.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Trust Preferred Securities and Common Trust Securities,
by the acceptance thereof, agrees to the provisions of the Trust Preferred
Securities Guarantee and the Common Trust Securities Guarantee, respectively,
including the subordination provisions therein and to the provisions of the
Indenture and the Declaration.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive or similar
rights to subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Indenture, the
Trust Preferred Securities Guarantee or the Common Trust Securities Guarantee
(as may be
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appropriate) and the Indenture (including any supplemental indenture) to a
Holder without charge on written request to the Sponsor at its principal place
of business.
88
<PAGE> 95
EXHIBIT A-1
FORM OF TRUST PREFERRED
SECURITIES FORM OF FACE OF SECURITY
[IF THIS TRUST PREFERRED SECURITY ("TRUST PREFERRED SECURITY") IS A
GLOBAL SECURITY, INSERT: THIS TRUST PREFERRED SECURITY IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE
OF THE CLEARING AGENCY. THIS TRUST PREFERRED SECURITY IS EXCHANGEABLE FOR TRUST
PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING
AGENCY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION AND NO TRANSFER OF THIS TRUST PREFERRED SECURITY (OTHER THAN A
TRANSFER OF THIS TRUST PREFERRED SECURITY AS A WHOLE BY THE CLEARING AGENCY TO A
NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE CLEARING AGENCY TO THE
CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING AGENCY) MAY BE REGISTERED
EXCEPT IN LIMITED CIRCUMSTANCES.]
[UNLESS THIS TRUST PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK), A NEW YORK CORPORATION, TO THE TRUST OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY TRUST PREFERRED SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONG
FUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Certificate Number T-1 Number of Trust Preferred Securities: 7,250,000 CUSIP
NO. 125898205
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Certificate Evidencing Trust Preferred Securities
of
CMS Energy Trust
8.625% Trust Preferred Securities (liquidation amount $41.50 per Trust Preferred
Security)
CMS Energy Trust II, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that The Bank of New York, as
Unit Agent (the "Holder") is the registered owner of 7,250,000 securities of the
Trust representing preferred undivided beneficial ownership interests in the
assets of the Trust designated the 8.625% Trust Preferred Securities
(liquidation amount $41.50 per Trust Preferred Security) (the "Trust Preferred
Securities"). Subject to the terms of the Declaration (as defined below), the
Trust Preferred Securities are transferable on the books and records of the
Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Trust Preferred Securities represented hereby are issued and shall in all
respects be subject to the provisions of the Amended and Restated Declaration of
Trust of the Trust dated as of July 8, 1999, as the same may be amended from
time to time (the "Declaration"), including the designation of the terms of the
Trust Preferred Securities as set forth in Annex I to the Declaration.
Capitalized terms used but not defined herein shall have the meaning given them
in the Declaration. The Sponsor will provide a copy of the Declaration, the
Trust Preferred Securities Guarantee and the Indenture to a Holder without
charge upon written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Trust Preferred Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States Federal
income tax purposes, the Trust as a grantor trust, the Debentures as
indebtedness and the Trust Preferred Securities as evidence of indirect
beneficial ownership in the Debentures.
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IN WITNESS WHEREOF, the Trust has executed this certificate this 8th
day of July, 1999.
CMS ENERGY TRUST II
By:
------------------------------
Name: Alan M. Wright
Title: Administrative Trustee
Attest:
----------------------
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PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Preferred Securities referred to in the
within-mentioned Declaration.
Dated: July 8, 1999
The Bank of New York, not in its individual
capacity, but solely as
Property Trustee
By:
-------------------------------------
Authorized Signatory
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<PAGE> 99
FORM OF REVERSE OF SECURITY
Distributions payable on each Trust Preferred Security will initially
be fixed at a rate per annum of 8.625% (the "Initial Coupon Rate") of the
liquidation amount of $41.50 per Trust Preferred Security (the "Liquidation
Amount") and, on and after the Call Option Expiration Date (as defined in the
Indenture), at a rate per annum that is equal to the Reset Rate (as defined in
the Indenture) of the Liquidation Amount. The Initial Coupon Rate and the Reset
Rate as in effect at any applicable time are hereinafter referred to as the
"Coupon Rate". Distributions in arrears for more than one quarterly period will
bear interest thereon compounded quarterly at the rate of 8.625% per annum and,
for the period after the Call Option Exercise Date, at the Rest Rate (as the
context requires, the "Deferral Rate") (to the extent permitted by applicable
law). The term "Distributions", as used herein, includes such cash distributions
and any such interest unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds on hand
legally available therefor.
Distributions on the Trust Preferred Securities will be cumulative,
will accumulate from the most recent date to which Distributions have been paid
or, if no Distributions have been paid, from July 8, 1999 and will be payable
quarterly in arrears, on January 1, April 1, July 1 and October 1 of each year,
commencing on April 1, 1999, except as otherwise described below. Distributions
will be computed on the basis of a 360-day year consisting of twelve 30-day
months. As long as no Event of Default has occurred and is continuing under the
Indenture, the Debenture Issuer has the right under the Indenture to elect to
defer payments of interest by extending the interest payment period at any time
and from time to time on the Debentures (each an "Extension Period"), provided
that no Extension Period shall end on a date other than an Interest Payment Date
for the Debentures or extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accumulate with interest
thereon (to the extent permitted by applicable law, but not at a rate exceeding
the rate of interest then accruing on the Debentures) at the Deferred Rate
compounded quarterly during any such Extension Period. Prior to the termination
of any such Extension Period, the Debenture Issuer may further defer payments of
interest by further extending such Extension Period; provided that such
Extension Period may not extend beyond the Maturity Date of the Debentures.
Payments of accumulated Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record date after the end of
the
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Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Debenture Issuer may commence a new Extension
Period, subject to the above requirements.
Subject to the conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time dissolve the Trust and, after satisfaction of liabilities to creditors of
the Trust as required by applicable law, cause the Debentures to be distributed
to the holders of the Securities in liquidation of the Trust. The Trust
Preferred Securities will be subject to mandatory redemption on the Maturity
Date of the Debentures as provided in the Declaration.
The Trust Preferred Securities and the rights of the Holders shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
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<PAGE> 101
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Security to:
- ------------------------
- ------------------------
- ------------------------
(Insert assignee's social security or tax identification number)
- ------------------------
- ------------------------
- ------------------------
(Insert address and zip code of assignee)
- ------------------------
- ------------------------
- ------------------------
and irrevocably appoints agent to transfer this Security on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
--------------------
Signature:
--------------------
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee(1):
--------------------
- ------------------------
(1) Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities and Exchange Act of 1934, as amended.
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<PAGE> 102
NOTICE TO REQUIRE EXERCISE OF JUNIOR SUBORDINATED
DEBENTURE PUT OPTION
The undersigned holder of this Security hereby irrevocably exercises the right
to require the Trust to distribute to the Put Agent Debentures having an
aggregate principal amount equal to the Liquidation Amount of the number of
Trust Preferred Securities listed below (which number does not exceed the number
evidenced hereby) in exchange for such number of Trust Preferred Securities, on
the Stock Purchase Date in connection with the concurrent exercise by the Put
Agent on behalf of the holder of this Security of the Debenture Put Option
related hereto on such date. Pursuant to the aforementioned exercise of the
right to require the Trust to distribute to the Put Agent Debentures in exchange
for such number of Trust Preferred Securities, the undersigned hereby directs
the Property Trustee to take any actions necessary to effect the exchange of
such number of Trust Preferred Securities for such principal amount of
Debentures. Any cash received on the exercise of such option must be used to
settle any purchase contracts secured by the Debentures.
Date:
--------------------
Number of Trust Preferred Securities (not to exceed number of Trust Preferred
Securities evidenced hereby) Signature:________________________ (Sign exactly as
your name appears on the other side of this Security) Please Print or Type Name
and Address, Including Zip Code, and Social Security or Other Identifying Number
- ------------------------
- ------------------------
- ------------------------
Signature Guarantee(1):
------------------------
- ------------------------
(1) Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities and Exchange Act of 1934, as amended.
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<PAGE> 103
EXHIBIT A-2
FORM OF COMMON TRUST SECURITY CERTIFICATE
THIS COMMON TRUST SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHER
WISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN
EFFECTIVE REGISTRATION STATEMENT.
THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHER
WISE TRANSFERRED.
Certificate Number: C-1 Number of Common Trust Securities: 224,227
Certificate Evidencing Common Trust Securities
of
CMS Energy Trust
8.625% Common Trust Securities (liquidation amount $41.50 per Common Trust
Security)
CMS Energy Trust II, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that CMS Energy Corporation
(the "Holder") is the registered owner of common trust securities of the Trust
representing undivided beneficial ownership interests in the assets of the Trust
designated the 8.625% Common Trust Securities (liquidation amount $41.50 per
Common Trust Security) (the "Common Trust Securities"). The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Trust Securities represented hereby are issued and shall in all respects
be subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of July, 1999 as the same may be amended from time to time
(the "Declaration"), including the designation of the terms of the Common Trust
Securities as set forth in Annex I to the Declaration. Capitalized terms used
but not defined herein shall have the meaning given them in the Declaration.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Common Trust Securities Guarantee to the extent provided therein.
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<PAGE> 104
By acceptance, the Holder agrees to treat, for United States Federal
income tax purposes, the Debentures as indebtedness and the Common Trust
Securities as evidence of indirect beneficial ownership in the Debentures.
98
<PAGE> 105
IN WITNESS WHEREOF, the Trust has executed this certificate this 8th
day of July, 1999.
CMS ENERGY TRUST II
------------------------
Name:
Title: Administrator
Attest:
------------------------
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<PAGE> 106
FORM OF REVERSE OF SECURITY
Distributions payable on each Common Trust Security will initially be
fixed at a rate per annum of 8.625% (the "Initial Coupon Rate") of the
liquidation amount of $41.50 per Common Trust Security (the "Liquidation
Amount") and, on and after the Call Option Expiration Date (as defined in the
Indenture), at a rate per annum that is equal to the Reset Rate (as defined in
the Indenture) of the Liquidation Amount. The Initial Coupon Rate and the Reset
Rate as in effect at any applicable time are hereinafter referred to as the
"Coupon Rate". Distributions in arrears for more than one quarterly period will
bear interest thereon compounded quarterly at the rate of 8.625% per annum and,
for the period after the Call Option Exercise Date, at the Reset Rate (the
"Deferral Rate") (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes such cash distributions and any such
interest unless otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the Property Trustee
and to the extent the Property Trustee has funds available therefor.
Distributions on the Common Trust Securities will be cumulative, will
accrue from the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from July 8, 1999 and will be payable quarterly
in arrears, on January 1, April 1, July 1 and October 1 of each year, commencing
on October 1, 1999, except as otherwise described below. Distributions will be
computed on the basis of a 360-day year consisting of twelve 30-day months. As
long as no Event of Default has occurred and is continuing under the Indenture,
the Debenture Issuer has the right under the Indenture to elect to defer
payments of interest by extending the interest payment period at any time and
from time to time on the Debentures (each an "Extension Period"), provided that
no Extension Period shall end on a date other than an Interest Payment Date for
Debentures or extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, Distributions will continue to accumulate with interest thereon (to
the extent permitted by applicable law, but not at a rate exceeding the rate of
interest then accruing on the Debentures) at the Deferral Rate compounded
quarterly during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further defer payments of interest by
further extending such Extension Period; provided that such Extension Period may
not extend beyond the Maturity Date of the Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then
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<PAGE> 107
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
Subject to the conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time liquidate the Trust and, after satisfaction of liabilities to creditors of
the Trust as provided by applicable law, cause the Debentures to be distributed
to the holders of the Securities in liquidation of the Trust.
The Common Trust Securities will be subject to mandatory redemption on
the Maturity Date of the Debentures, as provided in the Declaration.
The Common Trust Securities and the rights of the holders thereof
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware and all rights and remedies shall be governed by such laws
without regard to principles of conflict of laws.
---------------------
101
<PAGE> 1
EXHIBIT 4(m)
REGISTERED REGISTERED
CMS ENERGY CORPORATION
8.625% JUNIOR SUBORDINATED DEFERRABLE INTEREST
DEBENTURE DUE JULY 1, 2004
CUSIP 125896308
No. D-1 US $310,180,420.50
CMS ENERGY CORPORATION, a corporation duly organized and
existing under the laws of Michigan (herein called the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to The Bank of New York, as Property
Trustee for CMS Energy Trust II, a Delaware statutory business trust (the
"Trust") or registered assigns, (i) the principal sum of Three Hundred Ten
Million One Hundred Eighty Thousand Four Hundred Twenty Dollars and Fifty Cents
($310,180,420.50) on July 1, 2004, (the "Maturity Date") unless previously
repurchased as provided herein, (ii) interest (a) on said principal sum from
July 8, 1999, or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on January 1,
April 1, July 1 and October 1, of each year, commencing on October 1, 1999,
initially at the rate of 8.625% per annum (the "Initial Interest Rate") until
the Call Option Expiration Date (as hereinafter defined), and the Reset Rate
(whichever of the Initial Interest Rate or the Reset Rate as may be in effect at
any applicable time being referred to herein as the "Interest Rate") thereafter
until the principal hereof shall have become due and payable, (b) at the
Interest Rate on any overdue principal and premium, if any, and (c) at the
Interest Rate, compounded quarterly on any overdue installment of interest and
(iii) the Put Price (as hereinafter defined) with respect hereto; in each case,
without duplication and to the extent that payment of such interest is
enforceable under applicable law. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year consisting of
twelve 30-day months. In the event that any date on which principal of (or
premium, if any), or interest on or the Put Price with respect to this 8.625%
Junior Subordinated Deferrable Interest Debentures due July 1, 2004 (the
"Debenture"), is not a Business Day, then payment payable on such date will be
made on the next succeeding day that is a Business Day (and to the extent such
payment is made on the next succeeding Business Day, without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be
<PAGE> 2
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on the date such payment was originally payable.
The interest so payable and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Debenture (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest payment, which shall be on the 15th day of the month immediately
preceding the month in which the relevant Interest Payment Date falls. Except as
otherwise provided in the Indenture, any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date by virtue of their having been such Holder and may either be
paid to the Person in whose name this Debenture (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee (as
hereinafter defined), notice whereof is to be given to Holders of Debentures not
less than 10 calendar days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said
Indenture. The principal of (and premium, if any) and the interest on and the
Put Price with respect to this Debenture shall be payable at the office or
agency of the Trustee in The City of New York or at the office(s) of such Paying
Agent(s) as the Company may designate from time to time maintained for that
purpose in any coin or currency of the United States of America that at the time
of payment is legal tender for payment of public and private debts; PROVIDED,
HOWEVER, that payment of interest may be made at the option of the Company by
check mailed to the registered Holder at such address as shall appear in the
Register or by transfer to an account maintained by the Holder entitled thereto
as specified in the Register, provided that proper instructions have been
received by the relevant record date. Notwithstanding the foregoing, so long as
the holder of this Debenture is the Property Trustee, the payment of the
principal of (and premium, if any) and interest on this Debenture will be made
in immediately available funds at such place and to such account as may be
designated by the Property Trustee.
The interest rate paid on the Debentures is subject to
increase in accordance with the procedures set forth herein. By 9:30 a.m., New
York City time, on the Reset Date (as hereinafter defined), a nationally
recognized investment banking firm chosen by the Company (the "Reset Agent")
will select a rate equal to the lower of (a) the rate that the Reset Agent
determines is sufficient to cause the then current aggregate market value of the
8.625 % Trust Preferred Securities (the "Trust Preferred Securities"
representing individual preferred beneficial interests in the assets of the
Trust (or, if the Trust Preferred Securities are no longer outstanding, the
Debentures) to be equal to
2
<PAGE> 3
approximately 100.75% of the Cash Equivalent of the Aggregate Call Option
Exercise Consideration (as hereinafter defined) and (b) the Maximum Debenture
Rate (as hereinafter defined), and the interest rate will thereupon become that
rate (the "Reset Rate"). Upon any such reset to the Reset Rate, the Reset Agent
shall notify the Company and the Call Option Holder (as hereinafter defined) of
such Reset Rate.
"Cash Equivalent of the Aggregate Call Option Exercise
Consideration" means the cash value on the Reset Date of a package of
consideration (the "Aggregate Call Option Exercise Consideration"), which
includes U.S. Treasury Strips, U.S. Treasury Bills or other U.S. Treasury
Securities (any of the foregoing being referred to herein as the "Treasury
Securities") and cash, that will provide payments matching the aggregate
distributions due on the Trust Preferred Securities (or interest due on the
Debentures if the Debentures have been substituted for such Trust Preferred
Securities ) through July 1, 2002, assuming that (a) the Treasury Securities
included in the Aggregate Call Option Exercise Consideration are highly liquid
Treasury Securities maturing on or within 35 days prior to July 1, 2002 (any
such Treasury Securities will be designated in good faith by the holder of the
call options on the Trust Preferred Securities, (the "Call Option Holder") in a
notice delivered to the Reset Agent by 8:30 a.m., New York City time, on the
Reset Date or, if the Call Option Holder fails to so designate such Treasury
Securities, as designated in good faith by the Reset Agent, in either case in a
manner intended to minimize the Cash Equivalent of the Aggregate Call Option
Exercise Consideration) and (b) such Treasury Securities are valued based on the
ask-side price thereof at 9:00 a.m., New York City time, on the Reset Date (as
determined on a same day settlement basis by a reasonable and customary means
selected in good faith by the Reset Agent and notified to the Call Option Holder
prior thereto) plus interest accrued thereon to such date.
"Maximum Debenture Rate" means (a) the yield to maturity
(calculated in accordance with standard market price) corresponding to the
bid-side price at 9:00 a.m., New York City time, on the Reset Date (as
determined by a reasonable and customary means selected in good faith by the
Reset Agent and notified to the Call Option Holder prior thereto) of highly
liquid Treasury Securities maturing on or around the Maturity Date as selected
in good faith by the Rate Increase Agent plus (b) 500 basis points.
"Reset Date" means April 1, 2002 (or, if such day is not a
Trading Day (as hereinafter defined), the next succeeding Trading Day).
"Trading Day" means a day on which the $.01 par value common
stock of the Company (the "Common Stock") (a) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (b) has traded at least once on the national
or regional securities exchange or
3
<PAGE> 4
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
If the Trust is required to pay any additional taxes, duties
or other govern mental charges, the Company will pay such Additional Amounts on
the Debentures as may be necessary in order that the amount of distributions
then due and payable by the Trust on the outstanding Trust Preferred Securities
and the common undivided beneficial ownership interests in the Trust owned by
the Company (the "Common Trust Securities") and together with the Trust
Preferred Securities, the "Trust Securities") shall not be reduced as a result
of any such additional taxes, duties or other governmental charges to which the
Trust has become subject. In lieu of paying such Additional Amounts on the
Debentures, the Company may liquidate the Trust and cause the Debentures to be
distributed to the holders of the Trust Securities in liquidation of the Trust.
If the Debentures are distributed to the holders of the Trust
Securities and are not otherwise pledged as collateral for the Company's 8.75%
Adjustable Convertible Trust Security Units (the "Units"), the Debentures may be
represented by one or more global certificates registered in the name of Cede &
Co. or other nominee of the Depository Trust Company.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all present and future Senior Indebtedness (as defined
in the Indenture), and this Debenture is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Debenture by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination so provided and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, hereby waives all
notice of the acceptance of the subordination provisions contained herein and in
the Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
This Debenture is one of a duly authorized issue of securities
of the Company (the "Securities") issued under an Indenture, dated as of June 1,
1997, as amended or supplemented from time to time (the "Indenture"), between
the Company and The Bank of New York, as trustee (the "Trustee"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and
4
<PAGE> 5
the Holders of the Debentures and of the terms upon which the Securities are,
and are to be, authenticated and delivered. This Debenture is one of the
Securities designated on the face hereof limited in aggregate principal amount
to $ .
Any one or more of the following described events with respect
to the Debentures constitutes a "Debenture Event of Default" (whatever the
reason for such Debenture Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body): (a) failure for 30 days to pay any
interest on the Debentures when due (subject to the deferral of any due date in
the case of an Extension Period (as hereinafter defined)); or (b) failure to pay
any principal on the Debentures when due whether at maturity, by declaration of
acceleration of maturity or otherwise; or (c) failure to pay the Put Price when
due upon exercise of a Debenture Put Option (as hereinafter defined); or (d)
failure to observe or perform certain other covenants contained in the Indenture
for 60 days after written notice to the Company from the Trustee or to the
Company and the Trustee from the holders of at least 25% in aggregate
outstanding principal amount of Debentures; or (e) the events of bankruptcy,
insolvency or reorganization of the Company set forth as Events of Default under
the Indenture.
If any Event of Default, as provided for the Indenture
(including the Debenture Events of Default), with respect to the Debentures
shall occur and be continuing, the principal of the Debentures may be declared
due and payable in the manner and with the effect provided in the Indenture.
So long as no Debenture Event of Default has occurred and is
continuing, the Company will have the right at any time during the term of the
Debentures to defer the payment of interest at any time or from time to time for
a period not extending beyond the Maturity Date (each such period of deferral,
an "Extension Period") or ending on a date other than an Interest Payment Date.
At the end of an Extension Period, the Company must pay all interest then
accrued and unpaid (together with interest thereon accrued at a rate of 8.625%
per annum (and, for the period after the Reset Date, at the Reset Rate)
compounded on each succeeding Interest Payment Date). During an Extension
Period, interest will continue to accrue and Holders of Debentures will be
required to accrue interest income for United States Federal income tax purposes
prior to the receipt of cash attributable to such income (except to the extent
that the tax treatment changes as a matter of law).
Prior to the expiration of any such Extension Period, the
Company may further extend such Extension Period, provided that such Extension
Period, together with
5
<PAGE> 6
all such previous and further extensions within such Extension Periods, (i)
shall not end on any date other than an Interest Payment Date and (ii) shall not
extend beyond the Maturity Date. Upon the termination of any such Extension
Period and the payment of all amounts then due on any Interest Payment Date, the
Company may elect to begin a new Extension Period, subject to the above
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof. The Company must give the Property Trustee, the
administrators of the Trust and the Trustee written notice of its election of
any Extension Period (or an extension thereof) at least five Business Days prior
to the earlier of (a) the date the distributions on the Trust Securities would
have been payable except for the election to begin or extend such Extension
Period, (b) the date the Trustees are required to give notice to any securities
exchange or to holders of Trust Preferred Securities of the Regular Record Date
or the date such distributions are payable and (c) such Regular Record Date. The
Trustee shall give notice of the Company's election to begin or extend a new
Extension Period to the holders of the Trust Preferred Securities. There is no
limitation on the number of times that the Company may elect to begin an
Extension Period.
The Company has agreed that it will not (a) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock, (b)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu
with or junior in right of payment to the Debentures or (c) make any guarantee
payments with respect to any guarantee by the Company of any securities of any
subsidiary of the Company if such guarantee ranks pari passu or junior in right
of payment to the Debentures (other than, in the case of clauses (a), (b) and
(c), (i) dividends or distributions in shares of, or options, warrants or rights
to subscribe for or purchase shares of, common stock of the Company, (ii) any
declaration of a dividend in connection with the implementation of a
stockholder's rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
(iii) payments under the guarantee agreement (the "Guarantee"), dated as of July
8, 1999, between the Company and the Trustee, pursuant to which the Company
guarantees the payment of distributions and other payments on the Trust
Preferred Securities to the extent that the Trust has funds on hand sufficient
therefor, (iv) as a result of a reclassification of the Company's capital stock
solely into shares of one or more classes or series of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock, (v)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged and (vi) purchases of common stock in
connection with the satisfaction by the Company of its obligations under any of
the Company's benefit plans for its and its
6
<PAGE> 7
Subsidiaries' directors, officers or employees or any of the Company's dividend
reinvestment plans) if at such time (x) a Debenture Event of Default shall have
occurred and be continuing, (y) the Company shall be in default with respect to
its payment of any obligations under the Guarantee or (z) the Company shall have
given notice of its election of an Extension Period, or any extension thereof,
as provided in the Indenture and shall not have rescinded such notice, and such
Extension Period, or any extension thereof, shall have commenced and not yet
terminated.
The Company has also agreed (a) to maintain 100 percent
ownership of the Common Trust Securities; PROVIDED, HOWEVER, that any permitted
successor of the Company under the Indenture may succeed to the Company's
ownership of the Common Trust Securities, (b) to use its reasonable efforts to
cause the Trust (i) to remain a statutory business trust, except in connection
with the distribution of Debentures to the holders of Trust Securities in
liquidation of the Trust, the redemption of all of the Trust Securities of the
Trust, or certain mergers, consolidations or amalgamations, each as permitted by
the Amended and Restated Declaration of Trust of the Trust, dated as of July 8,
1999, among the Company, as sponsor, and certain of the trustees of the Trust
and (ii) to continue not to be classified as other than a grantor trust for
United States Federal income tax purposes and (c) to use its reasonable efforts
to cause each holder of Trust Securities (or, for so long as Trust Securities
are pledged pursuant to the Pledge Agreement, dated as of July 8, 1999, among
the Company, a collateral agent, and the Call Option Holder, the Units) to be
treated as owning an undivided beneficial ownership interest in the Debentures.
In the event the call options are not exercised by the Call
Option Holder, each Holder of Debentures will have the right (a "Debenture Put
Option") to require the Company to repurchase such Debentures, on July 1, 2002
(the "Put Option Date"), for a purchase price (the "Put Price") equal to the
aggregate principal amount thereof plus unpaid interest accrued thereon up to
but not including the Put Option Date, but only if the cash received on the
exercise of such option is used to settle the purchase contracts between the
Company and The Bank of New York as Master Unit Agent for the Units, secured
thereby.
The Holder of this Debenture and the Put Agent (the "Put
Agent" which initially will be The Chase Manhattan Bank and subsequently, any
successor thereto), on behalf of Holders whose Debentures have been delivered to
the Put Agent for the purpose of exercising the Put Option related to such
Debentures, may exercise the Debenture Put Option related to this Debenture by
presenting and surrendering this Debenture, at the offices of the Trustee, with
the form of "Notice of Exercise of Put Right" on the reverse
7
<PAGE> 8
side of this Debenture completed and executed as indicated, by 10:00 a.m., New
York City time, on the Put Option Date.
In the event of the exercise of the Debenture Put Option with
respect to this Debenture in part only, a new Debenture or Debentures for the
portion hereof not repurchased will be issued in the name of the Holder upon the
cancellation hereof.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than a majority in
principal amount of the outstanding Securities of each series to be affected.
The Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the outstanding Securities of each series, on
behalf of the Holders of all Securities of such series, to waive, with respect
to the Securities of such series, compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Debenture
will be conclusive and binding upon such Holder and upon all future Holders of
this Debenture and of any Debenture issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Debenture.
Holders of Debentures may not enforce their rights pursuant to
the Indenture or the Debentures except as provided in the Indenture. No
reference herein to the Indenture and no provision of this Debenture or of the
Indenture will alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of, and premium, if any, and interest on
and the Put Price with respect to this Debenture at the times, places and rates,
herein prescribed.
The Debentures of this series are issuable only in registered
form, without coupons, in minimum denominations of $41.50 and integral multiples
thereof and of $1,000 and integral multiples thereof. As provided in the
Indenture and subject to certain limitations therein specified and to the
limitations described below, if applicable, Debentures of this series are
exchangeable for Debentures of this series of like aggregate principal amount of
a different authorized denomination, as requested by the Holder surrendering the
same.
As provided in the Indenture and subject to certain
limitations therein specified and to the limitations described below, if
applicable, the transfer of this Debenture is registerable in the Register upon
surrender of this Debenture for registration of
8
<PAGE> 9
transfer at the office or agency of the Company maintained for that purpose duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar (which will initially be the
Trustee at its principal corporate trust office located in Dearborn, Michigan)
duly executed by the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Debentures of this series with like terms and
conditions, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
Prior to due presentment of this Debenture for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Debenture is registered as the owner
hereof for all purposes, whether or not this Debenture be overdue and
notwithstanding any notation of ownership or other writing hereon, and none of
the Company, the Trustee or any such agent will be affected by notice to the
contrary.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to herein, or its successor as Trustee, or its
Authenticating Agent, by manual signature of an authorized signatory, this
Debenture will not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
No recourse shall be had for the repayment of the principal of
or premium, if any, on interest on or the Put Price in respect of this
Debenture, or for any claim based heron, or otherwise in respect hereof, or
based on or in respect of the Indenture, against any incorporator, stockholder,
officer or director, past, present or future, as such, of the Company or any
predecessor or successor Person, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.
The Company agrees, and each holder of a beneficial ownership
interest in any Debenture shall by the acquisition of such interest be deemed to
have agreed, that for United States Federal income tax purposes, the Debentures
are intended to constitute indebtedness.
The Indenture and the Debentures will be governed by and
construed in accordance with the laws of the State of New York.
All capitalized terms used but not defined in this Debenture
will have the meanings assigned to them in the Indenture; and all references in
the Indenture to "Security" or "Securities" will be deemed to include this
Debenture.
9
<PAGE> 10
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
Date: July 8, 1999 CMS ENERGY CORPORATION
By /s/ ALAN M. WRIGHT
---------------------------------------
Name: Alan M. Wright
Title: Senior Vice President and Chief
Financial Officer
Attest: /s/ THOMAS A. McNISH
-----------------------
10
<PAGE> 11
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: July 8, 1999 THE BANK OF NEW YORK
as Property Trustee
By /s/ Michael Culhane
---------------------------------------
Authorized Signatory
11
<PAGE> 12
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) this Debenture to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Debenture on the books of the Company. The agent may
substitute another to act for him or her.
Date:
---------------------------------
Signature:
---------------------------------
(Sign exactly as your name appears on the other side of this
Debenture) Signature Guarantee(1):
------------------------------------
- ----------
(1) Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the [Registrar], which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
12
<PAGE> 13
NOTICE OF EXERCISE OF PUT RIGHT
The undersigned holder of this Debenture (or the put agent on
behalf of such holder) hereby gives notice and irrevocably exercises the Junior
Subordinated Debenture Put requiring the Company to repurchase this Debenture,
or the portion designated below, for the aggregate principal amount thereof plus
any unpaid interest accrued on this Debenture pursuant to the terms and subject
to the conditions of the Debenture and the Indenture, dated as of June 1, 1997
(as amended, supplemented or modified, the "Indenture") between the Company and
The Bank of New York, as trustee by 10:00 a.m., New York City time, on July 1,
2002. If any portion of the Debenture not to be repurchased is to be registered
in the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Date:
-------------------------
Principal amount of the Debenture to be repurchased ($41.50 or integral
multiples thereof or $1,000.00 or integral multiples thereof):
----------------
Signature:
----------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Debenture
Please print or type name and address, including zip code, and social security
or other identifying number
- --------------------
- --------------------
- --------------------
13
<PAGE> 14
If any portion of the Debenture is to be registered in the name of and delivered
to a Person other than the holder hereof please print or type name and address,
including zip code, and social security or other identifying number
- --------------------
- --------------------
- --------------------
Signature Guarantee(2):
--------------------
- --------------------
(2) If this Notice of Exercise of Put Right is signed by any Person other
than the registered holder of this Debenture, the Signature must be
guaranteed by an "eligible guarantor institution" that is a bank,
stockbroker, savings and loan association or credit union meeting the
requirements of the [Registrar], which requirements include membership
or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities and Exchange Act of 1934,
as amended.
14
<PAGE> 1
Exhibit 4(o)
Trust Preferred Securities Guarantee Agreement
Between
CMS Energy Corporation
(as Guarantor)
and
The Bank of New York
(as Trustee)
dated as of
July 8, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions................................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 Trust Indenture Act; Application...........................................6
SECTION 2.02 Lists of Holders...........................................................6
SECTION 2.03 Reports by the Trust Preferred Securities Guarantee
Agreement Trustee..........................................................7
SECTION 2.04 Periodic Reports to Trust Preferred Securities Guarantee
Agreement Trustee..........................................................7
SECTION 2.05 Evidence of Compliance with Conditions Precedent...........................8
SECTION 2.06 Guarantee Events of Default; Waiver........................................8
SECTION 2.07 Guarantee Event of Default; Notice.........................................8
SECTION 2.08 Conflicting Interests......................................................9
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST PREFERRED SECURITIES GUARANTEE
AGREEMENT TRUSTEE
SECTION 3.01 Powers and Duties of the Trust Preferred Securities Guarantee
Agreement Trustee..........................................................9
SECTION 3.02 Certain Rights of Trust Preferred Securities Guarantee
Agreement Trustee.........................................................12
SECTION 3.03 Not Responsible for Recitals or Issuance of Trust
Preferred Securities Guarantee Agreement..................................15
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE IV
TRUST PREFERRED SECURITIES
GUARANTEE AGREEMENT TRUSTEE
SECTION 4.01 Trust Preferred Securities Guarantee Agreement Trustee;
Eligibility...............................................................15
SECTION 4.02 Appointment, Removal and Resignation of Trust
Preferred Securities Guarantee Agreement Trustees.........................16
ARTICLE V
GUARANTEE
SECTION 5.01 Guarantee.................................................................17
SECTION 5.02 Waiver of Notice and Demand...............................................17
SECTION 5.03 Obligations Not Affected..................................................17
SECTION 5.04 Rights of Holders.........................................................19
SECTION 5.05 Guarantee of Payment......................................................19
SECTION 5.06 Subrogation...............................................................20
SECTION 5.07 Independent Obligations...................................................20
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.01 Limitation of Transactions................................................20
SECTION 6.02 Subordination.............................................................21
ARTICLE VII
TERMINATION
SECTION 7.01 Termination...............................................................22
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE VIII
COMPENSATION AND EXPENSES
OF TRUST PREFERRED SECURITIES
GUARANTEE AGREEMENT TRUSTEE
SECTION 8.01 Compensation and Expenses of Trust Preferred Securities
Guarantee Agreement Trustee...............................................23
ARTICLE IX
INDEMNIFICATION
SECTION 9.01 Exculpation...............................................................24
SECTION 9.02 Indemnification...........................................................24
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Successors and Assigns....................................................25
SECTION 10.02 Amendments................................................................25
SECTION 10.03 Notices...................................................................25
SECTION 10.04 Benefit...................................................................27
SECTION 10.05 Interpretation............................................................27
SECTION 10.06 Governing Law.............................................................28
SECTION 10.07 Counterparts..............................................................28
</TABLE>
iii
<PAGE> 5
TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
This Trust Preferred Securities Guarantee Agreement, dated as
of July 8, 1999, is executed and delivered by CMS Energy Corporation, a Michigan
corporation (the "Guarantor"), and The Bank of New York, a New York banking
corporation, as trustee, for the benefit of the Holders (as defined herein)
from time to time of the Trust Preferred Securities (as defined herein) of CMS
Energy Trust, a Michigan statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of July 8, 1999 among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders, from time to
time, of undivided beneficial ownership interests in the assets of the Issuer,
the Issuer is issuing up to $300,875,000 aggregate liquidation amount of its
8.625% Trust Preferred Securities, (liquidation amount $41.50 per Trust
Preferred Security) (the "Trust Preferred Securities") and up to $9,305,420.50
aggregate liquidation amount of its 8.625% Common Securities (the "Common
Securities" and together with the Trust Preferred Securities, the "Trust
Securities"), each representing beneficial ownership interests in the assets of
the Issuer and having the terms set forth in the Declaration;
WHEREAS, the Trust Securities will be issued by the Issuer and
the proceeds thereof will be used to purchase the Debentures (as defined herein)
of the Guarantor which will be deposited with The Bank of New York, as Property
Trustee under the Declaration, as trust assets;
WHEREAS, as an incentive for the Holders to purchase Trust
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth herein, to pay to the Holders the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein; and
WHEREAS, the Guarantor is executing and delivering a Guarantee
Agreement (the "Common Trust Securities Guarantee") with substantially identical
terms to this Trust Preferred Securities Guarantee Agreement, for the benefit of
the holders of the Common Securities, except that if a Guarantee Event of
Default (as defined herein) has occurred and is continuing, the rights of the
holders of the Common Securities to receive the Guarantee Payments under the
Common Trust Securities Guarantee are subordinated, to the extent and in the
manner set forth in the
<PAGE> 6
Common Trust Securities Guarantee, to the rights of Holders to receive Guarantee
Payments under this Trust Preferred Securities Guarantee Agreement.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Trust Preferred Securities, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Trust
Preferred Securities Guarantee Agreement for the benefit of the Holders from
time to time of the Trust Preferred Securities.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. As used in this Trust Preferred
Securities Guarantee Agreement, the terms set forth below shall, unless the
context otherwise requires, have the following meanings. Capitalized or
otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Declaration as in effect on the date
hereof unless otherwise indicated.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person, provided, however that an Affiliate
of the Guarantor shall not be deemed to include the Issuer. For the purposes of
this definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Common Securities" has the meaning specified in the recitals
to this Trust Preferred Securities Guarantee Agreement.
"Debentures" means the series of subordinated debt securities
of the Guarantor designated the 8.625% Junior Subordinated Deferrable Interest
Debentures due July 1, 2004 held by the Property Trustee (as defined in the
Declaration) of the
Issuer.
"Declaration" has the meaning specified in the recitals to
this Trust Preferred Securities Guarantee Agreement.
2
<PAGE> 7
"Distribution" shall have the same meaning as indicated in the
Declaration.
"Final Redemption Price" means the final redemption price of
the Trust Preferred Securities, including all accumulated and unpaid
Distributions to the date of redemption.
"Guarantee Event of Default" has the meaning specified in
Section 2.06.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Trust Preferred
Securities, to the extent not paid or made by or on behalf of the Issuer: (i)
any accumulated and unpaid Distributions (as defined in the Declaration)
required to be paid on the Trust Preferred Securities, to the extent the Issuer
shall have funds on hand legally available therefor at such time, and (ii) the
Final Redemption Price with respect to the Trust Preferred Securities
outstanding on the Maturity Date of the Debentures (as defined in the Indenture)
to the extent the Issuer shall have funds on hand legally available therefor at
such time. If a Guarantee Event of Default has occurred and is continuing, no
Guarantee Payments under the Common Trust Securities Guarantee with respect to
the Common Trust Securities or any guarantee payment under any Other Common
Trust Securities Guarantees shall be made until the Holders shall be paid in
full the Guarantee Payments to which they are entitled under this Trust
Preferred Securities Guarantee Agreement.
"Guarantor" has the meaning specified in the recital to this
Trust Preferred Securities Guarantee Agreement.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Trust Preferred Securities or Normal Units that is
deemed, under the Declaration, to be a holder of any Trust Preferred Securities;
provided, however, that in determining whether the holders of the requisite
percentage of Trust Preferred Securities have given any request, notice, consent
or waiver hereunder, "Holder" shall not include the Guarantor, the Trust
Preferred Securities Guarantee Agreement Trustee or any Affiliate of the
Guarantor or the Trust Preferred Securities Guarantee Agreement Trustee.
"Indemnified Person" means the Trust Preferred Securities
Guarantee Agreement Trustee, any Affiliate of the Trust Preferred Securities
Guarantee Agreement Trustee, or any officers, directors, shareholders, members,
partners,
3
<PAGE> 8
employees, representatives, nominees, custodians or agents of the Trust
Preferred Securities Guarantee Agreement Trustee.
"Indenture" means the Junior Subordinated Indenture dated as
of June 1, 1997, among the Guarantor and The Bank of New York, as trustee, as
the same may be amended or supplemented from time to time in accordance with the
terms hereof, pursuant to which the Debentures are to be issued to the Property
Trustee.
"Majority in liquidation amount of the Trust Preferred
Securities" means, except as provided by the Trust Indenture Act, Trust
Preferred Securities representing more than 50% of the liquidation amount of all
then outstanding Trust Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two of the following: the Chairman of the Board, Vice
Chairman of the Board, Chief Executive Officer, the President or a Vice
President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of such Person. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Trust Preferred
Securities Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Other Common Trust Securities Guarantees" shall have the same
meaning as "Other Guarantees" in the Common Trust Securities Guarantee.
4
<PAGE> 9
"Other Debentures" means all junior subordinated debentures
issued by the Guarantor from time to time and sold to trusts established or to
be established by the Guarantor, in each case similar to the Issuer.
"Other Guarantees" means all guarantees issued by the
Guarantor with respect to securities similar to the Trust Preferred Securities
issued by other trusts to be established by the Guarantor, in each case similar
to the Issuer.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Trust Preferred Securities Guarantee Agreement" means this
Trust Preferred Securities Guarantee Agreement, dated as of July 8, 1999,
between CMS Energy Corporation and the Trust Preferred Securities Guarantee
Agreement Trustee.
"Trust Preferred Securities" has the meaning specified in the
recitals to this Trust Preferred Securities Guarantee Agreement.
"Trust Preferred Securities Guarantee Agreement Trustee" means
The Bank of New York until a Successor Trust Preferred Securities Guarantee
Agreement Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Trust Preferred Securities Guarantee Agreement and
thereafter means each such Successor Trust Preferred Securities Guarantee
Agreement Trustee.
"Responsible Officer" means, with respect to the Trust
Preferred Securities Guarantee Agreement Trustee, any Vice President, any
Assistant Vice President, the Secretary, any Assistant Secretary, the Treasurer,
any Assistant Treasurer, any financial services officer or any other officer of
the Corporate Trust Office of the Trust Preferred Securities Guarantee Agreement
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Senior Indebtedness" shall have the same meaning as indicated
in the Indenture.
5
<PAGE> 10
"Successor Trust Preferred Securities Guarantee Agreement
Trustee" means a successor Trust Preferred Securities Guarantee Agreement
Trustee possessing the qualifications to act as Trust Preferred Securities
Guarantee Agreement Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trust Securities" has the meaning specified in the recitals
to this Trust Preferred Securities Guarantee Agreement.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Trust Preferred Securities Guarantee Agreement is
subject to the provisions of the Trust Indenture Act that are required to be
part of this Trust Preferred Securities Guarantee Agreement and shall, to the
extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Trust
Preferred Securities Guarantee Agreement limits, qualifies or conflicts with the
duties imposed by Section 310 to 317, inclusive, of the Trust Indenture Act,
through operation of Section 318(c) thereof, such imposed duties shall control.
If any provision of this Trust Preferred Securities Guarantee Agreement modifies
or excludes any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Trust Preferred
Securities Guarantee Agreement as so modified or excluded, as the case may be.
SECTION 2.2 Lists of Holders.
(a) The Guarantor shall furnish or cause to be furnished to
the Trust Preferred Securities Guarantee Agreement Trustee (a) on a quarterly
basis on each regular record date for the Debentures, a list, in such form as
the Trust Preferred Securities Guarantee Agreement Trustee may reasonably
require, of the names and addresses of the Holders of the Trust Preferred
Securities ("List of Holders") as of a date not more than 15 days prior to the
delivery thereof, and (b) at such other times
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as the Trust Preferred Securities Guarantee Agreement Trustee may request in
writing, within 30 days after the receipt by the Guarantor of any such request,
a List of Holders as of a date not more than 15 days prior to the time such list
is furnished, in each case to the extent such information is in the possession
or control of the Guarantor and has not otherwise been received by the Trust
Preferred Securities Guarantee Agreement Trustee in its capacity as such;
provided, however, that the Guarantor shall not be obligated to provide such
List of Holders at any time the List of Holders does not differ from the most
recent List of Holders given to the Trust Preferred Securities Guarantee
Agreement Trustee by the Guarantor. The Trust Preferred Securities Guarantee
Agreement Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Trust Preferred Securities Guarantee Agreement Trustee
shall comply with its obligations under Sections 311(a), 311(b) and Section
312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Trust Preferred Securities
Guarantee Agreement Trustee. Not later than May 15 of each year, commencing May
15, 2000, the Trust Preferred Securities Guarantee Agreement Trustee shall
provide to the Holders such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by Section 313(a)
of the Trust Indenture Act. The Trust Preferred Securities Guarantee Agreement
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Trust Preferred Securities
Guarantee Agreement Trustee. The Guarantor shall provide to the Trust Preferred
Securities Guarantee Agreement Trustee, the Securities and Exchange Commission
and the Holders such documents, reports and information as required by Section
314 (if any) and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act; provided, however, that such compliance
certificate shall be delivered on or before 120 days after the end of each
fiscal year of the Guarantor. Delivery of such reports, information and
documents to the Trust Preferred Securities Guarantee Agreement Trustee is for
informational purposes only and the Trust Preferred Securities Guarantee
Agreement Trustee's receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein, including the Guarantor's compliance with any of its covenants
hereunder (as to which the Trust Preferred Securities Guarantee Agreement
Trustee is entitled to rely exclusively on Officers' Certificates).
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SECTION 2.5 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Trust Preferred Securities Guarantee
Agreement Trustee such evidence of compliance with conditions precedent, if any,
provided for in this Trust Preferred Securities Guarantee Agreement that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Guarantee Events of Default; Waiver. (a) An event
of default under this Trust Preferred Securities Guarantee Agreement will occur
upon the failure of the Guarantor to perform any of its payment or other
obligations hereunder (a "Guarantee Event of Default"); provided, however, that,
other than with respect to a default on any payment under this Trust Preferred
Securities Guarantee Agreement, the Guarantor shall have received notice of
default and shall not have cured such default within 90 days after receipt of
such notice.
(b) The Holders of a Majority in liquidation amount of the
Trust Preferred Securities may, by vote, on behalf of the Holders of all of the
Trust Preferred Securities, waive any past Guarantee Event of Default and its
consequences. Upon such waiver, any such Guarantee Event of Default shall cease
to exist, and any Guarantee Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Trust Preferred Securities
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Guarantee Event of Default or impair any right consequent thereon.
SECTION 2.7 Guarantee Event of Default; Notice.
(a) The Trust Preferred Securities Guarantee Agreement Trustee
shall, within 90 days after the occurrence of a Guarantee Event of Default,
transmit by mail, first class postage prepaid, to the Holders of the Trust
Preferred Securities, notices of all Guarantee Events of Default known to the
Trust Preferred Securities Guarantee Agreement Trustee, unless such Guarantee
Event of Default has been cured before the giving of such notice, provided that,
except in the case of a default in the payment of a Guarantee Payment, the Trust
Preferred Securities Guarantee Agreement Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors and/or Responsible Officers of the
Trust Preferred Securities Guarantee Agreement Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Trust Preferred Securities.
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(b) The Trust Preferred Securities Guarantee Agreement Trustee
shall not be deemed to have knowledge of any Guarantee Event of Default unless
the Trust Preferred Securities Guarantee Agreement Trustee shall have received
written notice, or a Responsible Officer charged with the administration of this
Trust Preferred Securities Guarantee Agreement shall have obtained actual
knowledge, of such Guarantee Event of Default.
SECTION 2.8 Conflicting Interests. The Declaration and the
Indenture shall be deemed to be specifically described in this Trust Preferred
Securities Guarantee Agreement for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Preferred
Securities Guarantee Agreement Trustee.
(a) This Trust Preferred Securities Guarantee Agreement shall
be held by the Trust Preferred Securities Guarantee Agreement Trustee for the
benefit of the Holders of the Trust Preferred Securities, and the Trust
Preferred Securities Guarantee Agreement Trustee shall not transfer this Trust
Preferred Securities Guarantee Agreement to any Person except a Holder of Trust
Preferred Securities exercising his or her rights pursuant to Section 5.04(iv)
or to a Successor Trust Preferred Securities Guarantee Agreement Trustee on
acceptance by such Successor Trust Preferred Securities Guarantee Agreement
Trustee of its appointment to act as Successor Trust Preferred Securities
Guarantee Agreement Trustee. The right, title and interest of the Trust
Preferred Securities Guarantee Agreement Trustee shall automatically vest in any
Successor Trust Preferred Securities Guarantee Agreement Trustee, upon
acceptance by such Successor Trust Preferred Securities Guarantee Agreement
Trustee of its appointment hereunder, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Trust Preferred
Securities Guarantee Agreement Trustee.
(b) If a Guarantee Event of Default actually known to a
Responsible Officer has occurred and is continuing, the Trust Preferred
Securities
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Guarantee Agreement Trustee shall enforce this Trust Preferred Securities
Guarantee Agreement for the benefit of the Holders of the Trust Preferred
Securities.
(c) The Trust Preferred Securities Guarantee Agreement
Trustee, before the occurrence of any Guarantee Event of Default and after the
curing of all Guarantee Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Trust Preferred Securities Guarantee Agreement, and no implied covenants shall
be read into this Trust Preferred Securities Guarantee Agreement against the
Trust Preferred Securities Guarantee Agreement Trustee. In case a Guarantee
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.06), and is actually known to a Responsible Officer, the Trust
Preferred Securities Guarantee Agreement Trustee shall exercise such of the
rights and powers vested in it by this Trust Preferred Securities Guarantee
Agreement, and use the same degree of care and skill in its exercise thereof,
as a prudent individual would exercise or use under the circumstances in the
conduct of his or her own affairs.
(d) No provision of this Trust Preferred Securities Guarantee
Agreement shall be construed to relieve the Trust Preferred Securities Guarantee
Agreement Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Guarantee Event of
Default and after the curing or waiving of all such Guarantee Events of
Default that may have occurred:
(A) the duties and obligations of the Trust
Preferred Securities Guarantee Agreement Trustee shall be
determined solely by the express provisions of this Trust
Preferred Securities Guarantee Agreement, (including pursuant
to Section 2.01) and the Trust Preferred Securities Guarantee
Agreement Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Trust Preferred Securities Guarantee
Agreement and no implied covenants or obligations shall be
read into this Trust Preferred Securities Guarantee Agreement
against the Trust Preferred Securities Guarantee Agreement
Trustee; and
(B) in the absence of bad faith on the part
of the Trust Preferred Securities Guarantee Agreement Trustee,
the Trust Preferred Securities Guarantee Agreement Trustee may
conclusively
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rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Trust Preferred Securities Guarantee
Agreement Trustee and conforming to the requirements of this
Trust Preferred Securities Guarantee Agreement; but in the
case of any such certificates or opinions that by any
provision hereof or of the Trust Indenture Act are
specifically required to be furnished to the Trust Preferred
Securities Guarantee Agreement Trustee, the Trust Preferred
Securities Guarantee Agreement Trustee shall be under a duty
to examine the same to determine whether or not they conform
to the requirements of this Trust Preferred Securities
Guarantee Agreement;
(ii) the Trust Preferred Securities Guarantee
Agreement Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Trust Preferred Securities
Guarantee Agreement Trustee, unless it shall be proved that the Trust
Preferred Securities Guarantee Agreement Trustee was negligent in
ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Trust Preferred Securities Guarantee
Agreement Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation
amount of the Trust Preferred Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Trust Preferred Securities Guarantee Agreement Trustee, or exercising
any trust or power conferred upon the Trust Preferred Securities
Guarantee Agreement Trustee under this Trust Preferred Securities
Guarantee Agreement; and
(iv) no provision of this Trust Preferred Securities
Guarantee Agreement shall require the Trust Preferred Securities
Guarantee Agreement Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any
of its duties or in the exercise of any of its rights or powers, if the
Trust Preferred Securities Guarantee Agreement Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Trust
Preferred Securities Guarantee Agreement or adequate indemnity against
such risk or liability is not reasonably assured to it.
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SECTION 3.2 Certain Rights of Trust Preferred Securities
Guarantee Agreement Trustee.
(a) Subject to the provisions of Section 3.01:
(i) The Trust Preferred Securities Guarantee
Agreement Trustee may conclusively rely and shall be fully protected in
acting, or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document (whether in its original or facsimile form)
reasonably believed by it to be genuine and to have been signed, sent
or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor
contemplated by this Trust Preferred Securities Guarantee Agreement
shall be sufficiently evidenced by an Officers' Certificate unless
otherwise prescribed herein.
(iii) Whenever, in the administration of this Trust
Preferred Securities Guarantee Agreement, the Trust Preferred
Securities Guarantee Agreement Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting
any action hereunder, the Trust Preferred Securities Guarantee
Agreement Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
rely upon an Officers' Certificate which, upon receipt of such request
from the Trust Preferred Securities Guarantee Agreement Trustee, shall
be promptly delivered by the Guarantor.
(iv) The Trust Preferred Securities Guarantee
Agreement Trustee may (at the expense of the Guarantor) consult with
legal counsel, and the advice or opinion of such legal counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such legal counsel may be legal counsel to the Guarantor or any of its
Affiliates and may be one of its employees. The Trust Preferred
Securities Guarantee Agreement Trustee shall have the right at any time
to seek instructions concerning the administration of this Trust
Preferred Securities Guarantee Agreement from any court of competent
jurisdiction.
(v) The Trust Preferred Securities Guarantee
Agreement Trustee shall be under no obligation to exercise any of the
rights or powers
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vested in it by this Trust Preferred Securities Guarantee Agreement at
the request or direction of any Holder, unless such Holder shall have
provided to the Trust Preferred Securities Guarantee Agreement Trustee
such adequate security and indemnity as would satisfy a reasonable
person in the position of the Trust Preferred Securities Guarantee
Agreement Trustee, against the costs, expenses (including attorneys'
fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Trust Preferred Securities
Guarantee Agreement Trustee; provided that nothing contained in this
Section 3.02(a)(v) shall be taken to relieve the Trust Preferred
Securities Guarantee Agreement Trustee, upon the occurrence of a
Guarantee Event of Default, of its obligation to exercise the rights
and powers vested in it by this Trust Preferred Securities Guarantee
Agreement.
(vi) The Trust Preferred Securities Guarantee
Agreement Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Trust Preferred Securities Guarantee
Agreement Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit and if the
Trust Preferred Securities Guarantee Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally or by agent
or attorney at the sole cost of the Guarantor and shall incur no
liability or additional liability of any kind by reason of such inquiry
or investigation.
(vii) The Trust Preferred Securities Guarantee
Agreement Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, and the Trust Preferred Securities Guarantee Agreement
Trustee shall not be responsible for any misconduct or negligence on
the part of any such agent or attorney appointed with due care by it
hereunder.
(viii) Whenever in the administration of this Trust
Preferred Securities Guarantee Agreement the Trust Preferred Securities
Guarantee Agreement Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Trust Preferred Securities Guarantee
Agreement Trustee (A) may request instructions from the Holders of the
Trust Preferred Securities, (B) may
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refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (C) shall be protected in
acting in accordance with such instructions.
(ix) The Trust Preferred Securities Guarantee
Agreement Trustee shall have no duty to see any recording, filing or
registration of any instrument (or any re-recording, refiling or
re-registration thereof).
(x) Any action taken by the Trust Preferred
Securities Guarantee Agreement Trustee or its agents hereunder shall
bind the Holders, and the signature of the Trust Preferred Securities
Guarantee Agreement Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be required
to inquire as to the authority of the Trust Preferred Securities
Guarantee Agreement Trustee to so act or as to its compliance with any
of the terms and provisions of this Trust Preferred Securities
Guarantee Agreement, both of which shall be conclusively evidenced by
the Trust Preferred Securities Guarantee Agreement Trustee's or its
agent's taking such action.
(xi) The Trust Preferred Securities Guarantee
Agreement Trustee shall not be liable for any action taken, suffered or
omitted to be taken by it in good faith, without negligence, and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Trust Preferred Securities
Guarantee Agreement.
(b) No provision of this Trust Preferred Securities Guarantee
Agreement shall be deemed to impose any duty or obligation on the Trust
Preferred Securities Guarantee Agreement Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Trust Preferred
Securities Guarantee Agreement Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Trust Preferred Securities Guarantee Agreement Trustee shall be
construed to be a duty to act in accordance with such power and authority.
SECTION 3.3 Not Responsible for Recitals or Issuance of Trust
Preferred Securities Guarantee Agreement. The recitals contained in this Trust
Preferred Securities Guarantee Agreement shall be taken as the statements of the
Guarantor, and the Trust Preferred Securities Guarantee Agreement Trustee does
not
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assume any responsibility for their correctness. The Trust Preferred Securities
Guarantee Agreement Trustee makes no representation as to the validity or
sufficiency of this Trust Preferred Securities Guarantee Agreement.
ARTICLE IV
TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT TRUSTEE
SECTION 4.1 Trust Preferred Securities Guarantee Agreement
Trustee; Eligibility.
(a) There shall at all times be a Trust Preferred
Securities Guarantee Agreement Trustee which shall
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000), and shall be
a corporation meeting the requirements of Section 310(a) of the Trust
Indenture Act. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of a supervising
or examining authority, then, for the purposes of this Section
4.01(a)(ii) and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report
of condition so published.
(b) If at any time the Trust Preferred Securities Guarantee
Agreement Trustee shall cease to be eligible to so act under Section 4.01(a),
the Trust Preferred Securities Guarantee Agreement Trustee shall immediately
resign in the manner and with the effect set out in Section 4.02(c).
(c) If the Trust Preferred Securities Guarantee Agreement
Trustee has or shall acquire any "conflicting interest" within the meaning of
Section 310(b) of the Trust Indenture Act, the Trust Preferred Securities
Guarantee Agreement Trustee and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
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SECTION 4.2 Appointment, Removal and Resignation of Trust
Preferred Securities Guarantee Agreement Trustees.
(a) Subject to Section 4.02(b), the Trust Preferred Securities
Guarantee Agreement Trustee may be appointed or removed without cause at any
time by the Guarantor except during a Guarantee Event of Default.
(b) The Trust Preferred Securities Guarantee Agreement Trustee
shall not be removed until a Successor Trust Preferred Securities Guarantee
Agreement Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Trust Preferred Securities
Guarantee Agreement Trustee and delivered to the Guarantor.
(c) The Trust Preferred Securities Guarantee Agreement Trustee
appointed hereunder shall hold office until a Successor Trust Preferred
Securities Guarantee Agreement Trustee shall have been appointed or until its
removal or resignation. The Trust Preferred Securities Guarantee Agreement
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing executed by the Trust Preferred Securities Guarantee
Agreement Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Trust Preferred Securities Guarantee Agreement
Trustee has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Trust Preferred Securities Guarantee
Agreement Trustee and delivered to the Guarantor and the resigning Trust
Preferred Securities Guarantee Agreement Trustee.
(d) If no Successor Trust Preferred Securities Guarantee
Agreement Trustee shall have been appointed and accepted appointment as provided
in this Section 4.02 within 30 days after delivery to the Guarantor of an
instrument of resignation, the resigning Trust Preferred Securities Guarantee
Agreement Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Trust Preferred Securities
Guarantee Agreement Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Trust Preferred
Securities Guarantee Agreement Trustee.
(e) No Trust Preferred Securities Guarantee Agreement Trustee
shall be liable for the acts or omissions to act of any Successor Trust
Preferred Securities Guarantee Agreement Trustee.
(f) Upon termination of this Trust Preferred Securities
Guarantee Agreement or removal or resignation of the Trust Preferred Securities
Guarantee
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Agreement Trustee pursuant to this Section 4.2, the Guarantor shall pay to the
Trust Preferred Securities Guarantee Agreement Trustee all amounts due to the
Trust Preferred Securities Guarantee Agreement Trustee accrued to the date of
such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by or on behalf of the
Issuer), as and when due, regardless of any defense (other than the defense of
payment) right of set-off or counterclaim which the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand. The Guarantor hereby
waives notice of acceptance of the Trust Preferred Securities Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Trust
Preferred Securities Guarantee Agreement Trustee, the Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under this Trust Preferred
Securities Guarantee Agreement shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition relating to
the Trust Preferred Securities to be performed or observed by the
Issuer;
(b) the extension of time for the payment by the
Issuer of all or any portion of the Distributions (other than an
extension of time for payment of Distributions that results from the
extension of any interest
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payment period on the Debentures as so provided in the Indenture),
Final Redemption Price, liquidation Distribution or any other sums
payable under the terms of the Trust Preferred Securities or the
extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Trust Preferred Securities;
(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Trust Preferred Securities or any action on the part of
the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other similar
proceedings affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in,
the Trust Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
other wise constitute a legal or equitable discharge or defense of a
guarantor (other than payment of the underlying obligation)
(h) it being the intent of this Section 5.03 that the
obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders. The Guarantor expressly
acknowledges that: (i) this Trust Preferred Securities Guarantee Agreement will
be deposited with the Trust Preferred Securities Guarantee Agreement Trustee to
be held for the benefit of the Holders; (ii) the Trust Preferred Securities
Guarantee Agreement Trustee has the right to enforce this Trust Preferred
Securities Guarantee Agreement on behalf of the Holders; (iii) the Holders of a
Majority in liquidation
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amount of the Trust Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trust Preferred Securities Guarantee Agreement Trustee in respect of this Trust
Preferred Securities Guarantee Agreement or exercising any trust or power
conferred upon the Trust Preferred Securities Guarantee Agreement Trustee under
this Trust Preferred Securities Guarantee Agreement; provided, however, that
(subject to Section 3.01) the Trust Preferred Securities Guarantee Agreement
Trustee shall have the right to decline to follow any such direction if the
Trust Preferred Securities Guarantee Agreement Trustee shall determine that the
actions so directed would be unjustly prejudicial to the Holders not taking part
in such direction or if the Trust Preferred Securities Guarantee Agreement
Trustee, being advised by counsel, determines that the action or proceeding so
directed may not lawfully be taken or if the Trust Preferred Securities
Guarantee Agreement Trustee in good faith by its board of directors or trustees,
executive committee or a trust committee or directors or trustees and/or
Responsible Officers shall determine that the action or proceedings so directed
would involve the Trust Preferred Securities Guarantee Agreement Trustee in
personal liability; and (iv) any Holder of Trust Preferred Securities may
institute, to the extent permissible under applicable law, a legal proceeding
directly against the Guarantor to enforce its rights under this Trust Preferred
Securities Guarantee Agreement without first instituting a legal proceeding
against the Trust Preferred Securities Guarantee Agreement Trustee, the Issuer
or any other Person. The Guarantor waives any right or remedy to require that
any action be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment. This Trust Preferred
Securities Guarantee Agreement creates a guarantee of payment and not a
guarantee of collection. This Trust Preferred Securities Guarantee Agreement
will not be discharged except by payment of the Guarantee Payments in full
(without duplication of amounts theretofore paid by the Issuer) or upon
distribution of Debentures to Holders as provided in the Declaration.
SECTION 5.6 Subrogation. The Guarantor shall be subrogated to
all (if any) rights of the Holders against the Issuer in respect of any amounts
paid to the Holders by the Guarantor under this Trust Preferred Securities
Guarantee Agreement and shall have the right to waive payment by the Issuer
pursuant to Section 5.01; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to
enforce or exercise any rights which it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of payment
under this Trust Preferred Securities
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Guarantee Agreement, if, at the time of any such payment, any amounts are due
and unpaid under this Trust Preferred Securities Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Trust Preferred Securities and that the
Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Trust Preferred Securities
Guarantee Agreement notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1 Limitation of Transactions. So long as any Trust
Preferred Securities remain outstanding, the Guarantor shall not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Guarantor's capital stock (which
includes common and preferred stock), (ii) make any payment of principal,
interest or premium, if any, on or repay or repurchase or redeem any debt
securities of the Guarantor (including any Other Debentures) that rank pari
passu with or junior in right of payment to the Debentures or (iii) make any
guarantee payments with respect to any guarantee by the Guarantor of any
securities of any subsidiary of the Guarantor (including Other Guarantees) if
such guarantee ranks pari passu or junior in right of payment to the Debentures
(other than in the case of clauses (i), (ii) and (iii), (a) dividends or
distributions in shares of, or options, warrants or rights to subscribe for or
purchase shares of, common stock of the Guarantor, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Trust
Preferred Securities Guarantee Agreement, (d) as a result of a reclassification
of the Guarantor's capital stock solely into shares of one or more classes or
series of the Guarantor's capital stock or the exchange or the conversion of one
class or series of the Guarantor's capital stock for another class or series of
the Guarantor's capital stock, (e) the purchase of fractional interests in
shares of the Guarantor's capital stock pursuant to
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the conversion or exchange provisions of such capital stock or the security
being converted or exchanged and (f) purchases of the Guarantor's common stock
in connection with the satisfaction by the Guarantor of its obligations
(including purchases related to the issuance of such common stock or rights)
under any of the Guarantor's benefit plans for its and its subsidiaries'
directors, officers or employees or any of the Guarantor's dividend reinvestment
plans), if at such time (x) a Guarantee Event of Default or an Event of Default
(as defined in the Indenture) shall have occurred and be continuing, (y) if such
Debentures are held by the Property Trustee, the Guarantor shall be in default
with respect to its payment of any obligations under this Trust Preferred
Securities Guarantee Agreement or (z) the Guarantor shall have given notice of
its election of the exercise of its right to extend the interest payment period
pursuant to Section 3.01(b)(6) of the Indenture and any such extension shall
have commenced and not yet terminated.
SECTION 6.2 Subordination. (a) The obligations of the
Guarantor under this Trust Preferred Securities Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all present and future Senior Indebtedness of the
Guarantor to the extent and in the manner that the Debentures are subordinated
to all present and future Senior Indebtedness pursuant to the Indenture, it
being understood that the terms of Article XII of the Indenture shall apply to
the obligations of the Guarantor under this Trust Preferred Securities Guarantee
Agreement as if (x) such Article XII were set forth herein in full and (y) such
obligations were substituted for the term "Securities" appearing in such Article
XII and pari passu with the Debentures and Other Debentures. The obligations of
the Guarantor hereunder do not constitute Senior Indebtedness (as defined in the
Indenture) of the Guarantor.
(b) The right of the Guarantor to participate in any
distribution of assets of any of its subsidiaries upon any such subsidiary's
liquidation or reorganization or otherwise is subject to the prior claims of
creditors of that subsidiary, except to the extent the Guarantor may itself be
recognized as a creditor of that subsidiary. Accordingly, the Guarantor's
obligations under this Trust Preferred Securities Guarantee Agreement will be
effectively subordinated to all existing and future liabilities of the
Guarantor's subsidiaries, and claimants should look only to the assets of the
Guarantor for payments thereunder. This Trust Preferred Securities Guarantee
Agreement does not limit the incurrence or issuance of other secured or
unsecured debt of the Guarantor, including Senior Indebtedness of the Guarantor,
under any indenture that the Guarantor may enter into in the future or
otherwise.
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(c) If an Event of Default has occurred and is continuing, the
rights of holders of the Common Trust Securities of the Issuer to receive
payments under the Common Trust Securities Guarantee are subordinated to the
rights of Holders of Trust Preferred Securities to receive Guarantee Payments.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination. This Trust Preferred Securities
Guarantee Agreement shall terminate and be of no further force and effect upon
(i) full payment of the Final Redemption Price of all Trust Preferred
Securities, (ii) upon liquidation of the Issuer and the distribution of the
Debentures to Holders of Trust Preferred Securities or (iii) at such other time
when there are no longer any Trust Preferred Securities outstanding.
Notwithstanding the foregoing, this Trust Preferred Securities Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid with respect
to the Trust Preferred Securities or this Trust Preferred Securities Guarantee
Agreement. Guarantor will indemnify each Holder and hold it harmless from and
against any loss it may suffer in such circumstance.
ARTICLE VIII
COMPENSATION AND EXPENSES
OF TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT TRUSTEE
SECTION 8.1 Compensation and Expenses of Trust Preferred
Securities Guarantee Agreement Trustee. The Guarantor covenants and agrees to
pay to the Trust Preferred Securities Guarantee Agreement Trustee from time to
time, and the Trust Preferred Securities Guarantee Agreement Trustee shall be
entitled to, such compensation as shall be agreed to in writing between the
Guarantor and the Trust Preferred Securities Guarantee Agreement Trustee (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), and the Guarantor will pay or reimburse the Trust
Preferred Securities Guarantee Agreement Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trust
Preferred Securities Guarantee Agreement Trustee in accordance with any of the
provisions of this Trust Preferred Securities Guarantee Agreement (including
the reasonable compensation
22
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and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expenses, disbursements or advances as
may arise form its negligence or bad faith. The Guarantor also covenants to
indemnify the Trust Preferred Securities Guarantee Agreement Trustee (and its
officers, agents, directors and employees) for, and to hold it harmless against,
any and all loss, damage, claim, liability or expense including taxes (other
than taxes based on the income of the Trust Preferred Securities Guarantee
Agreement Trustee) incurred without negligence or bad faith on the part of the
Trust Preferred Securities Guarantee Agreement Trustee and arising out of or in
connection with the acceptance or administration of this guarantee, including
the costs and expenses of defending itself against any claim of liability in the
premises. The obligations of the Guarantor under this Article VIII to compensate
and indemnify the Trust Preferred Securities Guarantee Agreement Trustee and to
pay or reimburse the Trust Preferred Securities Guarantee Agreement Trustee for
expenses, disbursements and advances shall be secured by a lien prior to that
of the Trust Preferred Securities upon all property and funds held or collected
by the Trust Preferred Securities Guarantee Agreement Trustee as such, except
funds held in trust for the benefit of the holders of particular Trust Preferred
Securities.
The provisions of this Article VIII shall survive the
termination of this Trust Preferred Securities Guarantee Agreement.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Guarantor or
any Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in
accordance with this Trust Preferred Securities Guarantee Agreement and in a
manner that such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Trust Preferred
Securities Guarantee Agreement or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such acts
or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the
23
<PAGE> 28
Indemnified Person reasonably believes are within such other Person's
professional or expert competence, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 9.2 Indemnification. The Guarantor agrees to indemnify
each Indemnified Person for, and to hold each Indemnified Person harmless
against, any and all loss, liability, damage, claim or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The obligation
to indemnify as set forth in this Section 9.02 shall survive the termination of
this Trust Preferred Securities Guarantee Agreement.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Successors and Assigns. All guarantees and
agreements contained in this Trust Preferred Securities Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Trust
Preferred Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor or a conveyance, transfer
or lease of the Guarantor's properties that is permitted under Article Eight of
the Indenture and pursuant to which the successor or assignee agrees in writing
to perform the Guarantor's obligations hereunder, the Guarantor shall not
assign its obligations hereunder, and any purported assignment other than in
accordance with this provision shall be void.
SECTION 10.2 Amendments. Except with respect to any changes
that do not adversely affect the rights of Holders in any material respect (in
which case no consent of Holders will be required), this Trust Preferred
Securities Guarantee Agreement may be amended only with the prior approval of
the Holders of not less than a Majority in liquidation amount of the outstanding
Trust Preferred Securities (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting
24
<PAGE> 29
percentages are determined). The provisions of the Declaration concerning
meetings of Holders shall apply to the giving of such approval.
SECTION 10.3 Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be in writing,
duly signed by the party giving such notice, and delivered, telecopied or mailed
by first class mail as follows:
(a) if given to the Guarantor, to the address or
telecopy number set forth below or such other address as the Guarantor
may give notice of to the Trust Preferred Securities Guarantee
Agreement Trustee:
CMS Energy Corporation
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
Phone No.: (313) 436-9200
Facsimile No: (313) 436-9258
Attention: Corporate Secretary
(b) if given to the Issuer, at the address or
telecopy number set forth below or such other address as the Issuer may
give notice of to the Trust Preferred Securities Guarantee Agreement
Trustee:
CMS Energy Trust II
c/o CMS Energy Corporation
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
Phone No.: (313) 436-9200
Facsimile No: (313) 436-9258
Attention: Administrative Trustee
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with copy to:
The Bank of New York
101 Barclay Street
Floor 21W
New York, New York 10286
Phone No.: (212) 815-5909
Facsimile No: (212) 815-5915
Attention: Corporate Trust Administration
(c) if given to the Trust Preferred Securities
Guarantee Agreement Trustee, at the Trust Preferred Securities
Guarantee Agreement Trustee's address or telecopy number set forth
below:
The Bank of New York
101 Barclay Street
Floor 21W
New York, New York 10286
Phone No.: (212) 815-5909
Facsimile No: (212) 815-5915
Attention: Corporate Trust Administration
(d) if given to any Holder of Trust Preferred
Securities, at the address set forth on the books and records of the
Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 10.4 Benefit. This Trust Preferred Securities
Guarantee Agreement is solely for the benefit of the Holders, and is not
separately transferable from the Trust Preferred Securities.
SECTION 10.5 Interpretation. In this Trust Preferred
Securities Guarantee Agreement, unless the context otherwise requires:
26
<PAGE> 31
(a) all references in this Trust Preferred Securities
Guarantee Agreement to Articles and Sections are to Articles and
Sections of this Trust Preferred Securities Guarantee Agreement unless
otherwise specified;
(b) a term defined in the Trust Indenture Act has the
same meaning when used in this Trust Preferred Securities Guarantee
Agreement unless otherwise defined in this Trust Preferred Securities
Guarantee Agreement or unless the context otherwise requires;
(c) a reference to the singular includes the plural
and vice versa; and
(d) the masculine, feminine or neuter genders used
herein shall include the masculine, feminine and neuter genders.
SECTION 10.6 GOVERNING LAW. THIS TRUST PREFERRED SECURITIES
GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICTS OF LAWS PROVISIONS.
SECTION 10.7 Counterparts. This Trust Preferred Securities
Guarantee Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.
27
<PAGE> 32
THIS Trust Preferred Securities Guarantee Agreement is
executed as of the day and year first above written.
CMS ENERGY CORPORATION
By:/s/ Alan M. Wright
---------------------------------------
Name: Alan M. Wright
Title: Senior Vice President and
Chief Financial Officer
THE BANK OF NEW YORK,
as Trust Preferred Securities Guarantee
Agreement Trustee
By: /s/ Michael Culhane
---------------------------------------
Name: Michael Culhane
Title: Vice President
28
<PAGE> 1
Exhibit 4(t)
================================================================================
CMS ENERGY CORPORATION
AND
THE BANK OF NEW YORK
as Unit Agent
---------------------------
MASTER UNIT AGREEMENT
---------------------------
Dated as of July 8, 1999
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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RECITALS ......................................................................1
WITNESSETH.....................................................................1
ARTICLE I DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION..........................................1
SECTION 1.01 Definitions...............................................1
SECTION 1.02 Compliance Certificates and Opinions.....................10
SECTION 1.03 Form of Documents Delivered to Unit Agent................11
SECTION 1.04 Acts of Holders; Record Dates............................11
SECTION 1.05 Notices, etc. to Unit Agent and the Company..............13
SECTION 1.06 Notice to Holders; Waiver................................14
SECTION 1.07 Effect of Headings and Table of Contents.................14
SECTION 1.08 Successors and Assigns...................................14
SECTION 1.09 Separability Clause......................................14
SECTION 1.10 Benefits of Agreement....................................15
SECTION 1.11 Governing Law............................................15
SECTION 1.12 Legal Holidays...........................................15
SECTION 1.13 Counterparts.............................................16
SECTION 1.14 Inspection of Agreement..................................16
ARTICLE II UNIT CERTIFICATE FORMS.........................................16
SECTION 2.01 Forms of Unit Certificates Generally.....................16
SECTION 2.02 Form of Unit Agent's Certificate of
Authentication...........................................17
ARTICLE III THE UNITS......................................................17
SECTION 3.01 Title and Terms; Denominations...........................17
SECTION 3.02 Rights and Obligations Evidenced by the Unit
Certificates.............................................17
SECTION 3.03 Execution, Authentication, Delivery and Dating...........18
SECTION 3.04 Temporary Unit Certificates..............................19
SECTION 3.05 Registration; Registration of Transfer and Exchange......20
SECTION 3.06 Mutilated, Destroyed, Lost and Stolen Unit
Certificates.............................................22
SECTION 3.07 Persons Deemed Owners....................................23
SECTION 3.08 Cancellation.............................................24
</TABLE>
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SECTION 3.09 Substitution of Pledged Securities and Creation of
Stripped Units; Units Not Otherwise Separable...........25
SECTION 3.10 Payments on the Units....................................26
SECTION 3.11 No Consent to Assumption.................................27
ARTICLE IV THE PLEDGED SECURITIES.........................................27
SECTION 4.01 INTENTIONALLY LEFT BLANK.................................27
SECTION 4.02 Transfer of Pledged Securities Upon Occurrence
of Termination Event.....................................27
ARTICLE V THE PURCHASE CONTRACTS.........................................28
SECTION 5.01 Purchase of Shares of Common Stock.......................28
SECTION 5.02 Contract Payments........................................30
SECTION 5.03 Deferral of Payment Dates For Contract Payment...........31
SECTION 5.04 Payment of Purchase Price................................32
SECTION 5.05 Issuance of Shares of Common Stock.......................34
SECTION 5.06 Adjustment of Settlement Rate............................35
SECTION 5.07 Notice of Adjustments and Certain Other Events...........41
SECTION 5.08 No Fractional Shares.....................................42
SECTION 5.09 Charges and Taxes........................................42
SECTION 5.10 Termination Event; Notice................................43
SECTION 5.11 Early Settlement.........................................43
ARTICLE VI REMEDIES.......................................................45
SECTION 6.01 Unconditional Rights of Holders..........................45
SECTION 6.02 Restoration of Rights and Remedies.......................46
SECTION 6.03 Rights and Remedies Cumulative...........................46
SECTION 6.04 Delay or Omission Not Waiver.............................46
SECTION 6.05 Undertaking for Costs....................................46
SECTION 6.06 Waiver of Stay or Extension Laws.........................47
ARTICLE VII THE UNIT AGENT.................................................47
SECTION 7.01 Certain Duties and Responsibilities......................47
SECTION 7.02 Notice of Default........................................48
SECTION 7.03 Certain Rights of Unit Agent.............................48
SECTION 7.04 Not Responsible for Recitals or Issuance of Units........50
SECTION 7.05 May Hold Units...........................................50
SECTION 7.06 Money Held in Trust......................................50
SECTION 7.07 Compensation and Reimbursement...........................50
SECTION 7.08 Corporate Unit Agent Required; Eligibility...............51
SECTION 7.09 Resignation and Removal; Appointment of
Successor................................................51
</TABLE>
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SECTION 7.10 Acceptance of Appointment by Successor...................53
SECTION 7.11 Merger, Conversion, Consolidation or Succession
to Business..............................................53
SECTION 7.12 Preservation of Information; Communications to
Holders..................................................54
SECTION 7.13 No Obligations of Unit Agent.............................54
SECTION 7.14 Tax Compliance...........................................55
ARTICLE VIII SUPPLEMENTAL AGREEMENTS........................................55
SECTION 8.01 Supplemental Agreements Without Consent of
Holders...................................................55
SECTION 8.02 Supplemental Agreements with Consent of Holders...........56
SECTION 8.03 Execution of Supplemental Agreements......................58
SECTION 8.04 Effect of Supplemental Agreements.........................58
SECTION 8.05 Reference to Supplemental Agreements......................58
ARTICLE IX CONSOLIDATION, MERGER, SALE OR
CONVEYANCE.....................................................59
SECTION 9.01 Covenant Not to Merge, Consolidate, Sell or
Convey Property Except Under Certain
Conditions...............................................59
SECTION 9.02 Rights and Duties of Successor Corporation...............59
SECTION 9.03 Opinion of Counsel to Unit Agent.........................60
ARTICLE X COVENANTS......................................................60
SECTION 10.01 Performance Under Purchase Contracts.....................60
SECTION 10.02 Maintenance of Office or Agency..........................60
SECTION 10.03 Company to Reserve Common Stock..........................61
SECTION 10.04 Covenants as to Common Stock.............................61
SECTION 10.05 Statements of Officers of the Company as to
Default..................................................61
EXHIBIT A FORM OF NORMAL UNIT CERTIFICATE...............................A-1
SETTLEMENT INSTRUCTIONS......................................................A-8
REQUEST TO CREATE STRIPPED UNITS............................................A-10
EXHIBIT B FORM OF STRIPPED UNIT CERTIFICATE.............................B-1
SETTLEMENT INSTRUCTIONS......................................................B-7
</TABLE>
iii
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<TABLE>
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PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION............................AA-3
FORM OF REVERSE OF SECURITY.................................................AA-4
ASSIGNMENT..................................................................AA-6
NOTICE TO REQUIRE EXERCISE OF JUNIOR SUBORDINATED
DEBENTURE PUT OPTION...................................................AA-7
</TABLE>
iv
<PAGE> 6
MASTER UNIT AGREEMENT, dated as of July 8, 1999, between CMS Energy
Corporation, a Michigan corporation (the "Company"), and The Bank of New York, a
New York banking corporation, acting as unit agent for the Holders of Units from
time to time (the "Unit Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Unit Certificates evidencing the Units.
All things necessary to make the Company's obligations under the Units,
when the Unit Certificates are executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Unit Agent, as in this
Agreement provided, the valid obligations of the Company, and to constitute
these presents a valid agreement of the Company, in accordance with its terms,
have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the Units by
the Holders thereof, it is mutually agreed as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Definitions.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular; and
(b) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in Section 1.04.
<PAGE> 7
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Aggregate Call Option Exercise Consideration" has the meaning set forth in
the Call Option Agreement.
"Applicable Market Value" has the meaning specified in Section 5.01.
"Board of Directors" means the board of directors of the Company or a duly
authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of Directors,
a copy of which has been certified by the Secretary or an Assistant Secretary of
the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification and delivered to the
Unit Agent.
"Business Day" means any day that is not a Saturday, Sunday or a day on
which banking institutions in The City of New York are authorized or obligated
by law or executive order to be closed.
"Call Option" means an option entitling the Call Option Holder to acquire
the Trust Preferred Securities or Junior Subordinated Debentures underlying the
related Normal Unit on the terms and subject to the conditions set forth in the
Call Option Agreement.
"Call Option Agreement" means the Call Option Agreement, dated as of the
date hereof, between the Call Option Holder named therein and the Unit Agent, in
its capacity as Unit Agent and as attorney-in-fact for the Holders from time to
time of the Normal Units, the form of which is attached hereto as Exhibit C, as
the same may be amended from time to time in accordance with the terms hereof
and thereof.
2
<PAGE> 8
"Call Option Expiration Date" means April 1, 2002 (or, if such date is not
a Business Day, the next succeeding Business Day).
"Call Option Holder" means the Person named as the Call Option Holder in
the Call Option Agreement.
"Call Settlement Date" means the date on which the Call Options are settled
pursuant to the Call Option Agreement.
"Closing Price" has the meaning specified in Section 501.
"Collateral Agent" means Chase Manhattan Bank, as Collateral Agent under
the Pledge Agreement, until a successor Collateral Agent shall have become such
pursuant to the applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person that is then the Collateral Agent
thereunder.
"Common Stock" means the Common Stock, $.01 par value per share, of the
Company.
"Company" means the Person designated as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Contract Payment" means, with respect to each Purchase Contract, an amount
payable by the Company to the Holder of the related Unit, accruing on the Stated
Amount of such Unit from and including the date of first issuance of any Units
to but excluding the Stock Purchase Date and payable quarterly in arrears on
each Quarterly Payment Date to and including the Stock Purchase Date at a rate
per annum equal to the Contract Payment Rate (and computed on the basis of a
360-day year of twelve 30-day months), plus any additional fees accrued thereon
pursuant to Section 5.03.
"Contract Payment Rate" means .125%.
"Corporate Trust Office" means the principal office of the Unit Agent in
the Borough of Manhattan, The City of New York, at which at any particular time
its corporate trust business shall be administered, which office at the date
hereof is located at 101 Barclay Street, Floor 21 West, New York, New York
10286; Attention: Corporate Trust Administration.
3
<PAGE> 9
"Current Market Price" has the meaning specified in Section 5.06(a)(8).
"Declaration" means the Declaration of Trust, dated as of June 13, 1997 and
amended and restated as of the date hereof, executed by the Administrators, the
Sponsor and the Trustees of the Trust, as the same may be amended or
supplemented from time to time in accordance with the terms thereof.
"Deferral Rate" means 8.625% per annum and, for the period after the Call
Option Expiration Date, the Reset Rate.
"Depositary" means a clearing agency registered under the Exchange Act that
is designated to act as Depositary for Global Units as contemplated by Section
3.05.
"Early Settlement" has the meaning specified in Section 5.11(a).
"Early Settlement Amount" has the meaning specified in Section 5.11(a).
"Early Settlement Date" has the meaning specified in Section 5.1(a).
"Early Settlement Rate" has the meaning specified in Section 5.11(b).
"Exchange Act" means the Securities Exchange Act of 1934 or any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.04.
"Floor Price" has the meaning specified in Section 5.01.
"Global Unit Certificate" means a Unit Certificate that evidences all or
part of the Normal Units or a Unit Certificate that evidences all or a part of
the Stripped Units and is registered in the name of the Depositary or a nominee
thereof.
"Holder" means a Person in whose name a Unit Certificate is registered in
the Unit Register; "Holder", when used with respect to any particular Unit
Certificate (or Unit), means a Person in whose name such Unit Certificate (or
the Unit Certificate evidencing such Unit) is registered in the relevant Unit
Register.
"Indenture" means the Indenture, dated as of June 1, 1997 hereof, between
the Company and The Bank of New York, as Trustee, as the same may be amended,
modified or supplemented from time to time in accordance with the terms thereof.
4
<PAGE> 10
"Issuer Order" or "Issuer Request" means a written order or request signed
in the name of the Company by its Chairman of the Board, any Vice Chairman, its
President or a Vice President and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Unit Agent.
"Junior Subordinated Debenture Put Option" has the meaning specified for
the term "Put Option" in the Indenture.
"Junior Subordinated Debentures" means the 8.625% Junior Subordinated
Deferrable Interest Debentures of the Company due 2004 issued under the
Indenture.
"Normal Unit" means the rights to purchase Common Stock under a Purchase
Contract, together with beneficial ownership of the Trust Preferred Securities
or other Pledged Securities pledged to secure the obligations referred to in (a)
and (b) below, subject to (a) the obligations owed to the Company under such
Purchase Contract, (b) for so long as any Call Options remain exercisable, the
obligations owed to the Call Option Holder under a Call Option and (c) the
pledge arrangements securing the foregoing obligations; provided, however, that
the term "Normal Unit" will not include any Stripped Unit.
"NYSE" has the meaning specified in Section 5.01.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, any Vice Chairman, the President or any Vice President and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company and delivered to the Unit Agent.
"Opinion of Counsel" means an opinion in writing signed by legal counsel,
who may be an employee of or counsel to the Company.
"Outstanding Unit Certificates" means, as of the date of determination, all
Unit Certificates theretofore authenticated, executed and delivered pursuant to
this Agreement, but not including:
(a) Unit Certificates theretofore canceled by the Unit Agent or
delivered to the Unit Agent for cancellation; and
(b) Unit Certificates in exchange for or in lieu of which other Unit
Certificates have been authenticated, executed on behalf of the Holder and
delivered pursuant to this Agreement, other than any such Unit Certificate in
respect of which
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there shall have been presented to the Unit Agent proof satisfactory to it that
such Unit Certificate is held by a bona fide purchaser in whose hands the Units
evidenced by such Unit Certificate are valid obligations of the Company.
"Outstanding Units" means, as of the date of determination, all Units
evidenced by then Outstanding Unit Certificates, except, on or after the
Termination Date or Stock Purchase Date, Units for which the underlying Pledged
Securities or the Common Stock purchasable upon settlement of the underlying
Purchase Contracts, as the case may be, have been theretofore deposited with the
Unit Agent in trust for the Holders of such Units; provided, however, that in
determining whether the Holders of the requisite number of Units have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Units owned by the Company or any Affiliate of the Company shall be disregarded
and deemed not to be outstanding, except that, in determining whether the Unit
Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Units which a
Responsible Officer of the Unit Agent actually knows to be so owned shall be so
disregarded. Units so owned which have been pledged in good faith may be
regarded as Outstanding Units if the pledgee establishes to the satisfaction of
the Unit Agent the pledgee's right so to act with respect to such Units and that
the pledgee is not the Company or any Affiliate of the Company.
"Paid Units" has the meaning specified in Section 5.04(a).
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge" means the pledge of the Pledged Securities under the Pledge
Agreement.
"Pledge Agreement" means the Pledge Agreement, dated as of the date hereof,
among the Company, the Call Option Holder, the Collateral Agent and the Unit
Agent, in its capacity as Unit Agent and as attorney-in-fact for the Holders
from time to time of the Units, the form of which is attached hereto as Exhibit
D, as the same may be amended from time to time in accordance with the terms
hereof and thereof.
"Pledged Securities" means the securities pledged to the Collateral Agent
pursuant to the Pledge and constituting a part of the Units.
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"Predecessor Unit Certificate" of any particular Unit Certificate means
every previous Unit Certificate evidencing all or a portion of the rights and
obligations of the Holder under the Units evidenced thereby; and, for the
purposes of this definition, any Unit Certificate authenticated and delivered
under Section 3.06 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Unit Certificate shall be deemed to evidence the same rights and
obligations of the Holder as the mutilated, destroyed, lost or stolen Unit
Certificate.
"Present Value" shall have the meaning set forth in the Pledge Agreement.
"Principal Agreements" means this Agreement, the Pledge Agreement and the
Call Option Agreement.
"Purchase Contract" means a contract obligating the Company to sell and the
Holder of the related Unit to purchase Common Stock on the terms and subject to
the conditions set forth in Article Five hereof.
"Purchase Contract Settlement Fund" has the meaning specified in Section
5.05.
"Purchased Shares" has the meaning specified in Section 5.06(a)(6).
"Quarterly Payment Date" means each January 1, April 1, July 1 and
October 1, commencing October 1.
"Record Date", when used with respect to any payment date, means the 15th
day of the month immediately preceding the month including such payment date;
and provided further, that if payments are in respect of Trust Preferred
Securities or Junior Subordinated Debentures underlying Normal Units, "Record
Date", when used with respect to such payments, means the record date for such
payments determined as provided under the Declaration or the Indenture, as the
case may be.
"Reorganization Event" has the meaning specified in Section 5.06(b).
"Responsible Officer", when used with respect to the Unit Agent, means any
vice president, any assistant vice president, any assistant secretary, any
assistant treasurer, any trust officer or assistant trust officer, or any other
officer or assistant officer of the Unit Agent customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular
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corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Settlement Rate" has the meaning specified in Section 5.01.
"Stated Amount" means $41.50 per Unit.
"Stock Purchase Date" means July 1, 2002.
"Stripped Unit" means the rights to purchase Common Stock under a Purchase
Contract, together with beneficial ownership of the Treasury Securities pledged
to secure the obligations referred to in (a) below, subject to (a) the
obligations owed to the Company under such Purchase Contract and (b) the pledge
arrangements securing the foregoing obligations; provided, however, that the
term "Stripped Unit" will only include Units issued as a result of a Stripped
Unit Creation as contemplated by Section 3.09.
"Stripped Unit Creation" has the meaning specified in Section 3.09(a).
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following events at
any time on or prior to the Stock Purchase Date: (a) a decree or order of a
court having jurisdiction in the premises shall have been entered adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, rehabilitation, liquidation, receivership or other
similar relief with respect of the Company under the United States Bankruptcy
Code or any other similar applicable Federal or State law, and, unless such
decree or order shall have been entered within 60 days prior to the Stock
Purchase Date, such decree or order shall have continued undischarged and
unstayed for a period of 60 days, or (b) a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver or liquidator or
trustee or assignee in bankruptcy or insolvency of the Company or of its
property, or for the winding up or liquidation of its affairs, shall have been
entered, and, unless such decree or order shall have been entered within 60 days
prior to the Stock Purchase Date, such decree or order shall have continued
undischarged and unstayed for a period of 60 days, or (c) the Company shall
institute bankruptcy, insolvency or similar proceedings, or shall consent to the
filing of a bankruptcy, insolvency or similar proceeding against it, or shall
file a petition or answer or consent seeking reorganization, rehabilitation,
liquidation, receivership or
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other similar relief under the United States Bankruptcy Code or any other
similar applicable Federal or State law, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in Section 5.01.
"TIA" means the Trust Indenture Act of 1939 or any statute successor
thereto, in each case as amended from time to time.
"Trading Day" has the meaning specified in Section 5.01.
"Treasury Securities" means United States Treasury Securities.
"Trust" means CMS Energy Trust II, a statutory business trust created under
the laws of the State of Delaware.
"Trust Preferred Securities"(sm) means 8.625% Trust Preferred Securities of
the Trust issued under the Declaration, which term may refer to a single
security or more than one security as the context may require.
"Underwriting Agreement" means the Underwriting Agreement dated July 1,
1999 among the Company, the Trust and Salomon Smith Barney Inc., Donaldson,
Lufkin & Jenrette Securities Corporation and Banc of America Securities LLC as
the Underwriters named therein.
"Unit Agent" means the Person named as the "Unit Agent" in the first
paragraph of this Agreement until a successor Unit Agent shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter "Unit
Agent" shall mean the Person who is then the Unit Agent hereunder.
"Unit Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Normal Units or Stripped
Units, as the case may be, specified on such certificate.
"Unit Register" and "Unit Registrar" have the respective meanings specified
in Section 3.05.
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"Units" means the Normal Units and, if any are issued, the Stripped Units.
The Purchase Contracts, Call Options and/or Pledged Securities constituting a
part of any Units are sometimes referred to herein as "underlying" such Units
and are sometimes herein said to "underlie" such Units.
"Unpaid Units" has the meaning specified in Section 5.04(a).
"Vice President" means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president".
SECTION 1.2 Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Unit Agent to take any action under
any provision of this Agreement, the Company shall furnish to the Unit Agent at
the Unit Agent's request (i) an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and/or (ii) an Opinion of Counsel
stating that, in the opinion of such counsel, all such conditions precedent, if
any, have been complied with, except that in the case of any such application or
request as to which the furnishing of such documents is specifically required by
any provision of this Agreement relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Agreement shall include:
(a) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
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SECTION 1.3 Form of Documents Delivered to Unit Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Unit Agent and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for
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any purpose of this Agreement and (subject to Section 7.01) conclusive in favor
of the Unit Agent and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Unit Agent deems sufficient.
(c) The ownership of Units shall be proved by the Unit Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Unit shall bind every future Holder of
the same Unit and the Holder of every Unit Certificate evidencing such Unit
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Unit Agent or the Company in reliance thereon, whether or not notation of such
action is made upon such Unit Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Units entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Units. If any record date is set pursuant to this paragraph, the
Holders of Outstanding Units on such record date, and no other Holders, shall
be entitled to take the relevant action, whether or not such Holders remain
Holders after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite number of Outstanding Units on such record date. Nothing in
this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite number of Outstanding Units on the date
such action is taken. Promptly after any record date is set pursuant to this
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paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Unit Agent in writing and to each Holder of Units in the manner set
forth in Section 1.06.
With respect to any record date set pursuant to this Section, the Company
may designate any date as the "Expiration Date" and from time to time may change
the Expiration Date to any earlier or later day; provided that no such change
shall be effective unless notice of the proposed new Expiration Date is given to
the Unit Agent in writing, and to each Holder of Units in the manner set forth
in Section 1.06, on or prior to the existing Expiration Date. If an Expiration
Date is not designated with respect to any record date set pursuant to this
Section, the Company shall be deemed to have initially designated the 180th day
after such record date as the Expiration Date with respect thereto, subject to
its right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.
SECTION 1.5 Notices, etc. to Unit Agent and the Company.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of Holders or other document provided or permitted by this Agreement
to be made upon, given or furnished to, or filed with,
(a) the Unit Agent by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing (which may be via facsimile) and
personally delivered or mailed, first-class postage prepaid, to the Unit Agent
at 101 Barclay Street, Floor 21West, New York, New York, 10286 Attention:
Corporate Trust Administration or at any other address previously furnished in
writing by the Unit Agent to the Holders and the Company and shall be deemed
delivered when actually received by a Responsible Officer of the Unit Agent, or
(b) the Company by the Unit Agent or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Company at Fairlane Plaza South, Suite 1100,
330 Town Center Drive, Dearborn, Michigan 48126, Attention: General Counsel, or
at any other address previously furnished in writing by the Company to the Unit
Agent and the Holders.
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SECTION 1.6 Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Unit Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Unit Agent, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Unit Agent shall
constitute a sufficient notification for every purpose hereunder.
SECTION 1.7 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.8 Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 1.9 Separability Clause.
In case any provision in this Agreement or in the Units shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
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SECTION 1.10 Benefits of Agreement.
Nothing in this Agreement or in the Unit Certificates, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefits or any legal or equitable right, remedy
or claim under this Agreement. The Holders from time to time shall be
beneficiaries of this Agreement and shall be bound by all of the terms and
conditions hereof and of the Units evidenced by their Unit Certificates by
their acceptance of delivery thereof.
SECTION 1.11 Governing Law.
THIS AGREEMENT AND THE UNITS SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
SECTION 1.12 Legal Holidays.
In any case where any Quarterly Payment Date or the Stock Purchase Date
shall not be a Business Day, then (notwithstanding any other provision of this
Agreement or of the Units) payment in respect of distributions or interest on or
principal of Pledged Securities or Contract Payments shall not be made, Purchase
Contracts shall not be performed and other actions described herein shall not
occur, but such payments shall be made, the Purchase Contracts shall be
performed and such other actions shall occur, as applicable, on the next
succeeding Business Day with the same force and effect as if made on such
Quarterly Payment Date or Stock Purchase Date, as the case may be; provided,
that to the extent such payment is made on the next succeeding Business Day, no
distributions or interest shall accrue or be payable by the Company or any
Holder for the period from and after any such Quarterly Payment Date or Stock
Purchase Date, as the case may be, to the date of payment or performance; except
that if such next succeeding Business Day is in the next succeeding calendar
year, such payment shall be made, the Purchase Contracts shall be performed or
such other action shall occur on the immediately preceding Business Day with the
same force and effect as if made on such Quarterly Payment Date or the Stock
Purchase Date.
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SECTION 1.13 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which, when so executed, shall be deemed an original, but all such counterparts
shall together constitute one and the same instrument.
SECTION 1.14 Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times upon
reasonable prior written notice at the Corporate Trust Office for inspection by
any Holder.
ARTICLE II
UNIT CERTIFICATE FORMS
SECTION 2.1 Forms of Unit Certificates Generally.
Unit Certificates evidencing Normal Units shall be in substantially the
form set forth in Exhibit A hereto and Unit Certificates evidencing the Stripped
Units shall be in substantially the form of Exhibit B hereto, in each case with
such letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Units are listed
or Depositary therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Unit Certificates, as evidenced by their
execution of the Unit Certificates.
The definitive Unit Certificates shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers of the Company executing the Unit Certificates,
consistent with the provisions of this Agreement, as evidenced by their
execution thereof.
Every Global Unit Certificate authenticated, executed and delivered
hereunder shall bear a legend in substantially the following form:
THIS UNIT CERTIFICATE IS A GLOBAL UNIT CERTIFICATE WITHIN THE MEANING
OF THE MASTER UNIT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS UNIT
CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A UNIT
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS UNIT
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<PAGE> 22
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE MASTER UNIT AGREEMENT.
SECTION 2.2 Form of Unit Agent's Certificate of Authentication.
The form of the Unit Agent's certificate of authentication of the Units
shall be in substantially the form set forth on the form of the Unit
Certificates.
ARTICLE III
THE UNITS
SECTION 3.1 Title and Terms; Denominations.
The aggregate number of Units evidenced by Unit Certificates authenticated,
executed on behalf of the Holders and delivered hereunder is limited to
7,250,000 (subject to increase up to a maximum of 8,337,500 to the extent the
over-allotment option of the underwriters under the Underwriting Agreement is
exercised), except for Unit Certificates authenticated, executed and delivered
upon registration of transfer of, in exchange for, or in lieu of, other Unit
Certificates pursuant to Section 3.04, 3.05, 3.06 or 8.05.
All of the Unit Certificates authenticated, executed and delivered
hereunder shall be Normal Units except for any Unit Certificates evidencing
Stripped Units issued in connection with a Stripped Unit Creation pursuant to
Section 3.09 and Unit Certificates authenticated, executed and delivered upon
registration of transfer of, in exchange for, or in lieu of, other Unit
Certificates evidencing Stripped Units pursuant to Section 3.04, 3.05, 3.06 or
8.05.
Unit Certificates shall be issuable only in registered form and only in
denominations of a single Unit and any integral multiple thereof.
SECTION 3.2 Rights and Obligations Evidenced by the Unit Certificates.
Each Unit Certificate shall evidence the number of Units specified therein.
Prior to the purchase, if any, of shares of Common Stock under the Purchase
Contracts, the Units shall not entitle the Holders to any of the rights or
privileges of a
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holder of shares of Common Stock by virtue of holding such Units, including,
without limitation, the right to vote or receive any dividends or other
distributions or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or for the election of directors of the Company or
for any other matter.
Pursuant to the Pledge Agreement, the Holders from time to time of the
Units acting through the Unit Agent, as their attorney-in-fact, shall pledge to
the Collateral Agent (for the benefit of the Company and the Call Option Holder
as their interests may appear), and grant to the Collateral Agent, the Company
and the Call Option Holder (as their interests may appear) a security interest
in all of the right, title and interest of such Holders in and to the Pledged
Securities underlying such Units (and proceeds therefrom), as collateral
security to ensure the performance when due by such Holders of their respective
obligations under the Purchase Contracts and Call Options underlying such Units.
SECTION 3.3 Execution, Authentication, Delivery and Dating.
Subject to the provisions of Section 3.09 hereof, upon the execution and
delivery of this Agreement, and at any time and from time to time thereafter,
the Company may deliver Unit Certificates executed by the Company to the Unit
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Unit Certificates, and
the Unit Agent in accordance with such Issuer Order shall authenticate, execute
on behalf of the Holders and make such Unit Certificates available for delivery.
The Unit Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Unit Certificates may be manual or facsimile.
Unit Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Unit Certificates or
did not hold such offices at the date of such Unit Certificates.
Each Unit Certificate shall be dated the date of its authentication.
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No Purchase Contract or Call Option underlying a Unit evidenced by a Unit
Certificate shall be valid until such Unit Certificate has been executed on
behalf of the Holder by the manual signature of an authorized signatory of the
Unit Agent, as such Holder's attorney-in-fact. Such signature by an authorized
signatory of the Unit Agent shall be conclusive evidence that the Holder of such
Unit Certificate has entered into the Purchase Contracts and Call Options
underlying the Units evidenced by such Unit Certificate.
No Unit Certificate shall be entitled to any benefit under this Agreement
or be valid or obligatory for any purpose unless there appears on such Unit
Certificate a certificate of authentication substantially in the form provided
for herein executed by an authorized signatory of the Unit Agent by manual
signature, and such certificate upon any Unit Certificate shall be conclusive
evidence, and the only evidence, that such Unit Certificate has been duly
authenticated and delivered hereunder.
SECTION 3.4 Temporary Unit Certificates.
Pending the preparation of definitive Unit Certificates, the Company shall
execute and deliver (together with an Issuer Order) to the Unit Agent, and the
Unit Agent shall authenticate, execute on behalf of the Holders, and deliver, in
lieu of such definitive Unit Certificates, temporary Unit Certificates which are
in substantially the form set forth in Exhibit A or Exhibit B hereto, with such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Units are listed
or Depositary therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Unit Certificates, as evidenced by their
execution of the Unit Certificates.
If temporary Unit Certificates are issued, the Company will cause
definitive Unit Certificates to be prepared without unreasonable delay. After
the preparation of definitive Unit Certificates, the temporary Unit Certificates
shall be exchangeable for definitive Unit Certificates upon surrender of the
temporary Unit Certificates at the Corporate Trust Office, at the expense of the
Company and without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Unit Certificates, the Company shall execute and deliver
to the Unit Agent, and the Unit Agent shall authenticate, execute on behalf of
the Holder, and deliver in exchange therefor, one or more definitive Unit
Certificates of authorized denominations and evidencing a like number of Normal
Units or Stripped Units, as the case may be, as the temporary Unit Certificate
or Unit Certificates so surrendered. Until so exchanged, the temporary Unit
Certificates shall in all respects evidence the same
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benefits and the same obligations with respect to the Units evidenced thereby as
definitive Unit Certificates.
SECTION 3.5 Registration; Registration of Transfer and Exchange.
The Unit Agent shall keep at the Corporate Trust Office registers (the
registers maintained in such office being herein referred to as the "Unit
Registers") in which, subject to such reasonable regulations as it may
prescribe, the Unit Agent shall provide for the registration of Unit
Certificates evidencing the Normal Units and the Stripped Units and of transfers
of Unit Certificates evidencing the Normal Units and the Stripped Units (the
Unit Agent, in such capacity, the "Unit Registrar"). Upon request from any
Trustee or Administrator of the Trust, the Unit Agent shall furnish to such
requesting party a copy of the Unit Register for the Unit Certificates
evidencing the Normal Units as promptly as practicable.
Upon surrender for registration of transfer of any Unit Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Unit Agent,
and the Unit Agent shall authenticate, execute on behalf of the designated
transferee or transferees, and deliver, in the name of the designated transferee
or transferees, one or more new Unit Certificates evidencing a like number of
Normal Units or Stripped Units, as the case may be.
At the option of the Holder, Unit Certificates may be exchanged for other
Unit Certificates evidencing a like number of Normal Units or Stripped Units, as
the case may be, upon surrender of the Unit Certificates to be exchanged at the
Corporate Trust Office.
Whenever any Unit Certificates are so surrendered for exchange, the Company
shall execute and deliver to the Unit Agent, and the Unit Agent shall
authenticate, execute on behalf of the Holder, and deliver the Unit Certificates
which the Holder making the exchange is entitled to receive.
All Unit Certificates issued upon any registration of transfer or exchange
of a Unit Certificate shall evidence the ownership of the same number of Normal
Units or Stripped Units, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under the Principal Agreements as
the Normal Units or Stripped Units, as the case may be, evidenced by the Unit
Certificate surrendered upon such registration of transfer or exchange.
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Every Unit Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Unit Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Unit Agent duly executed, by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Unit Certificate, but the Company and the Unit Agent may require
payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Unit Certificates (which, for these purposes, includes a
Stripped Unit Creation or a transfer of Pledged Securities as contemplated by
Section 5.04(a)), other than any exchanges pursuant to Sections 3.04, 3.06 and
8.05 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Unit Agent, and the Unit Agent shall not be obligated
to authenticate, execute on behalf of the Holder and deliver any Unit
Certificate in respect of a Unit Certificate presented or surrendered for
registration of transfer or for exchange on or after the Stock Purchase Date or
the Termination Date. In lieu of delivery of a new Unit Certificate, upon
satisfaction of the applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions from such Holder,
the Unit Agent shall (a) if the Stock Purchase Date has occurred, deliver the
shares of Common Stock issuable in respect of the Purchase Contracts forming a
part of the Units evidenced by such Unit Certificate, or (b) if a Termination
Event shall have occurred on or prior to the Stock Purchase Date, transfer the
liquidation or principal amount of the Pledged Securities evidenced thereby, in
each case subject to the applicable conditions and in accordance with the
applicable provisions of Article Five hereof.
The provisions of Clauses (a), (b), (c) and (d) below shall apply only to
Global Unit Certificates:
(a) Each Global Unit Certificate authenticated and executed on behalf of
the Holders under this Agreement shall be registered in the name of the
Depositary designated for such Global Unit Certificate or a nominee thereof and
delivered to such Depositary or a nominee thereof or custodian therefor, and
each such Global Unit Certificate shall constitute a single Unit Certificate for
all purposes of this Agreement.
(b) Notwithstanding any other provision in this Agreement, no Global
Unit Certificate may be exchanged in whole or in part for Unit Certificates
registered,
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and no transfer of a Global Unit Certificate in whole or in part may be
registered, in the name of any Person other than the Depositary for such Global
Unit Certificate or a nominee thereof unless (i) such Depositary (x) has
notified the Company that it is unwilling or unable to continue as Depositary
for such Global Unit Certificate or (y) has ceased to be a clearing agency
registered under the Exchange Act or (ii) there shall have occurred and be
continuing a default by the Company in respect of its obligations under one or
more Principal Agreements.
(c) Subject to Clause (b) above, any exchange of a Global Unit
Certificate for other Unit Certificates may be made in whole or in part, and all
Unit Certificates issued in exchange for a Global Unit Certificate or any
portion thereof shall be registered in such names as the Depositary for such
Global Unit Certificate shall direct.
(d) Every Unit Certificate authenticated and delivered upon registration
of transfer of, in exchange for or in lieu of a Global Unit Certificate or any
portion thereof, whether pursuant to this Section, Section 3.04, 3.06 or 8.05 or
otherwise, shall be authenticated, executed on behalf of the Holders and
delivered in the form of, and shall be, a Global Unit Certificate, unless such
Unit Certificate is registered in the name of a Person other than the Depositary
for such Global Unit Certificate or a nominee thereof.
SECTION 3.6 Mutilated, Destroyed, Lost and Stolen Unit Certificates.
If any mutilated Unit Certificate is surrendered to the Unit Agent, the
Company shall execute and deliver to the Unit Agent, and the Unit Agent shall
authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, a new Unit Certificate, evidencing the same number of Normal Units or
Stripped Units, as the case may be, and bearing a number not contemporaneously
outstanding.
If there shall be delivered to the Company and the Unit Agent (a) evidence
to their satisfaction of the destruction, loss or theft of any Unit Certificate,
and (b) such security or indemnity as may be required by them to save each of
them and any agent of any of them harmless, then, in the absence of notice to
the Company or the Unit Agent that such Unit Certificate has been acquired by a
bona fide purchaser, the Company shall execute and deliver to the Unit Agent,
and the Unit Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen Unit
Certificate, a new Unit Certificate, evidencing the same number of Normal Units
or Stripped Units, as the case may be, and bearing a number not
contemporaneously outstanding.
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Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Unit Agent, and the Unit Agent shall not be obligated
to authenticate, execute on behalf of the Holder, and deliver to the Holder, on
or after the Stock Purchase Date or the Termination Date, a Unit Certificate in
respect of any mutilated, destroyed, lost or stolen Unit Certificate. In lieu of
delivery of a new Unit Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Unit Agent shall (a)
if the Stock Purchase Date has occurred, deliver the shares of Common Stock
issuable in respect of the Purchase Contracts forming a part of the Units
evidenced by such Unit Certificate, or (b) if a Termination Event shall have
occurred on or prior to the Stock Purchase Date, transfer the liquidation or
principal amount of the Pledged Securities evidenced thereby, in each case
subject to the applicable conditions and in accordance with the applicable
provisions of Article Five hereof.
Upon the issuance of any new Unit Certificate under this Section, the
Company and the Unit Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Unit Agent) connected therewith.
Every new Unit Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Unit Certificate shall constitute an original
additional contractual obligation of the Company and of the Holder, whether or
not the destroyed, lost or stolen Unit Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of the Principal Agreements equally and proportionately
with any and all other Unit Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
settlement of mutilated, destroyed, lost or stolen Unit Certificates.
SECTION 3.7 Persons Deemed Owners.
Prior to due presentment of a Unit Certificate for registration of
transfer, the Company and the Unit Agent, and any agent of the Company or the
Unit Agent, may treat the Person in whose name such Unit Certificate is
registered as the owner of the Units evidenced thereby, for the purpose of
receiving payments of distributions or interest on the Pledged Securities,
receiving or making payments of Contract
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Payments and performance of the underlying Purchase Contracts and Call Options
and for all other purposes whatsoever, whether or not the payment of
distributions or interest on the Pledged Securities or any Contract Payment
payable in respect of the Purchase Contracts constituting a part of the Units
evidenced thereby shall be overdue and notwithstanding any notice to the
contrary, and neither the Company nor the Unit Agent, nor any agent of the
Company or the Unit Agent, shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Unit Certificate,
nothing herein shall prevent the Company, the Unit Agent or any agent of the
Company or the Unit Agent, from giving effect to any written certification,
proxy or other authorization furnished by any Depositary (or its nominee), as a
Holder, with respect to such Global Unit Certificate or impair, as between such
Depositary and owners of beneficial interests in such Global Unit Certificate,
the operation of customary practices governing the exercise of rights of such
Depositary (or its nominee) as Holder of such Global Unit Certificate.
SECTION 3.8 Cancellation.
All Unit Certificates surrendered for delivery of shares of Common Stock on
or after the Stock Purchase Date, transfer of Pledged Securities after the
occurrence of a Termination Event or pursuant to an Early Settlement, or
registration of transfer or exchange shall, if surrendered to any Person other
than the Unit Agent, be delivered to the Unit Agent and, if not already
canceled, shall be promptly canceled by it. The Company may at any time deliver
to the Unit Agent for cancellation any Unit Certificates previously
authenticated, executed and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Unit Certificates so delivered shall,
upon Issuer Order, be promptly canceled by the Unit Agent. No Unit Certificates
shall be authenticated, executed on behalf of the Holder and delivered upon
transfer of, in exchange for or in lieu of any Unit Certificates canceled as
provided in this Section, except as expressly permitted by this Agreement. All
canceled Unit Certificates held by the Unit Agent shall be disposed by the Unit
Agent in its customary manner.
If the Company or any Affiliate of the Company shall acquire any Unit
Certificate, such acquisition shall not operate as a cancellation of such Unit
Certificate unless and until such Unit Certificate is delivered to the Unit
Agent canceled or for cancellation.
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SECTION 3.9 Substitution of Pledged Securities and Creation of Stripped
Units; Units Not Otherwise Separable.
(a) A Holder of Normal Units may obtain the release from the Pledge of
such Holder's Pledged Securities underlying such Normal Units, free and clear of
the Company's and the Call Option Holder's security interests therein, and
convert such Normal Units into Stripped Units (collectively, a "Stripped Unit
Creation") at any time after the original issuance of such Normal Units and on
or prior to the second Business Day immediately preceding the Stock Purchase
Date by:
(i) delivering to the Collateral Agent: (w) Treasury Securities
that through their scheduled payments will generate not later than the
Stock Purchase Date an amount of cash that is at least equal to the
aggregate Stated Amount of such Normal Units, (x) if the Call Options
underlying such Normal Units remain exercisable on the date on which the
requirements contained in this Section 3.09(a) for such Stripped Unit
Creation are satisfied, an instrument from the Call Option Holder releasing
its security interest in the Pledged Securities securing such Call Options
and agreeing that such Call Options no longer underlie such Normal Units
(or the Stripped Units such Normal Units then become); and
(ii) surrendering the Unit Certificate evidencing such Normal
Units, with the form of Request to Create Stripped Units thereon duly
completed and executed, to the Unit Agent, whereupon the Unit Agent shall
promptly request the Collateral Agent to release the Pledged Securities
underlying such Normal Units; provided, however, that if Treasury
Securities are the Pledged Securities under lying such Normal Units, a
Stripped Unit Creation may only be effected with respect to a number of
Normal Units that will result in the release from the Pledge of Treasury
Securities in denominations of $1,000 and integral multiples thereof.
(b) Upon receipt of the items described in subclause (w) of clause (i)
of Section 3.09(a) above and the request from the Unit Agent described in clause
(ii) of Section 3.09(a) above, the Collateral Agent will, in accordance with the
terms of the Pledge Agreement, release to the Unit Agent, on behalf of the
Holder, from the Pledge, free and clear of the Company's and the Call Option
Holders's security interests therein, the securities that theretofore had been
the Pledged Securities
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underlying such Normal Units, and upon receipt thereof the Unit Agent shall
promptly:
(i) cancel the Unit Certificate for such Normal Units;
(ii) transfer such released Pledged Securities to the Holder
or, subject to Section 3.05, the Holder's designee;
(iii) authenticate, execute on behalf of such Holder and
deliver to the Holder or, subject to Section 3.05, the Holder's
designee a Unit Certificate executed by the Company in accordance with
Section 3.03 evidencing a number of Stripped Units equal to the number
of such Normal Units.
Concurrently with the release of the securities that theretofore had been the
Pledged Securities underlying such Normal Units as contemplated by the preceding
sentence, the Treasury Securities delivered to the Collateral Agent as
contemplated by clause (i) of Section 3.09(a) above shall thereupon be
substituted for such securities as Pledged Securities underlying the Stripped
Units created from such Normal Units.
(c) Except for a Stripped Unit Creation effected in compliance with this
Section 3.09, for so long as the Purchase Contract underlying a Normal Unit
remains in effect such Normal Unit shall not be separable into its constituent
parts, and the rights and obligations of the Holder of such Normal Unit in
respect of the Pledged Securities, Purchase Contract and Call Option underlying
such Normal Unit may be acquired, and may be transferred and exchanged, only as
an integrated Normal Unit. For so long as the Purchase Contract underlying a
Stripped Unit remains in effect such Stripped Unit shall not be separable into
its constituent parts, and the rights and obligations of the Holder of such
Stripped Unit in respect of the Pledged Securities and Purchase Contract
underlying such Stripped Unit may be acquired, and may be transferred and
exchanged, only as an integrated Stripped Unit. Other than a Unit Certificate,
no Holder of a Unit, nor any transferee thereof, shall be entitled to receive a
certificate evidencing the ownership of Pledged Securities or any other rights
or obligations underlying such Unit for so long as the Purchase Contract
underlying such Unit remains in effect.
SECTION 3.10 Payments on the Units.
Contract Payments (if any) payable by the Company to the Holders, and all
amounts payable to Holders as required by 5.04(b), will be payable at the office
of
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the Unit Agent in The City of New York maintained for that purpose or, at the
option of the Company, by check mailed to the address of the Person entitled
thereto at such address as it appears on the relevant Unit Register on the
Record Date; provided, however, that for so long as any Units are evidenced by
Global Certificates, the Unit Agent will pay each such amount payable in respect
of such Units by wire transfer in same-day funds, no later than 2:00 p.m., New
York City time, on the Business Day such amount is received by the Unit Agent
from the Collateral Agent or the Company (or, if such amount is received by the
Unit Agent after 1:00 p.m., New York City time, on a Business Day or on a day
that is not a Business Day, no later than 10:00 a.m., New York City time, on the
next succeeding Business Day), to the Depositary, to the account or accounts
designated by it for such purpose.
SECTION 3.11 No Consent to Assumption.
Each Holder of a Unit, by acceptance thereof, shall be deemed expressly to
have withheld any consent to the assumption under Section 365 of the Bankruptcy
Code or otherwise, of the Purchase Contract by the Company, receiver, liquidator
or a person or entity performing similar functions, its trustee in the event
that the Company becomes the debtor under the Bankruptcy Code or subject to
other similar state or federal law providing for reorganization or liquidation.
ARTICLE IV
THE PLEDGED SECURITIES
SECTION 4.1 INTENTIONALLY LEFT BLANK.
SECTION 4.2 Transfer of Pledged Securities Upon Occurrence of
Termination Event.
Upon the occurrence of a Termination Event and the transfer of the Pledged
Securities underlying each Holder's Units to the Unit Agent pursuant to the
terms of the Pledge Agreement, the Unit Agent shall request transfer
instructions with respect to such Pledged Securities from such Holder by written
request mailed to such Holder at his address as it appears in the relevant Unit
Register. Thereafter, upon surrender to the Unit Agent of a Unit Certificate
evidencing a Holder's Units, with transfer instructions in proper form for
transfer of the underlying Pledged Securities, the Unit Agent shall transfer the
Pledged Securities evidenced by such Unit Certificate to such
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Holder in accordance with such instructions; provided, however, that if the
Pledged Securities are to be transferred to a Person other than the Person in
whose name such Unit Certificate is registered, no such transfer shall be made
unless the Person requesting the transfer has paid any transfer and other taxes
required by reason of such transfer to a Person other than the registered Holder
of such Unit Certificate or has established to the satisfaction of the Company
that such tax either has been paid or is not payable. Until the foregoing
conditions to transfer any of the Pledged Securities underlying any Units has
been met, the Unit Agent shall hold such Pledged Securities as custodian for the
Holder of such Units.
If upon a Termination Event any Holder of Units would, after satisfying the
foregoing conditions, otherwise be entitled to receive (or have transferred to
such Holder's designee) Treasury Securities of any series having a principal
amount that is not an integral multiple of $1,000, such Holder shall instead be
entitled to receive (or have transferred to such Holder's designee) Treasury
Securities of such series in a principal amount equal to the next lower integral
multiple of $1,000 plus a portion of the net proceeds from the sale of Treasury
Securities of such series contemplated by the succeeding sentence representing
such Holder's interest therein. As soon as practicable after transfer to the
Unit Agent of the Pledged Securities as provided in the Pledge Agreement, the
Unit Agent shall, on behalf of all Holders who, by virtue of the preceding
sentence, will not be entitled to a portion of the Treasury Securities of any
series to which they would otherwise be entitled, aggregate and sell the
Treasury Securities of such series representing such portion to or through one
or more U.S. government securities dealers at then prevailing prices, deduct
from the proceeds of such sales all commissions and other out-of-pocket
transaction costs incurred in connection with such sales and, until the net
proceeds therefrom have been distributed to the Holders entitled thereto or
their designees, hold such proceeds in trust for such Holders.
ARTICLE V
THE PURCHASE CONTRACTS
SECTION 5.1 Purchase of Shares of Common Stock.
Each Purchase Contract underlying a Unit shall obligate the Holder of such
Unit to purchase, and the Company to sell, on the Stock Purchase Date, unless an
Early Settlement has occurred in accordance with Section 5.11 hereof, at a price
equal to the Stated Amount, a number of newly issued shares of Common Stock
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equal to the Settlement Rate, unless, on or prior to the Stock Purchase Date,
there shall have occurred a Termination Event. The "Settlement Rate" is equal to
(a) if the Applicable Market Value (as defined below) is greater than or equal
to $53 (the "Threshold Appreciation Price"), .7830 of a share of Common Stock
per Purchase Contract, (b) if the Applicable Market Value is less than the
Threshold Appreciation Price but is greater than $34.24 (the "Floor Price"), a
fractional share of Common Stock per Purchase Contract equal to the Stated
Amount divided by the Applicable Market Value (rounded upward or downward to the
nearest 1/10,000th of a share or, if there is not a nearest 1/10,000th of a
share, to the next lower 1/10,000th of a share) and (c) if the Applicable Market
Value is less than or equal to the Floor Price, 1.2121 shares of Common Stock
per Purchase Contract, in each case subject to adjustment as provided in Section
5.06. As provided in Section 5.09, no fractional shares of Common Stock will be
issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Prices per
share of Common Stock on each of the twenty consecutive Trading Days ending on
the last Trading Day immediately preceding the Stock Purchase Date. The "Closing
Price" of the Common Stock on any date of determination means the closing sale
price (or, if no closing price is reported, the last reported sale price) of the
Common Stock on the New York Stock Exchange (the "NYSE") on such date or, if the
Common Stock is not listed for trading on the NYSE on any such date, as reported
in the composite transactions for the principal United States securities
exchange on which the Common Stock is so listed, or if the Common Stock is not
so listed on a United States national or regional securities exchange, as
reported by The NASDAQ Stock Market, or, if the Common Stock is not so reported,
the last quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or, if such
bid price is not available, the market value of the Common Stock on such date as
determined by a nationally recognized investment banking firm retained for this
purpose by the Company. A "Trading Day" means a day on which the Common Stock
(A) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of business and
(B) has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
Each Holder of a Unit Certificate evidencing Normal Units, by his
acceptance thereof, irrevocably authorizes the Unit Agent to enter into and
perform the underlying Purchase Contracts and Call Options on his behalf as his
attorney-in-fact, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase Contracts
and Call Options, consents to
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the provisions of the Principal Agreements, irrevocably authorizes the Unit
Agent to enter into and perform the Call Option Agreement and the Pledge
Agreement on his behalf as his attorney-in-fact, and consents to and agrees to
be bound by the Pledge of the Pledged Securities underlying such Normal Units
pursuant to the Pledge Agreement. Each Holder of a Unit Certificate evidencing
Stripped Units, by his acceptance thereof, irrevocably authorizes the Unit Agent
to enter into and perform the underlying Purchase Contracts on his behalf as
his attorney-in-fact, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase Contracts,
consents to the provisions of the Principal Agreements, irrevocably authorizes
the Unit Agent to perform the Pledge Agreement on his behalf as his
attorney-in-fact, and consents to and agrees to be bound by the Pledge of the
Pledged Securities underlying such Stripped Units pursuant to the Pledge
Agreement. Each Holder of Units, by his acceptance thereof, further irrevocably
covenants and agrees that, unless such Holder satisfies its obligations to the
Company under the Purchase Contracts underlying such Units as provided in
Section 5.04(a), then to the extent and in the manner provided in Section
5.04(b) and the Pledge Agreement, but subject to the terms thereof, payments in
respect of all or a portion of the principal of or proceeds from the Pledged
Securities on the Stock Purchase Date shall be paid by the Collateral Agent to
the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Upon registration of transfer of a Unit Certificate, the transferee shall
be bound (without the necessity of any other action on the part of such
transferee) by the terms of the Purchase Contracts and any Call Options
evidenced thereby and by the Pledge Agreement and the transferor shall be
released from all such obligations evidenced by the Unit Certificate so
transferred. The Company covenants and agrees, and each Holder of a Unit
Certificate, by his acceptance thereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
SECTION 5.2 Contract Payments.
Subject to Section 5.03, if any Contract Payments are or will be payable by
the Company to the Holders, the Company shall pay, prior to 1:00 p.m., New York
City time, on each Quarterly Payment Date to and including the Stock Purchase
Date, the Contract Payments payable in respect of each Purchase Contract to the
Person in whose name the Unit Certificate (or one or more Predecessor Unit
Certificates) evidencing such Purchase Contract is registered at the close of
business on the Record Date next preceding such Quarterly Payment Date. The
Company's
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obligations with respect to such Contract Payments will be subordinated and
junior in right of payment to the Company's obligations under its Senior
Indebtedness.
Each Unit Certificate delivered under this Agreement upon registration of
transfer of, in exchange for or in lieu of any other Unit Certificate shall
carry the rights to receive and obligations to pay Contract Payments accrued and
unpaid, and to accrue, which were carried by the Purchase Contracts evidenced by
such other Unit Certificate.
SECTION 5.3 Deferral of Payment Dates For Contract Payment.
So long as no default in the Company's obligations under the Principal
Agreements has occurred and is continuing, the Company shall have the right, at
any time prior to the Stock Purchase Date, to defer the payment of any or all of
the Contract Payments, if any, otherwise payable by the Company on any Quarterly
Payment Date, but only if the Company shall give the Holders and the Unit Agent
written notice of its election to defer such payment (specifying the amount to
be deferred) at least five Business Days prior to the earlier of (a) the next
succeeding Quarterly Payment Date, (b) the date the Company is required to give
notice of the Record Date or Quarterly Payment Date with respect to payment of
such Contract Payment to the NYSE or other applicable self-regulatory
organization or to Holders, or (c) the Record Date for such Quarterly Payment
Date. Any Contract Payments so deferred shall bear additional Contract Payments
thereon at a rate per annum equal to the Deferral Rate (computed on the basis of
a 360-day year of twelve 30- day months), compounding on each succeeding
Quarterly Payment Date, until paid in full. Deferred Contract Payments (and
additional Contract Payments accrued thereon) shall be due on the next
succeeding Quarterly Payment Date except to the extent that payment is deferred
pursuant to this Section. No Contract Payments may be deferred to a date that is
after the Stock Purchase Date.
In the event the Company exercises its option to defer the payment of
Contract Payments (if any) payable by it, then, until all deferred Contract
Payments (including additional Contract Payments accrued thereon) have been paid
in full, the Company shall not (a) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's capital stock, (b) make any payment of principal, interest
or premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank pari passu with or junior in right of payment to the Contract
Payments or (c) make any guarantee payments with respect to any guarantee by the
Company of any securities of any subsidiary of the Company if such guarantee
ranks pari passu or
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junior in right of payment to the Contract Payments (other than, in the case of
clauses (a), (b) and (c), (i) dividends or distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of, common stock
of the Company, (ii) any declaration of a dividend in connection with the
implementation of a stockholder's rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (iii) payments under the Company's guarantee of the Trust
Preferred Securities, (iv) as a result of a reclassification of the Company's
capital stock solely into shares of one or more classes or series of the
Company's capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company's capital
stock, (v) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the securities being converted or exchanged and (vi) purchases of
common stock in connection with the satisfaction by the Company of its
obligations under any of the Company's benefit plans for its and its
subsidiaries' directors, officers or employees or any of the company's dividend
reinvestment plans).
SECTION 5.4 Payment of Purchase Price.
(a) Unless a holder settles the underlying Purchase Contract through the
early delivery of cash to the Unit Agent in the manner described in Section
5.11, a Holder of Units shall, by no later than 10:00 a.m., New York City time,
on the Stock Purchase Date, deliver to the Unit Agent payment of the purchase
price for the shares of Common Stock to be purchased pursuant to the Purchase
Contracts underlying such Units, which payment shall be made in lawful money of
the United States by certified or cashier's check payable to the order of the
Company in immediately available funds in an amount equal to the aggregate
Stated Amount of such Holder's Units.
By 11:00 a.m., New York City time, on the Stock Purchase Date, the Unit
Agent shall (i) transfer to the Company all of the payments the Company is
entitled to receive as contemplated by the preceding sentence, (ii) notify the
Collateral Agent and the Company as to the number of Normal Units and the number
of Stripped Units, respectively, with respect to which payment has been received
as aforesaid (such Units being collectively referred to as "Paid Units") and the
number of Normal Units and the number of Stripped Units, respectively, with
respect to which payment has not been received as aforesaid (such Units being
collectively referred to as "Unpaid Units"), and (iii) request the Collateral
Agent (with notice of such request to the Company) to release the Pledged
Securities underlying the Paid Units (or, in the case of Treasury Securities,
the cash payments received thereon) from the Pledge and
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transfer such released Pledged Securities (or such cash) to the Unit Agent for
delivery to the Holders of such Units entitled thereto, free and clear of the
Company's security interest therein.
By 1:00 p.m., New York City time, on the Stock Purchase Date, the
Collateral Agent shall, as provided by the terms of the Pledge Agreement, comply
with the request referred to in clause (iii) of the preceding sentence (subject
to the Company's right under the Pledge Agreement to prevent the Collateral
Agent from doing so to the extent the aggregate amount the Company has received
as contemplated by clause (i) of the preceding sentence is less than the
aggregate amount payable with respect to the Units referred to in such request).
The Unit Agent shall thereupon, subject to its receipt from the Collateral Agent
of the Pledged Securities (or cash) referred to in such request and subject to
Section 3.05, transfer such released Pledged Securities (or cash) to the
respective Holders entitled thereto in accordance with the settlement
instructions specified in the form of Settlement Instructions appearing on the
Unit Certificates evidencing the Paid Units; provided, however, that if any such
Unit Certificate is not surrendered to the Unit Agent with the form of
Settlement Instructions thereon duly completed and executed, the Unit Agent
shall hold such Pledged Securities (or cash), and any principal payments,
distributions or interest received on such Pledged Securities, as custodian for
the Holder entitled thereto, to be delivered to such Holder (without any
interest thereon and subject to Section 3.05) upon surrender of such Unit
Certificate to the Unit Agent (with the form of Settlement Instructions thereon
duly completed and executed).
(b) With respect to each Holder's Unpaid Units, pursuant to the terms of
the Pledge Agreement,
(i) (x) if Trust Preferred Securities underlie such Unpaid
Units, the Collateral Agent, on behalf of such Holder, shall exercise such
Holder's right under the Declaration to require the Trust to distribute
Junior Subordinated Debentures having an aggregate principal amount equal
to the aggregate liquidation amount of such Trust Preferred Securities, in
exchange for such Trust Preferred Securities, and, upon receiving such
Junior Subordinated Debentures, shall thereupon, as Put Agent, exercise the
Junior Subordinated Debenture Put Option with respect thereto and (y) if
Junior Subordinated Debentures underlie such Unpaid Units, the Collateral
Agent, on behalf of such Holder, shall, as Put Agent, exercise the Junior
Subordinated Debenture Put Option with respect thereto;
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(ii) the Collateral Agent shall deliver to the Company, out of
the proceeds from the exercise of such Junior Subordinated Debenture Put
Option or, if Treasury Securities underlie such Unpaid Units, the proceeds
from the payment of such Treasury Securities at maturity, an amount equal
to the aggregate Stated Amount of such Unpaid Units plus the unpaid
Contract Payments, if any, payable by such Holder to the Company in respect
of such Unpaid Units to satisfy in full such Holder's obligations under
such Unpaid Units; and
(iii) the Collateral Agent shall remit to the Unit Agent, on
behalf of such Holder, the remainder of the proceeds, if any, from the
Pledged Securities underlying such Unpaid Units for distribution to such
Holder.
The amount referred to in clause (iii) above shall, subject to receipt
thereof by the Unit Agent from the Collateral Agent, be paid to the Person
in whose name the Unit Certificate (or one or more Predecessor Unit
Certificates) evidencing such Unpaid Units is registered at the close of
Business on the Record Date next preceding the Stock Purchase Date.
(c) Each Holder will be entitled to apply any unpaid amounts owing by
the Company to such Holder as a set-off to reduce, dollar-for-dollar, any
amounts then owing by such Holder to the Company in respect of such Holder's
Units, and such set-off amounts will be treated for all purposes as having been
paid in full by such Holder as required hereby.
(d) The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates therefor to
the Holder of the related Unit unless the Company shall have received payment in
full of the aggregate purchase price for the shares of Common Stock to be
purchased thereunder in the manner herein set forth (either directly or by
operation of set-off as contemplated by the preceding sentence).
SECTION 5.5 Issuance of Shares of Common Stock.
Unless a Termination Event or an Early Settlement shall have occurred, as
promptly as practicable on or after the Stock Purchase Date, upon receipt by the
Company of payment in full of the aggregate purchase price for the shares of
Common Stock purchased by the Holders pursuant to the foregoing provisions of
this Article, and subject to Section 5.06(b), the Company shall deposit with the
Unit
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Agent, for the benefit of the Holders of the Units, one or more certificates
representing the newly issued shares of Common Stock registered in the name of
the Unit Agent (or its nominee) as custodian for the Holders (such certificates
for shares of Common Stock, together with any dividends or distributions with
respect thereto, being hereinafter referred to as the "Purchase Contract
Settlement Fund") to which the Holders are entitled hereunder. Subject to the
foregoing, upon surrender of a Unit Certificate to the Unit Agent on or after
the Stock Purchase Date, with the form of Settlement Instructions thereon duly
completed and executed, the Holder of such Unit Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of Common Stock which such Holder is entitled to receive pursuant to the
provisions of this Article Five (after taking into account all Units then held
by such Holder), together with cash in lieu of fractional shares as provided in
Section 5.09 and any dividends or distributions declared and paid after the
Stock Purchase Date with respect to such shares constituting part of the
Purchase Contract Settlement Fund, but without any interest thereon, and the
Unit Certificate so surrendered shall forthwith be cancelled. Such shares shall
be registered in the name of the Holder or the Holder's designee as specified in
the form of Settlement Instructions appearing on the surrendered Unit
Certificate.
If any shares of Common Stock issued in respect of a Purchase Contract are
to be registered to a Person other than the Person in whose name the Unit
Certificate evidencing such Purchase Contract is registered, no such
registration shall be made unless the Person requesting such registration has
paid any transfer and other taxes required by reason of such registration in a
name other than that of the registered Holder of the Unit Certificate evidencing
such Purchase Contract or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.
SECTION 5.6 Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on any class of Common Stock of the Company in Common Stock, the
Settlement Rate in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be increased by dividing such Settlement
Rate by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other distribution,
such increase to become effective immediately after the
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opening of business on the day following the date fixed for such determination.
For the purposes of this paragraph (1), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(2) In case the Company shall issue rights, options or warrants to all
holders of its Common Stock (not being available on an equivalent basis to
Holders of the Units upon settlement of the Purchase Contracts underlying such
Units) entitling them, for a period expiring within 45 days after the record
date for the determination of stockholders entitled to receive such rights,
options or warrants, to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price per share of the Common Stock
on the date fixed for the determination of stockholders entitled to receive such
rights, options or warrants (other than pursuant to a dividend reinvestment
plan), the Settlement Rate in effect at the opening of business on the day
following the date fixed for such determination shall be increased by dividing
such Settlement Rate by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such Current Market Price
and the denominator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination plus the number
of shares of Common Stock so offered for subscription or purchase, such increase
to become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
paragraph (2), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Company shall not issue any such rights, options or
warrants in respect of shares of Common Stock held in the treasury of the
Company.
(3) In case outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Settlement Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and, conversely, in case
out standing shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock, the Settlement Rate in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be
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proportionately reduced, such increase or reduction, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants referred to in
paragraph (2) of this Section, any dividend or distribution paid exclusively in
cash and any dividend or distribution referred to in paragraph (1) of this
Section), the Settlement Rate shall be increased so that the same shall equal
the rate determined by dividing the Settlement Rate in effect immediately prior
to the close of business on the date fixed for the determination of stockholders
entitled to receive such distribution by a fraction of which the numerator shall
be the Current Market Price per share of the Common Stock on the date fixed for
such determination less the then fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution filed with the Unit Agent) of the portion of the assets or evidences
of indebtedness so distributed applicable to one share of Common Stock and the
denominator shall all be such Current Market Price per share of the Common
Stock, such adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution. In any case in which this
paragraph (4) is applicable, paragraph (2) of this Section shall not be
applicable.
(5) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed in
a Reorganization Event to which Section 5.06(b) applies or as part of a
distribution referred to in paragraph (4) of this Section) in an aggregate
amount that, when combined with (I) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash within
the 12 months preceding the date of payment of such distribution to the extent
such amount has not already been applied in a prior adjustment pursuant to this
paragraph (5) and (II) the aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution), as of the date of expiration of such
tender or exchange offer, of the consideration paid in respect of any tender or
exchange offer by the Company or any of its subsidiaries for all or any portion
of the Common Stock expiring within the 12 months preceding the date of payment
of such distribution and in respect of which no adjustment pursuant to paragraph
(6) of this Section has been made, exceeds 15% of the product of the Current
Market Price per share of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such distribution times the
number of
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shares of Common Stock outstanding on such date (such excess portion of such
distribution being herein referred to as the "Excess Amount"), the Settlement
Rate shall be increased so that the same shall equal the rate determined by
dividing the Settlement Rate in effect immediately prior to the close of
business on the date fixed for the determination of stockholders entitled to
receive such distribution by a fraction of which (i) the numerator shall be the
Current Market Price per share of the Common Stock on the date fixed for such
determination less an amount equal to (x) such Excess Amount divided by (y) the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination and (ii) the denominator shall be the Current
Market Price per share of the Common Stock on the date fixed for such
determination, such adjustment to become effective immediately prior to the
opening of business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution.
(6) In case the Company or any subsidiary of the Company shall
consummate a tender or exchange offer for all or any portion of the Common Stock
and pay an aggregate consideration in respect thereof having a fair market value
(as deter mined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) that, when combined with (I) the
aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution), as of the date of expiration of such tender or exchange offer, of
the consideration paid in respect of any other tender or exchange offer by the
Company or any of its subsidiaries for all or any portion of the Common Stock
expiring within the 12 months preceding the date of expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to this paragraph
(6) has been made and (II) the aggregate amount of any distributions to all
holders of the Company's Common Stock made exclusively in cash within 12 months
preceding the date of expiration of such tender or exchange offer to the extent
such amount has not already been applied in a prior adjustment pursuant to
paragraph (5) of this Section, exceeds 15% of the product of the Current Market
Price per share of the Common Stock on the date of expiration of such tender or
exchange offer times the number of shares of Common Stock outstanding (including
any tendered shares) at the close of business on the date of such expiration,
the Settlement Rate shall be increased so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately prior to the
close of business on the date of such expiration by a fraction of which (i) the
numerator shall be (A) the product of (I) the Current Market Price per share of
the Common Stock on the date of such expiration and (II) the number of shares of
Common Stock outstanding (including any tendered shares) at the close of
business on the date of such expiration less (B) the amount of cash plus the
fair market value (determined as aforesaid) of the
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aggregate consideration paid in respect of such tender or exchange offer and
(ii) the denominator shall be the product of (A) the Current Market Price per
share of the Common Stock on the date of such expiration and (B) the number of
shares of Common Stock outstanding (including any tendered shares) at the close
of business on the date of such expiration less the number of shares acquired
pursuant to such tender or exchange, such adjustment to become effective
immediately prior to the opening of business on the day following the date of
such expiration.
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.06(b) applies) shall be deemed to
involve (i) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of stockholders entitled
to receive such distribution" and the "date fixed for such determination" within
the meaning of paragraph (4) of this Section), and (ii) a subdivision or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of shares
of Common Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (3) of this Section).
(8) The "Current Market Price" per share of Common Stock on any day
means the average of the daily Closing Prices for the 5 consecutive Trading Days
selected by the Company commencing not more than 20 Trading Days before, and
ending not later than, the earlier of the day in question and the day before the
"ex" date with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term " 'ex' date", when used
with respect to any issuance or distribution, shall mean the first date on which
the Common Stock trades regular way on such exchange or in such market without
the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated to the
nearest 1/10,000th of a share of Common Stock (or, if there is not a nearest
1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment
in the Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
an adjustment is
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made to the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6),
(7) or (10) of this Section 5.06(a), an adjustment shall also be made to the
Applicable Market Value solely to determine which of clauses (a), (b) or (c) of
the definition of Settlement Rate in Section 501 will apply on the Stock
Purchase Date. Such adjustment shall be made by multiplying the Applicable
Market Value by a fraction of which the numerator shall be the Settlement Rate
immediately after such adjustment pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of this Section 506(a) and the denominator shall be the
Settlement Rate immediately before such adjustment.
(10) The Company may make such increases in the Settlement Rate, in
addition to those required by this Section, as it considers to be advisable in
order to avoid or diminish any income tax to any holders of shares of Common
Stock resulting from any dividend or distribution of stock or issuance of rights
or warrants to purchase or subscribe for stock or from any event treated as such
for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
If, prior to setting any of the Purchase Contracts there is (i) any
consolidation or merger of the Company with or into another Person (other than a
merger or consolidation in which the Company is the continuing corporation and
in which the Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash, securities or other property of the
Company or another corporation), (ii) any sale, transfer, lease or conveyance to
another Person of the property of the Company as an entirety or substantially as
an entirety, (iii) any statutory exchange of securities of the Company with
another Person (other than in connection with a merger or acquisition) or (iv)
any liquidation, dissolution or winding up of the Company (any such event, a
"Reorganization Event"), the Settlement Rate will be adjusted to provide that
each Holder of Units will receive on the Stock Purchase Date with respect to
each Purchase Contract forming a part thereof (or if applicable, upon the Early
Settlement Date), the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by a holder of the number of shares of
Common Stock issuable on account of each Purchase Contract if the Stock Purchase
Date had occurred immediately prior to such Reorganization Event, assuming such
holder of Common Stock is not a Person with which the Company consolidated or
into which the Company merged or which merged into the Company or to which such
sale or transfer was made, as the case may be ("constituent Person"), or an
Affiliate of a constituent Person, and failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such Reorganization Event (provided that if the kind or
amount of securities, cash and other property receivable upon such
Reorganization
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Event is not the same for each share of Common Stock held immediately prior to
such Reorganization Event by other than a constituent Person or an Affiliate
thereof and in respect of which such rights of election shall not have been
exercised ("non-electing share"), then for the purpose of this Section the kind
and amount of securities, cash and other property receivable upon such
Reorganization Event by each non-electing share shall be deemed to be the kind
and amount so receivable per share of the non-electing shares). In the event of
such a Reorganization Event, the Person formed by such consolidation, merger or
exchange or the Person which acquires the assets of the Company or, in the event
of a liquidation or dissolution of the Company, the Company or a liquidating
trust created in connection therewith, shall execute and deliver to the Unit
Agent an agreement supplemental hereto providing that the Holders of each
Outstanding Unit shall have the rights provided by this Section 5.06. Such
supplemental agreement shall provide for adjustments which, for events
subsequent to the effective date of such supplemental agreement, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section. The above provisions of this Section shall similarly apply to
successive Reorganization Events.
SECTION 5.7 Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the adjusted Settlement Rate in accordance
with Section 5.06 and prepare and transmit to the Unit Agent an Officers'
Certificate setting forth the Settlement Rate, the method of calculation
thereof in reasonable detail, and the facts requiring such adjustment and
upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an event
that permits or requires an adjustment to the Settlement Rate pursuant to
Section 5.06 (or if the Company is not aware of such occurrence, as soon as
practicable after becoming so aware), provide a written notice to the
Holders of the Units of the occurrence of such event and a statement in
reasonable detail setting forth the method by which the adjustment to the
Settlement Rate was determined and setting forth the adjusted Settlement
Rate.
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(b) The Unit Agent shall not at any time be under any duty or
responsibility to any holder of Units to determine whether any facts exist
which may require any adjustment of the Settlement Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Unit Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at the time
be issued or delivered with respect to any Purchase Contract; and the Unit Agent
makes no representation with respect thereto. The Unit Agent shall not be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock pursuant to a Purchase Contract or to comply with any of
the duties, responsibilities or covenants of the Company contained in this
Article.
SECTION 5.8 No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Stock Purchase Date.
If Unit Certificates evidencing more than one Purchase Contract shall be
surrendered for settlement at one time by the same Holder, the number of full
shares of Common Stock which shall be delivered upon settlement shall be
computed on the basis of the aggregate number of Purchase Contracts evidenced by
the Unit Certificates so surrendered. Instead of any fractional share of Common
Stock which would other wise be deliverable upon settlement of any Purchase
Contracts on the Stock Purchase Date, the Company, through the Unit Agent, shall
make a cash payment in respect of such fractional interest in an amount equal to
such fraction times the Applicable Market Value. The Company shall provide the
Unit Agent from time to time with sufficient funds to permit the Unit Agent to
make all cash payments required by this Section 5.08 in a timely manner.
SECTION 5.9 Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable to
the initial issuance and delivery of the shares of Common Stock pursuant to the
Purchase Contracts; provided, however, that the Company shall not be required to
pay any such tax or taxes which may be payable in respect of any exchange of or
substitution for a Unit Certificate evidencing a Purchase Contract or any
issuance of a share of Common Stock in a name other than that of the registered
Holder of a Unit Certificate surrendered in respect of the Purchase Contracts
evidenced thereby, other than in the name of the Unit Agent, as custodian for
such Holder, and the Company shall not be required to issue or deliver such
share certificates or Unit Certificates
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unless or until the Person or Persons requesting the transfer or issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
SECTION 5.10 Termination Event; Notice.
The Purchase Contracts and the obligations and rights of the Company and
the Holders thereunder, including, without limitation, all obligations and
rights to pay or receive any accrued or deferred Contract Payments or to settle
such Purchase Contracts pursuant to this Article Five, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Unit Agent or the Company, if, on or prior to the Stock Purchase
Date, a Termination Event shall have occurred. Upon the occurrence of a
Termination Event, the Company shall give written notice to the Unit Agent, the
Collateral Agent and the Holders, at their addresses as they appear in the Unit
Registers. Upon and after the occurrence of a Termination Event, the provisions
of this Article Five (other than this Section 5.10) shall automatically
terminate and be of no further force or effect, and the Unit Certificates shall
thereafter represent only the right to receive the Pledged Securities forming a
part of the Units theretofore evidenced thereby in accordance with the
provisions of Section 4.02 and the Pledge Agreement.
SECTION 5.11 Early Settlement.
(a) In the event of a merger or consolidation of the Company of the type
described in clause (i) of Section 5.06(b) in which the Common Stock outstanding
immediately prior to such merger or consolidation is exchanged for consideration
consisting of at least 30% cash or cash equivalents (any such event a "Cash
Merger"), then the Company (or the successor to the Company hereunder) shall be
required to offer the Holder of each Unit the right to settle the Purchase
Contract underlying such Unit prior to the Stock Purchase Date ("Early
Settlement") as provided herein. On or before the fifth Business Day after the
consummation of a Cash Merger the Company or, at the request and expense of the
Company, the Unit Agent, shall give all Holders notice, in the manner provided
in Section 1.06, of the occurrence of the Cash Merger and of the right of Early
Settlement arising as a result thereof. The Company shall also deliver a copy of
such notice to the Unit Agent, the Collateral Agent and, if the Call Options
have not been exercised and have not expired, the Call Option Holder.
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Each such notice shall contain:
(i) the date, which shall be not less than 20 nor more than 30
days after the date of such notice, on which the Early Settlement will be
effected (the "Early Settlement Date");
(ii) the date, which shall be three Business Days prior to the
Early Settlement Date, by which the Early Settlement right must be
exercised;
(iii) the Settlement Rate in effect as a result of such Cash
Merger and the kind and amount of securities, cash and other property
receivable by the Holder upon settlement of each Purchase Contract pursuant
to Section 5.06(b);
(iv) a statement to the effect that all or a portion of the
Stated Amount payable by the Holder to settle the Purchase Contract will be
offset against the amount of cash so receivable upon exercise of Early
Settlement, as applicable;
(v) the instructions a Holder must follow to exercise the Early
Settlement right; and
(vi) a statement to the effect that accrued and unpaid Contract
Payments in respect of the Purchase Contracts for which Early Settlement
shall have been effected shall be payable on the Early Settlement Date, and
that upon such payment Contract Payments on such Purchase Contracts shall
cease to accrue.
(b) To exercise an Early Settlement right, a Holder shall deliver to the
Unit Agent on or before 5:00 p.m., New York City time on the date specified in
the notice the Unit Certificate(s) with respect to which the Early Settlement
right is being exercised with the form of "Election to Settle Early" on the
reverse thereof duly completed, accompanied by payment of the purchase price for
the property to be purchased pursuant to the Purchase Contracts underlying such
Units, which payment shall be made in lawful money of the United States by
certified or cashier's check payable to the order of the Company in immediately
available funds in an amount equal to the aggregate State Amount of the Units in
respect of which the Early Settlement is being effected less the amount of cash
that otherwise would be deliver able by the Company or its successor upon
settlement of the Purchase Contract
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in lieu of Common Stock pursuant to Section 5.06(b) and as described in the
notice to Holders.
(c) In the event an Early Settlement right shall be exercised by a
Holder in accordance with the terms hereof, (i) on the Early Settlement Date the
Company shall deliver or cause to be delivered by the Unit Agent to each such
exercising Holder the net cash, securities and other property to be received, as
provided herein, by such exercising Holder in respect of the number of Purchase
Contracts for which such Early Settlement right was exercised, together with all
accrued and unpaid Contract Payments to the Early Settlement Date payable on
such Purchase Contracts, in accordance with the settlement instructions provided
by such Holder and (ii) all references herein to Stock Purchase Date shall be
deemed to refer to such Early Settlement Date and all references to form of
Settlement Instruction shall be deemed to refer to the form of Election to
Settle Early, as applicable.
(d) In the event that Early Settlement is effected with respect to less
than all of the Purchase Contracts underlying the Units evidenced by a Unit
Certificate, upon such Early Settlement the Company shall execute and the Unit
Agent shall authenticate, execute on behalf of the Holders and deliver to the
Holder thereof, at the expense of the Company, a Unit Certificate evidencing the
Units as to which Early Settlement was not effected.
ARTICLE VI
REMEDIES
SECTION 6.1 Unconditional Rights of Holders.
Notwithstanding any other provision in this Agreement, the Holder of any
Unit shall have the right, which is absolute and unconditional but which is
subject to Section 5.10, to purchase Common Stock pursuant to the Purchase
Contract underlying such Unit and to receive payment of Contract Payments, if
any, payable by the Company to such Holder with respect to such Purchase
Contract and, in each such case, to institute suit for the enforcement of any
such right, and such rights shall not be impaired without the consent of such
Holder.
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SECTION 6.2 Restoration of Rights and Remedies.
If any Holder of Units has instituted any proceeding to enforce any right
or remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such Holder
shall continue as though no such proceeding had been instituted.
SECTION 6.3 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement of mutilated,
destroyed, lost or stolen Unit Certificates in the last paragraph of Section
3.06, no right or remedy herein conferred upon or reserved to the Holders of
Units is intended to be exclusive of any other right or remedy, and every right
and remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.4 Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy shall
impair any such right or remedy or constitute a waiver of any such right. Every
right and remedy given by this Article or by law to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by such Holders.
SECTION 6.5 Undertaking for Costs.
All parties to this Agreement agree, and each Holder of any Unit by his
acceptance of the Unit Certificate evidencing such Unit shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Agreement, or in any suit against
the Unit Agent for any action taken, suffered or omitted by it as Unit Agent,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and
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good faith of the claims or defenses made by such party litigant; provided that
the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Unit Agent, to any suit instituted by any
Holder of Units, or group of Holders, holding in the aggregate more than 10% of
the number of Out standing Units, or to any suit instituted by any Holder of
Units for the enforcement of payments due in respect of Pledged Securities or
Contract Payments on Purchase Contracts underlying such Units on or after the
respective due dates therefor, or for enforcement of the right to purchase
shares of Common Stock under the Purchase Contracts constituting a part of such
Units.
SECTION 6.6 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Unit Agent or the Holders, but will suffer and
permit the execution of every such power as though no such law had been enacted.
ARTICLE VII
THE UNIT AGENT
SECTION 7.1 Certain Duties and Responsibilities.
(a) (i) The Unit Agent undertakes to perform, with respect to the
Units, such duties and only such duties as are specifically set forth in this
Agreement, and no implied covenants or obligations shall be read into this
Agreement against the Unit Agent; and
(ii) in the absence of bad faith or negligence on its part, the
Unit Agent may, with respect to the Units, conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Unit Agent and
conforming to the requirements of this Agreement, but in the case of any
certificates or opinions which by any provision hereof
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are specifically required to be furnished to the Unit Agent, the Unit Agent
shall be under a duty to examine the same to determine whether or not they
substantially conform to the requirements of this Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Unit Agent from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(i) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(ii) the Unit Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved that
the Unit Agent was negligent in ascertaining the pertinent facts; and
(iii) no provision of this Agreement shall require the Unit Agent
to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Unit Agent shall be subject to the provisions of
this Section.
SECTION 7.2 Notice of Default.
Within 90 days after the occurrence of any default by the Company
hereunder, of which a Responsible Officer of the Unit Agent has actual
knowledge, the Unit Agent shall transmit by mail to all Holders of Units, as
their names and addresses appear in the Unit Registers, notice of such default
hereunder, unless such default shall have been cured or waived.
SECTION 7.3 Certain Rights of Unit Agent.
Subject to the provisions of Section 7.01:
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(a) the Unit Agent may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
(whether in its original or facsimile form) believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officers' Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Unit Agent
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Unit Agent (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate of the Company;
(d) the Unit Agent may consult with counsel of its own selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Unit Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Unit
Agent, in its discretion, may make reasonable further inquiry or investigation
into such facts or matters related to the issuance of the Units and the
execution, delivery and performance of the Purchase Contracts as it may see
fit, and, if the Unit Agent shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and promises
of the Company, personally or by agent or attorney at the expense of the Company
and shall incur no liability or additional liability of any kind by reason of
such inquiry or investigation; and
(f) the Unit Agent may execute any of its powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Unit Agent shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
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SECTION 7.4 Not Responsible for Recitals or Issuance of Units.
The recitals contained herein and in the Unit Certificates shall be taken
as the statements of the Company and the Unit Agent assumes no responsibility
for their correctness. The Unit Agent makes no representations as to the
validity or sufficiency of this Agreement or of the Units. The Unit Agent shall
not be accountable for the use or application by the Company of the proceeds in
respect of the Trust Preferred Securities or Purchase Contracts.
SECTION 7.5 May Hold Units.
Any Unit Registrar or any other agent of the Company, or the Unit Agent, in
its individual or any other capacity, may become the owner or pledgee of Units
and may otherwise deal with the Company with the same rights it would have if it
were not Unit Registrar or such other agent, or the Unit Agent.
SECTION 7.6 Money Held in Trust.
Money held by the Unit Agent in trust hereunder need not be segregated from
other funds except to the extent required by law. The Unit Agent shall be under
no obligation to invest or pay interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 7.7 Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Unit Agent from time to time reasonable compensation
for all services rendered by it hereunder as the Company and the Unit Agent
shall from time to time agree in writing;
(b) except as otherwise expressly provided herein, to reimburse the Unit
Agent upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Unit Agent in accordance with any provision of this
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or willful misconduct; and
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(c) to fully indemnify the Unit Agent and any predecessor Unit Agent and
their agents for, and to hold each of them harmless against, any and all loss,
damage, claim, liability or expense, including taxes (other than taxes based
upon, measured by or determined by the income of the Unit Agent), incurred
without negligence or willful misconduct on its part, arising out of or in
connection with the acceptance or administration of its duties hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. This Section 7.07(c) shall survive the termination of this
Agreement.
SECTION 7.8 Corporate Unit Agent Required; Eligibility.
There shall at all times be an Unit Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by Federal or
State authority and having its Corporate Trust Office in the Borough of
Manhattan, The City of New York, if there be such a corporation in the Borough
of Manhattan, The City of New York qualified and eligible under this Article and
willing to act on reasonable terms. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Unit Agent shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 7.9 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Unit Agent and no appointment of a
successor Unit Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Unit Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Unit Agent may resign at any time by giving written notice
thereof to the Company 60 days prior to the effective date of such resignation.
If the instrument of acceptance by a successor Unit Agent required by Section
7.10 shall not have been delivered to the Unit Agent within 30 days after the
giving of such notice
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of resignation, the resigning Unit Agent may petition at the expense of the
Company any court of competent jurisdiction for the appointment of a successor
Unit Agent.
(c) The Unit Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Units delivered to the Unit Agent and the
Company.
(d) If at any time
(i) the Unit Agent fails to comply with Section 310(b) of the
TIA, as if the Unit Agent were an indenture trustee under an
indenture qualified under the TIA, after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Unit for at
least six months, or
(ii) the Unit Agent shall cease to be eligible under Section 708
and shall fail to resign after written request therefor by the Company or
by any such Holder, or
(iii) the Unit Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Unit Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Unit Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, (x)
the Company by a Board Resolution may remove the Unit Agent, or (y) any
Holder who has been a bona fide Holder of a Unit for at least six months
may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Unit Agent and the
appointment of a successor Unit Agent.
(e) If the Unit Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Unit Agent for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor Unit
Agent and shall comply with the applicable requirements of Section 7.10. If no
successor Unit Agent shall have been so appointed by the Company and accepted
appointment in the manner required by Section 7.10, any Holder who has been a
bona fide Holder of a Unit for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Unit Agent.
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(f) The Company shall give, or shall cause such successor Unit Agent to
give, notice of each resignation and each removal of the Unit Agent and each
appointment of a successor Unit Agent by mailing written notice of such event
by first-class mail, postage prepaid, to all Holders of Units as their names and
addresses appear in the Unit Registers. Each notice shall include the name of
the successor Unit Agent and the address of its Corporate Trust Office.
SECTION 7.10 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Unit Agent,
every such successor Unit Agent so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Unit Agent an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring Unit
Agent shall become effective and such successor Unit Agent, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
agencies and duties of the retiring Unit Agent; but, on the request of the
Company or the successor Unit Agent, such retiring Unit Agent shall, upon
payment of its charges due under Section 7.07 hereof, execute and deliver an
instrument transferring to such successor Unit Agent all the rights, powers and
trusts of the retiring Unit Agent and shall duly assign, transfer and deliver to
such successor Unit Agent all property and money held by such retiring Unit
Agent hereunder.
(b) Upon request of any such successor Unit Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Unit Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.
(c) No successor Unit Agent shall accept its appointment unless at the
time of such acceptance such successor Unit Agent shall be qualified and
eligible under this Article.
SECTION 7.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Unit Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Unit Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Unit Agent, shall be the successor of the Unit Agent hereunder, provided
such corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties
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hereto. In case any Unit Certificates shall have been authenticated and executed
on behalf of the Holders, but not delivered, by the Unit Agent then in office,
any successor by merger, conversion or consolidation to such Unit Agent may
adopt such authentication and execution and deliver the Unit Certificates so
authenticated and executed with the same effect as if such successor Unit Agent
had itself authenticated and executed such Units.
SECTION 7.12 Preservation of Information; Communications to Holders.
(a) The Unit Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Unit Agent in
its capacity as Unit Registrar.
(b) If three or more Holders (herein referred to as "applicants") apply
in writing to the Unit Agent, and furnish to the Unit Agent reasonable proof
that each such applicant has owned a Unit for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their
rights under this Agreement or under the Units and is accompanied by a copy of
the form of proxy or other communication which such applicants propose to
transmit, then the Unit Agent shall, within five Business Days after the receipt
of such application, afford such applicants access to the information preserved
at the time by the Unit Agent in accordance with Section 7.12(a).
(c) Every Holder of Units, by receiving and holding the Unit
Certificates evidencing the same, agrees with the Company and the Unit Agent
that none of the Company, the Unit Agent nor any agent of any of them shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders in accordance with Section 7.12(b),
regardless of the source from which such information was derived.
SECTION 7.13 No Obligations of Unit Agent.
Except to the extent otherwise provided in this Agreement, the Unit Agent
assumes no obligations and shall not be subject to any liability under this
Agreement or any Purchase Contract or Call Option in respect of the obligations
of the Holder of any Unit thereunder. The Company agrees, and each Holder of a
Unit Certificate, by his acceptance thereof, shall be deemed to have agreed,
that the Unit Agent's execution of the Unit Certificates on behalf of the
Holders shall be solely as agent and attorney-in-fact for the Holders, and that
the Unit Agent shall have no obligation to
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perform such Purchase Contracts or Call Options on behalf of the Holders, except
to the extent expressly provided in Article Five hereof.
SECTION 7.14 Tax Compliance.
(a) The Unit Agent, on its own behalf and on behalf of the Company, will
comply with all applicable certification, information reporting and withholding
(including "backup" withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any payments made
with respect to the Units or (ii) the issuance, delivery, holding, transfer,
redemption or exercise of rights under the Units. Such compliance shall include,
without limitation, the preparation and timely filing of required returns and
the timely payment of all amounts required to be withheld to the appropriate
taxing authority or its designated agent.
(b) The Unit Agent shall comply with any direction received from the
Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 7.01(a)(ii) hereof.
(c) The Unit Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or to its authorized representative within a
reasonable period of time after receipt of such request.
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.1 Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the parties to any Principal Agreement,
at any time and from time to time, may enter into one or more agreements
supplemental hereto or thereto, in form satisfactory to such parties, for any of
the following purposes:
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(1) to evidence the succession of another Person to any such party, and
the assumption by any such successor of the covenants of such party herein or
therein and under the Units; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company;
or
(3) to evidence and provide for the acceptance of appointment hereunder
by a successor Unit Agent; or
(4) to evidence the succession of another Person to the rights of the
Call Option Holder under the Call Options, in connection with a transfer of such
rights by the Call Option Holder to such Person; or
(5) to make provision with respect to the rights of Holders pursuant to
the requirements of Section 5.06(b); or
(6) to cure any ambiguity, to correct or supplement any provisions
herein or therein which may be inconsistent with any other provisions herein or
therein, or to make any other provisions with respect to such matters or
questions arising under such Principal Agreement, provided such action shall not
adversely affect the interests of the Holders.
SECTION 8.2 Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Outstanding Units (or, with respect to modifications that adversely affect only
the Holders of Normal Units or only the Holders of Stripped Units, with the
consent of the Holders of not less than a majority of the Outstanding Units that
comprise Normal Units or Stripped Units, as the case may be), by Act of said
Holders delivered to the parties to any Principal Agreement, such parties (when
authorized, in the case of the Company, by a Board Resolution) may enter into an
agreement or agreements supplemental to such Principal Agreement for the purpose
of modifying in any manner the terms of the Units, or the provisions of such
Principal Agreement or the rights of the Holders in respect of the Units;
provided, however, that no such supplemental agreement shall, without the
consent of the Holder of each Outstanding Unit affected thereby,
(1) change any payment date;
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(2) change the amount or type of Pledged Securities underlying a Unit,
impair the right of the Holder of any Unit to receive distributions or interest
payments on the underlying Pledged Securities or otherwise adversely affect the
Holder's rights in or to such Pledged Securities (including the rights of
Holders of Normal Units to effect a Stripped Unit Creation);
(3) reduce the Contract Payments, if any, or other amounts receivable by
Holders in respect of Units or change any place where, or the coin or currency
in which, any Contract Payments or other amounts payable in respect of Units are
payable;
(4) impair the right to institute suit for the enforcement of any
Purchase Contract;
(5) reduce the number of shares of Common Stock to be purchased pursuant
to any Purchase Contract, increase the price to purchase shares of Common Stock
upon settlement of any Purchase Contract, change the Stock Purchase Date or
otherwise adversely affect the Holder's rights under any Purchase Contract; or
(6) reduce the amount payable on exercise of any Call Option, extend the
Call Option Expiration Date (as defined in the Call Option Agreement) or
otherwise adversely affect any Holder's rights under any Call Option; or
(7) reduce the percentage of the Outstanding Units the consent of whose
Holders is required for any such supplemental agreement.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to consent to any supplemental
agreement to any Principal Agreement. If a record date is fixed, the Holders on
such record date, or their duly designated proxies, and only such Persons, shall
be entitled to consent to such supplemental agreement, whether or not such
Holders remain Holders after such record date; provided, that unless such
consent shall have become effective by virtue of the requisite percentage having
been obtained prior to the date which is 90 days after such record date, any
such consent previously given shall automatically and without further action by
any Holder be cancelled and of no further effect.
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SECTION 8.3 Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby
of the agencies created by the Principal Agreements, the Unit Agent shall be
entitled to receive and (subject to Section 7.01) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental agreement is authorized or permitted by this Agreement. The Unit
Agent may, but shall not be obligated to, enter into any such supplemental
agreement which affects the Unit Agent's own rights, duties or immunities under
this Agreement or otherwise.
SECTION 8.4 Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
the relevant Principal Agreement shall be modified in accordance therewith, and
such supplemental agreement shall form a part of such Principal Agreement for
all purposes; and every Holder of Unit Certificates theretofore or thereafter
authenticated, executed on behalf of the Holder and delivered hereunder shall be
bound thereby.
SECTION 8.5 Reference to Supplemental Agreements.
Unit Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Unit Agent, bear a notation in form
approved by the Unit Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Unit Certificates so modified
as to conform, in the opinion of the Unit Agent and the Company, to any such
supplemental agreement may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Unit Agent
in exchange for Outstanding Unit Certificates evidencing the same number of
Normal Units or Stripped Units, as the case may be.
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ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions.
The Company covenants that it will not merge or consolidate with any other
Person or sell or convey all or substantially all of its assets to any Person,
except that the Company may merge or consolidate with, or sell or convey all or
substantially all of its assets to, any other Person, provided that (a) the
Company shall be the continuing corporation, or the successor (if other than the
Company) shall be a corporation organized and existing under the laws of the
United States of America or a State thereof and such corporation shall assume
the obligations of the Company under the Purchase Contracts and the Pledge
Agreement by one or more supplemental agreements in form satisfactory to the
Unit Agent and, in the case of the Pledge Agreement, the Collateral Agent,
executed and delivered to the Unit Agent, and, in the case of the Pledge
Agreement, the Collateral Agent by such corporation, and (b) the Company or such
successor corporation, as the case may be, shall not, immediately after such
merger or consolidation, or such sale or conveyance, be in default in the
performance of any covenant or condition under any Principal Agreement or under
any of the Units.
SECTION 9.2 Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale or conveyance and upon any
such assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company with the same effect as if it had
been named in the Principal Agreements as the Company. Such successor
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of CMS Energy Corporation, any or all of the Unit
Certificates evidencing Units issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Unit Agent; and, upon the
order of such successor corporation, instead of the Company, and subject to all
the terms, conditions and limitations in this Agreement prescribed, the Unit
Agent shall authenticate and execute on behalf of the Holders and deliver any
Unit Certificates which previously shall have been signed and delivered by the
officers of the Company to the Unit Agent for authentication and execution, and
any Unit Certificate evidencing Units which such successor corporation
thereafter shall cause to be signed and delivered to the Unit Agent for that
purpose. All the Unit Certificates so issued shall in all respects have the same
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legal rank and benefit under this Agreement as the Unit Certificates theretofore
or thereafter issued in accordance with the terms of this Agreement as though
all of such Unit Certificates had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale or conveyance such change
in phraseology and form (but not in substance) may be made in the Unit
Certificates evidencing Units thereafter to be issued as may be appropriate.
SECTION 9.3 Opinion of Counsel to Unit Agent.
The Unit Agent, subject to Sections 7.01 and 7.03, may receive an Opinion
of Counsel as conclusive evidence that any such consolidation, merger, sale or
conveyance, and any such assumption, complies with the provisions of this
Article.
ARTICLE X
COVENANTS
SECTION 10.1 Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from time
to time of the Units that it will duly and punctually perform its obligations
under the Purchase Contracts in accordance with the terms of the Purchase
Contracts and this Agreement.
SECTION 10.2 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New York
an office or agency where Unit Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement and for transfer of
Pledged Securities upon occurrence of a Termination Event, where Unit
Certificates may be surrendered for registration of transfer or exchange or for
effecting Stripped Unit Creations, where payment of Contract Payments, if any,
payable by the Company to the Holders may be made and where notices and demands
to or upon the Company in respect of the Units and this Agreement may be served.
The Company will give prompt written notice to the Unit Agent of the location,
and any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Unit Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or
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served at the Corporate Trust Office, and the Company hereby appoints the Unit
Agent as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices
or agencies where Unit Certificates may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company will give prompt
written notice to the Unit Agent of any such designation or rescission and of
any change in the location of any such other office or agency. The Company
hereby designates as the place of payment for the Units the Corporate Trust
Office and appoints the Unit Agent at its Corporate Trust Office as paying agent
in such city.
SECTION 10.3 Company to Reserve Common Stock.
The Company shall at all times prior to the Stock Purchase Date reserve and
keep available, free from preemptive rights, out of its authorized but unissued
Common Stock the full number of shares of Common Stock issuable against tender
of payment in respect of all Purchase Contracts underlying the Units.
SECTION 10.4 Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be issued
against tender of payment in respect of the Purchase Contracts underlying the
Units will, upon issuance, be newly issued (i.e., not issued out of treasury
shares) and be duly authorized, validly issued, fully paid and nonassessable.
SECTION 10.5 Statements of Officers of the Company as to Default.
The Company will deliver to the Unit Agent, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions hereof, and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which they may
have knowledge. The Company shall deliver to the Trustee within 5 Business Days
after the Company becomes aware of the occurrence of any Event of Default or an
event which, with notice or lapse of time, would constitute an Event of Default,
an Officers' Certificate setting forth the details of, and what action the
Company proposes to take with respect to, such Event of Default.
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IN WITNESS WHEREOF, the parties hereto have caused this Master Unit
Agreement to be duly executed as of the day and year first above written.
CMS ENERGY CORPORATION
By: /s/ ALAN M. WRIGHT
------------------------------------
Name: Alan M. Wright
Title: Senior Vice President and
Chief Financial Officer
THE BANK OF NEW YORK,
as Unit Agent
By: /s/ MICHAEL CULHANE
------------------------------------
Name: Michael Culhane
Title: Vice President
62
<PAGE> 68
EXHIBIT A
FORM OF NORMAL UNIT CERTIFICATE
CMS ENERGY CORPORATION
8.75% ADJUSTABLE CONVERTIBLE TRUST SECURITY UNITS
(STATED AMOUNT $41.50 PER NORMAL UNIT)
CUSIP No.125896308
No. N-1 4,819,277 Normal Units
This Unit Certificate certifies that Cede & Co. is the registered Holder of
the number of Normal Units set forth above. Each Normal Unit represents the
right to purchase Common Stock under a Purchase Contract with CMS Energy
Corporation, a Michigan corporation (the "Company"), together with ownership of
the Trust Preferred Securities or other Pledged Securities pledged to secure the
obligations referred to in (a) and (b) below, subject to (a) the obligations
owed to the Company under such Purchase Contract, (b) for so long as any Call
Options remain exercisable, the obligations owed to the Call Option Holder under
a Call Option and (c) the pledge arrangements securing the foregoing
obligations.
Each Purchase Contract evidenced hereby is governed by a Master Unit
Agreement, dated as of July 8, 1999 (the "Master Unit Agreement"), between the
Company and The Bank of New York, as unit agent (herein called the "Unit
Agent"). All terms used herein which are defined in the Master Unit Agreement
have the meanings set forth therein. Each Call Option evidenced hereby is
governed by the Call Option Agreement. The Pledge of the Pledged Securities
evidenced hereby is governed by the Pledge Agreement. Reference is hereby made
to the Master Unit Agreement, the Call Option Agreement and the Pledge
Agreement, and any supple mental agreements thereto, for a description of the
respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Unit Agent, the Company, the Call Option Holder, the
Collateral Agent and the Holders. The summary contained herein is qualified in
its entirety by the provisions of the Principal Agreements, and the Principal
Agreements shall govern the rights of the parties to the extent that there is
any conflict between such summary and such provisions.
A-1
<PAGE> 69
Each Purchase Contract evidenced hereby obligates the Holder of this Unit
Certificate to purchase, and the Company to sell, on July 1, 2002 (the "Stock
Purchase Date"), at a price equal to $41.50 (the "Stated Amount"), a number of
newly issued shares of Common Stock, $.01 par value per share ("Common Stock"),
of the Company equal to the Settlement Rate, unless on or prior to the Stock
Purchase Date there shall have occurred a Termination Event. The "Settlement
Rate" is equal to (a) if the Applicable Market Value (as defined in the Master
Unit Agreement) is greater than or equal to $53 (the "Threshold Appreciation
Price"), .7830 of a share of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $34.24 (the "Floor Price"), a fractional share of Common Stock per
Purchase Contract equal to the Stated Amount divided by the Applicable Market
Value (rounded to the nearest 1/10,000th of a share or, if there is no nearest
1/10,000th of a share, rounded downward to the nearest 1/10,000th of a share)
and (c) if the Applicable Market Amount is less than or equal to the Floor
Price, 1.2121 shares of Common Stock per Purchase Contract, in each case subject
to adjustment as provided in the Master Unit Agreement. No fractional shares of
Common Stock will be issued upon settlement of Purchase Contracts, but instead
of issuing any fractional interest the Company shall make a cash payment as
provided in the Master Unit Agreement. The purchase price for the shares of
Common Stock to be purchased pursuant to each Purchase Contract evidenced
hereby, if not paid by 10:00 a.m., New York City time, on the Stock Purchase
Date, shall be paid by application of payments received by the Company on the
Stock Purchase Date from the Collateral Agent pursuant to the Pledge Agreement
in respect of the Pledged Securities pledged to secure such Holder's obligations
under such Purchase Contract.
The Purchase Contracts and the obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights and
obligations to receive and pay accrued or deferred Contract Payments, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Unit Agent or the Company, if, on or prior to the
Stock Purchase Date, a Termination Event shall have occurred. Upon and after
the occurrence of a Termination Event, the Collateral Agent shall release the
Pledged Securities from the Pledge. The Normal Units shall thereafter represent
the right to receive the Pledged Securities forming a part of such Normal Units
in accordance with the provisions of the Master Unit Agreement and the Pledge
Agreement.
Each Holder of a Unit, by acceptance thereof, shall be deemed expressly to
have withheld any consent to the assumption under Section 365 of the Bankruptcy
A-2
<PAGE> 70
Code or otherwise, of the Purchase Contract by the Company, receiver, liquidator
or a person or entity performing similar functions, its trustee in the event
that the Company becomes the debtor under the Bankruptcy Code or subject to
other similar state or federal law providing for reorganization or liquidation.
The Call Options evidenced hereby entitle the Call Option Holder to acquire
the Trust Preferred Securities (or Junior Subordinated Debentures substituted
therefor) evidenced hereby on or before April 1, 2002, unless prior to the
exercise thereof there shall have occurred a Termination Event. The Call Option
Holder may exercise such Call Options only in whole together with the Call
Options underlying the other Normal Units, by delivering to the Unit Agent a
notice of exercise and delivering to the Collateral Agent the Aggregate Call
Option Exercise Consideration, whereupon the Trust Preferred Securities or
Junior Subordinated Debentures underlying the Normal Units will be released
from the Pledge and the Treasury Securities constituting all or part of the
Aggregate Call Option Exercise Consideration delivered to the Collateral Agent
will be substituted as the Pledged Securities underlying the Normal Units.
The Company shall pay, on each January 1, April 1, July 1 and October 1,
commencing October 1 (each, a "Quarterly Payment Date"), in respect of each
Purchase Contract evidenced hereby, a payment (the "Contract Payment") accruing
on the Stated Amount of such Unit from and including the date of first issuance
of any Units at a rate per annum equal to 8.625% (the "Contract Payment Rate")
(computed on the basis of a 360-day year of twelve 30-day months and subject to
deferral as described in the Master Unit Agreement), plus any additional fees
accrued thereon pursuant to Section 5.03 of the Master Unit Agreement. The
Company's obligations with respect to Contract Payments shall be, to the extent
provided in the Master Unit Agreement, subordinate and subject in right of
payment to all Senior Indebtedness.
Payments due to the Holder in respect of the Normal Units evidenced hereby
will be payable to the Person in whose name this Unit Certificate (or a
Predecessor Unit Certificate) is registered at the close of business on the
Record Date next preceding the relevant payment date.
The transfer of any Unit Certificate will be registered and Unit
Certificates may be exchanged as provided in the Master Unit Agreement. The Unit
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents permitted by the Master Unit Agreement. No
service charge shall be required for any such registration of transfer or
exchange, but the Company and
A-3
<PAGE> 71
the Unit Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Except as provided in the
Master Unit Agreement in connection with a Stripped Unit Creation, for so long
as the Purchase Contract underlying a Normal Unit remains in effect, such Normal
Unit shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Normal Unit in respect of the Pledged
Securities and Purchase Contract constituting such Normal Unit may be
transferred and exchanged only as an integrated Normal Unit.
Upon registration of transfer of this Unit Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of the Purchase Contracts and Call Options evidenced
hereby and by the Pledge Agreement, and the transferor shall be released from
such obligations. The Company covenants and agrees, and the Holder, by his
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Unit Certificate, by his acceptance hereof, irrevocably
authorizes the Unit Agent to enter into and perform the related Purchase
Contracts and Call Options evidenced hereby on his behalf as his
attorney-in-fact, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase Contracts
and Call Options, consents to the provisions of the Principal Agreements,
irrevocably authorizes the Unit Agent to enter into and perform the Call Option
Agreement and the Pledge Agreement on his behalf as his attorney-in-fact, and
consents to and agrees to be bound by the Pledge of the Pledged Securities
evidenced hereby pursuant to the Pledge Agreement.
Subject to certain exceptions, the provisions of the Principal Agreements
may be amended with the consent of the Holders of at least a majority of the
Outstanding Units or, if the amendment affects only the Holders of the Normal
Units or only the Holders of the Stripped Units, at least a majority of the
Outstanding Units comprising Normal Units or Stripped Units, as the case may be.
THE PURCHASE CONTRACTS AND CALL OPTIONS SHALL FOR ALL PURPOSES BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
The Company, the Unit Agent and any agent of the Company or the Unit Agent
may treat the Person in whose name this Unit Certificate is registered as the
owner of the Normal Units evidenced hereby for the purpose of receiving payments
of
A-4
<PAGE> 72
distributions or interest on the Pledged Securities, receiving the rights and
performing the obligations under the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Unit Agent nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof, entitle
the Holder to any of the rights of a holder of shares of Common Stock.
Copies of the Principal Agreements are available for inspection at the
offices of the Unit Agent.
Unless the certificate of authentication hereon has been executed by the
Unit Agent by manual signature, this Unit Certificate shall not be entitled to
any benefit under the Principal Agreements or be valid or obligatory for any
purpose.
A-5
<PAGE> 73
IN WITNESS WHEREOF, the Company and the Holder hereby agree to their
respective obligations under the Purchase Contracts evidenced by this
instrument, and the Holder hereby acknowledges that the Pledged Securities
evidenced by this instrument are subject to the Pledge under the Pledge
Agreement.
CMS ENERGY CORPORATION
By:
------------------------------------
Attest: Name: Alan M. Wright
-------------------- Title: Senior Vice President and
Chief Financial Officer
HOLDER SPECIFIED ABOVE
By: The Bank of New York,
as Attorney-in-Fact of such Holder
By:
------------------------------------
Name:
Title:
IN WITNESS WHEREOF, the Holder hereby agrees, for the benefit of the Call
Option Holder, to its obligations under any Call Options evidenced by this
instrument, and the Holder hereby acknowledges, for the benefit of the Call
Option Holder, that the Pledged Securities evidenced by this instrument are
subject to the Pledge under the Pledge Agreement.
HOLDER SPECIFIED ABOVE
By: The Bank of New York,
as Attorney-in-Fact of such Holder
By:
------------------------------------
Dated: July 8, 1999 Name:
Title:
A-6
<PAGE> 74
Unit Agent's Certificate of Authentication
This is one of the Unit Certificates referred to in the within mentioned
Master Unit Agreement.
The Bank of New York,
as Unit Agent
By:
------------------------------------
Name:
Title:
Dated: July 8, 1999
A-7
<PAGE> 75
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Stock Purchase Date of the
Purchase Contracts underlying the number of Normal Units evidenced by this Unit
Certificate be registered in the name of, and delivered, together with a check
in payment for any fractional share, to the undersigned at the address indicated
below unless a different name and address have been indicated below. If shares
are to be registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer tax payable incident thereto.
Dated:
---------------------------------- ----------------------------------
Signature*
If shares are to be registered in the
REGISTERED HOLDER name of and
delivered to a Person other than the
Holder, please print Person's name and Please print name and address of
address: such Registered Holder:
- ---------------------------------------- ----------------------------------
Name Name
- ---------------------------------------- ----------------------------------
Address Address
- ---------------------------------------- ----------------------------------
Social Security or other Taxpayer
Identification Number, if any
----------------------------------
* Signature must be guaranteed by an eligible Guarantor Institution (banks,
stockbrokers, savings and loan associations and credit unions) with membership
in an approved signature medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15 if Common Stock is to be delivered other than to, and
in the name of, the registered Holder.
A-8
<PAGE> 76
ELECTION TO SETTLE EARLY
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Early Settlement Date of the
Purchase Contracts underlying the number of Normal Units evidenced by this Unit
Certificate be registered in the name of, and delivered to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:
---------------------------------- ----------------------------------
Signature*
If shares are to be registered in the
name of and delivered to a Person other
than the Holder, please print Person's Please print name and address of
name and address: such Registered Holder:
- ---------------------------------------- ----------------------------------
Name Name
- ---------------------------------------- ----------------------------------
Address Address
- ---------------------------------------- ----------------------------------
Social Security or other Taxpayer
Identification Number, if any
----------------------------------
* Signature must be guaranteed by an eligible Guarantor Institution (banks,
stockbrokers, savings and loan associations and credit unions) with membership
in an approved signature medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15 if Common Stock is to be delivered other than to, and
in the name of, the registered Holder.
A-9
<PAGE> 77
REQUEST TO CREATE STRIPPED UNITS
The undersigned Holder directs that (a) the Pledged Securities underlying
the number of Normal Units indicated below (which number does not exceed the
number of Normal Units evidenced by this Unit Certificate) be released from the
Pledge and registered in the name of, and delivered to, the undersigned at the
address indicated below unless a different name and address have been indicated
below and (b) a corresponding number of Stripped Units be registered in the name
of, and delivered to, the undersigned at the address indicated below unless a
different name and address have been indicated below. If the released Pledged
Securities or the Stripped Units are to be registered in the name of a Person
other than the undersigned, the under signed will pay any transfer tax payable
incident thereto.
The undersigned confirms that the requisite Treasury Securities (a list of
which, specifying the face amount at maturity, the maturity date and the Cusip
No., is annexed hereto), any required cash and the instrument from the Call
Option Holder have been delivered to the Collateral Agent.
Dated:
---------------------------------- ----------------------------------
Signature*
If shares are to be registered in the
REGISTERED HOLDER name of and
delivered to a Person other than the
Holder, please print Person's name and Please print name and address of
address: such Registered Holder:
- ---------------------------------------- ----------------------------------
Name Name
- ---------------------------------------- ----------------------------------
Address Address
- ---------------------------------------- ----------------------------------
Social Security or other Taxpayer
Identification Number, if any
----------------------------------
If Stripped Units are to be registered in the name of and delivered to a Person
other than the Holder, please print such Person's name and address: 67
* Signature must be guaranteed by an eligible Guarantor Institution (banks,
stockbrokers, savings and loan associations and credit unions) with membership
in an approved signature medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15 if Pledged Securities or Stripped Units are to be
delivered other than to, and in the name of, the registered Holder.
A-10
<PAGE> 78
EXHIBIT B
FORM OF STRIPPED UNIT CERTIFICATE
CMS ENERGY CORPORATION
8.75% ADJUSTABLE CONVERTIBLE SECURITY UNITS
(STATED AMOUNT $41.50 PER UNIT)
CUSIP No. 125896407
No. S-1 0 Stripped Units
This Unit Certificate certifies that Cede & Co. is the registered Holder of
the number of Stripped Units set forth above. Each Stripped Unit represents the
right to purchase Common Stock under a Purchase Contract with CMS Energy
Corporation, a Michigan corporation (the "Company"), together with ownership of
the Treasury Securities pledged to secure the obligations referred to in (a)
below, subject to (a) the obligations owed to the Company under such Purchase
Contract and (b) the pledge arrangements securing the foregoing obligations.
Each Purchase Contract evidenced hereby is governed by a Master Unit
Agreement, dated as of July 8, 1999 (the "Master Unit Agreement"), between the
Company and The Bank of New York, as unit agent (herein called the "Unit
Agent"). All terms used herein which are defined in the Master Unit Agreement
have the meanings set forth therein. The Pledge of the Pledged Securities
evidenced hereby is governed by the Pledge Agreement. Reference is hereby made
to the Master Unit Agreement and the Pledge Agreement, and any supplemental
agreements thereto, for a description of the respective rights, limitations of
rights, obligations, duties and immunities thereunder of the Unit Agent, the
Company, the Collateral Agent and the Holders. The summary contained herein is
qualified in its entirety by the provisions of the Principal Agreements, and the
Principal Agreements shall govern the rights of the parties to the extent that
there is any conflict between such summary and such provisions.
Each Purchase Contract evidenced hereby obligates the Holder of this Unit
Certificate to purchase, and the Company to sell, on July 1, 2002 (the "Stock
Purchase Date"), at a price equal to $41.50 (the "Stated Amount"), a number of
newly issued shares of Common Stock, $.01 par value per share ("Common Stock"),
of the Company equal to the Settlement Rate, unless on or prior to the Stock
B-1
<PAGE> 79
Purchase Date there shall have occurred a Termination Event. The "Settlement
Rate" is equal to (a) if the Applicable Market Value (as defined in the Master
Unit Agreement) is greater than or equal to $53 (the "Threshold Appreciation
Price"), .7830 of a share of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $34.24 (the "Floor Price"), a fractional share of Common Stock per
Purchase Contract equal to the Stated Amount divided by the Applicable Market
Value (rounded to the nearest 1/10,000th of a share or, if there is no nearest
1/10,000th of a share, rounded downward to the nearest 1/10,000th of a share)
and (c) if the Applicable Market Amount is less than or equal to the floor
Price, 1.2121 shares of Common Stock per Purchase Contract, in each case subject
to adjustment as provided in the Master Unit Agreement. No fractional shares of
Common Stock will be issued upon settlement of Purchase Contracts, but instead
of any fractional interest the Company shall make a cash payment as provided in
the Master Unit Agreement. The purchase price for the shares of Common Stock to
be purchased pursuant to each Purchase Contract evidenced hereby, if not paid by
10:00 a.m., New York City time, on the Stock Purchase Date, shall be paid by
application of payments received by the Company on the Stock Purchase Date from
the Collateral Agent pursuant to the Pledge Agreement in respect of the Pledged
Securities pledged to secure such Holder's obligations under such Purchase
Contract.
The Purchase Contracts and the obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights and
obligations to receive and pay accrued or deferred Contract Payments, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Unit Agent or the Company, if, on or prior to the
Stock Purchase Date, a Termination Event shall have occurred. Upon and after
the occurrence of a Termination Event, the Collateral Agent shall release the
Pledged Securities from the Pledge. The Stripped Units shall thereafter
represent the right to receive the Pledged Securities forming a part of such
Stripped Units in accordance with the provisions of the Master Unit Agreement
and the Pledge Agreement.
Each Holder of a Unit, by acceptance thereof, shall be deemed expressly to
have withheld any consent to the assumption under Section 365 of the Bankruptcy
Code or otherwise, of the Purchase Contract by the Company, receiver, liquidator
or a person or entity performing similar functions, its trustee in the event
that the Company becomes the debtor under the Bankruptcy Code or subject to
other similar state or federal law providing for reorganization or liquidation.
B-2
<PAGE> 80
The Company shall pay, on each January 1, April 1, July 1 and October 1,
commencing October 1 (each, a "Quarterly Payment Date"), in respect of each
Purchase Contract evidenced hereby, a payment (the "Contract Payment") accruing
on the Stated Amount of such Unit from and including the date of first issuance
of any Units at a rate per annum equal to 8.625% (the "Contract Payment Rate")
(computed on the basis of a 360-day year of twelve 30-day months and subject to
deferral as described in the Master Unit Agreement), plus any additional fees
accrued thereon pursuant to Section 5.03 of the Master Unit Agreement. The
Company's obligations with respect to Contract Payments shall be, to the extent
provided in the Master Unit Agreement, subordinated and subject in right of
payment to all Senior Indebtedness.
Payments due to the Holder in respect of the Stripped Units evidenced
hereby will be payable to the Person in whose name this Unit Certificate (or a
Predecessor Unit Certificate) is registered at the close of business on the
Record Date next preceding the relevant payment date.
The transfer of any Unit Certificate will be registered and Unit
Certificates may be exchanged as provided in the Master Unit Agreement. The Unit
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents permitted by the Master Unit Agreement. No
service charge shall be required for any such registration of transfer or
exchange, but the Company and the Unit Agent may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. For so long as the Purchase Contract underlying a Stripped Unit
remains in effect, such Stripped Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Stripped
Unit in respect of the Pledged Securities and Purchase Contract constituting
such Stripped Unit may be transferred and exchanged only as an integrated
Stripped Unit.
Upon registration of transfer of this Unit Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of the Purchase Contracts evidenced hereby and by the
Pledge Agreement, and the transferor shall be released from such obligations.
The Company covenants and agrees, and the Holder, by his acceptance hereof,
likewise covenants and agrees, to be bound by the provisions of this paragraph.
The Holder of this Unit Certificate, by his acceptance hereof, irrevocably
authorizes the Unit Agent to enter into and perform the related Purchase
Contracts evidenced hereby on his behalf as his attorney-in-fact, agrees to be
bound by the terms
B-3
<PAGE> 81
and provisions thereof, covenants and agrees to perform his obligations under
such Purchase Contracts, consents to the provisions of the Principal Agreements,
irrevocably authorizes the Unit Agent to enter into and perform the Pledge
Agreement on his behalf as his attorney-in-fact, and consents to and agrees to
be bound by the Pledge of the Pledged Securities evidenced hereby pursuant to
the Pledge Agreement.
Subject to certain exceptions, the provisions of the Principal Agreements
may be amended with the consent of the Holders of at least a majority of the
Outstanding Units or, if the amendment affects only the Holders of the Normal
Units or only the Holders of the Stripped Units, at least a majority of the
Outstanding Units comprising Normal Units or Stripped Units, as the case may be.
THE PURCHASE CONTRACTS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES THEREOF.
The Company, the Unit Agent and any agent of the Company or the Unit Agent
may treat the Person in whose name this Unit Certificate is registered as the
owner of the Stripped Units evidenced hereby for the purpose of receiving
payments of distributions or interest on the Pledged Securities, receiving the
rights and performing the obligations under the Purchase Contracts and for all
other purposes whatsoever, whether or not any payments in respect thereof be
overdue and notwithstanding any notice to the contrary, and neither the Company,
the Unit Agent nor any such agent shall be affected by notice to the contrary.
THE PURCHASE CONTRACTS SHALL NOT, PRIOR TO THE SETTLEMENT THEREOF, ENTITLE
THE HOLDER TO ANY OF THE RIGHTS OF A HOLDER OF SHARES OF COMMON STOCK.
Copies of the Principal Agreements are available for inspection at the
offices of the Unit Agent.
Unless the certificate of authentication hereon has been executed by the
Unit Agent by manual signature, this Unit Certificate shall not be entitled to
any benefit under the Principal Agreements or be valid or obligatory for any
purpose.
B-4
<PAGE> 82
IN WITNESS WHEREOF, the Company and the Holder hereby agree to their
respective obligations under the Purchase Contracts evidenced by this
instrument, and the Holder hereby acknowledges that the Pledged Securities
evidenced by this instrument are subject to the Pledge under the Pledge
Agreement.
CMS ENERGY CORPORATION
By:
------------------------------------
Attest: Name: Alan M. Wright
-------------------- Title: Senior Vice President and
Chief Financial Officer
HOLDER SPECIFIED ABOVE
By: The Bank of New York,
as Attorney-in-Fact of such Holder
By:
------------------------------------
Name:
Title:
Dated: July 8, 1999
B-5
<PAGE> 83
Unit Agent's Certificate of Authentication
This is one of the Unit Certificates referred to in the within mentioned
Master Unit Agreement.
The Bank of New York,
as Unit Agent
By:
------------------------------------
Name:
Title:
Dated: July 8, 1999
B-6
<PAGE> 84
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Stock Purchase Date of the
Purchase Contracts underlying the number of Stripped Units evidenced by this
Unit Certificate be registered in the name of, and delivered, together with a
check in payment for any fractional share, to the undersigned at the address
indicated below unless a different name and address have been indicated below.
If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.
Dated:
---------------------------------- ----------------------------------
Signature*
If shares are to be registered in the
REGISTERED HOLDER name of and
delivered to a Person other than the
Holder, please print Person's name and Please print name and address of
address: such Registered Holder:
- ---------------------------------------- ----------------------------------
Name Name
- ---------------------------------------- ----------------------------------
Address Address
- ---------------------------------------- ----------------------------------
Social Security or other Taxpayer
Identification Number, if any
----------------------------------
* Signature must be guaranteed by an eligible Guarantor Institution (banks,
stockbrokers, savings and loan associations and credit unions) with membership
in an approved signature medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15 if Common Stock is to be delivered other than to, and
in the name of, the registered Holder.
The Sponsor will provide a copy of the Declaration, the Indenture, the
Trust Preferred Securities Guarantee or the Common Trust Securities Guarantee
(as may be appropriate) and the Indenture (including any supplemental indenture)
to a Holder without charge on written request to the Sponsor at its principal
place of business.
B-7
<PAGE> 85
ELECTION TO SETTLE EARLY
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Early Settlement Date of the
Purchase Contracts underlying the number of Normal Units evidenced by this Unit
Certificate be registered in the name of, and delivered to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:
---------------------------------- ----------------------------------
Signature*
If shares are to be registered in the
name of and delivered to a Person other
than the Holder, please print Person's Please print name and address of
name and address: such Registered Holder:
- ---------------------------------------- ----------------------------------
Name Name
- ---------------------------------------- ----------------------------------
Address Address
- ---------------------------------------- ----------------------------------
Social Security or other Taxpayer
Identification Number, if any
----------------------------------
* Signature must be guaranteed by an eligible Guarantor Institution (banks,
stockbrokers, savings and loan associations and credit unions) with membership
in an approved signature medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15 if Common Stock is to be delivered other than to, and
in the name of, the registered Holder.
B-8
<PAGE> 86
EXHIBIT A-1
FORM OF TRUST PREFERRED SECURITIES
FORM OF FACE OF SECURITY
[IF THIS TRUST PREFERRED SECURITY ("TRUST PREFERRED SECURITY") IS A GLOBAL
SECURITY, INSERT: THIS QUARTERLY IN COME PREFERRED SECURITY IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE
OF THE CLEARING AGENCY. THIS TRUST PREFERRED SECURITY IS EXCHANGEABLE FOR TRUST
PREFERRED SECURITY REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING
AGENCY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION AND NO TRANSFER OF THIS TRUST PREFERRED SECURITY (OTHER THAN A
TRANSFER OF THIS TRUST PREFERRED SECURITY AS A WHOLE BY THE CLEARING AGENCY TO A
NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE CLEARING AGENCY TO THE
CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING AGENCY) MAY BE REGISTERED
EXCEPT IN LIMITED CIRCUMSTANCES.]
[UNLESS THIS TRUST PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK), A NEW YORK CORPORATION, TO THE TRUST OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY TRUST PREFERRED SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Certificate Number Number of Trust Preferred Securities
CUSIP NO.
AA-1
<PAGE> 87
Certificate Evidencing Trust Preferred Securities
of
CMS Energy Trust
8.625% Trust Preferred Securities (liquidation amount $1,000 per Trust Preferred
Security)
CMS Energy Trust II, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that __________ (the "Holder")
is the registered owner of _____ securities of the Trust representing preferred
undivided beneficial ownership interests in the assets of the Trust designated
the 8.625% Trust Preferred Securities (liquidation amount $1,000 per Trust
Preferred Security (the "Trust Preferred Securities"). Subject to the terms of
the Declaration (as defined below), the Trust Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Trust Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of July 8, 1999, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Trust Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
but not defined herein shall have the meaning given them in the Declaration. The
Sponsor will provide a copy of the Declaration, the Trust Preferred Securities
Guarantee and the Indenture to a Holder without charge upon written request to
the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder and to the benefits of the Trust
Preferred Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States Federal income
tax purposes, the Trust as a grantor trust, the Debentures as indebtedness and
the Trust Preferred Securities as evidence of indirect beneficial ownership in
the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this 8th day of
July, 1999.
CMS ENERGY TRUST II
By:
------------------------------------
Name:
Title: Administrator
AA-2
<PAGE> 88
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Preferred Securities referred to in the
within-mentioned Declaration.
Dated: July 8, 1999
THE BANK OF NEW YORK, not in its
individual capacity, but solely as
Property Trustee
By:
------------------------------------
Authorized Signatory
AA-3
<PAGE> 89
FORM OF REVERSE OF SECURITY
Distributions payable on each Trust Preferred Security will be fixed at a
rate per annum of 8.625% until the Call Option Expiration Date, and at the Reset
Rate thereafter (the "Coupon Rate") of the liquidation amount of $1,000 per
Trust Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarterly period will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes such cash distributions and any such
interest unless otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the Property Trustee
and to the extent the Property Trustee has funds on hand legally available
therefor.
Distributions on the Trust Preferred Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from July 8, 1999 and will be payable
quarterly in arrears, on January 1, April 1, July 1, and October 1 of each year,
commencing on October 1, 1999, except as otherwise described below.
Distributions will be computed on the basis of a 360-day year consisting of
twelve 30-day months. As long as no Event of Default has occurred and is
continuing under the Indenture, the Debenture Issuer has the right under the
Indenture to elect to defer payments of interest by extending the interest
payment period at any time and from time to time on the Debentures (each an
"Extension Period"), provided that no Extension Period shall end on a date other
than an Interest Payment Date for the Debentures or extend beyond the Maturity
Date of the Debentures. As a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, quarterly Distributions will continue
to accumulate with interest thereon (to the extent permitted by applicable law,
but not at a rate exceeding the rate of interest then accruing on the
Debentures) at the Coupon Rate compounded quarterly during any such Extension
Period. Prior to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period may not extend beyond the
Maturity Date of the Debentures. Payments of accumulated Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
Subject to the conditions set forth in the Declaration and the Indenture,
the Property Trustee may, at the direction of the Sponsor, at any time dissolve
the Trust
AA-4
<PAGE> 90
and, after satisfaction of liabilities to creditors of the Trust as required by
applicable law, cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust.
The Trust Preferred Securities will be subject to mandatory redemption on
the Maturity Date of the Debentures as provided in the Declaration.
The Trust Preferred Securities and the rights of the Holders shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
AA-5
<PAGE> 91
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
and irrevocably appoints agent to transfer this Security on the books of the
Trust.
The agent may substitute another to act for him or her.
Date:
------------------------
Signature:
----------------------------
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee(1):
-----------------------------
- ---------------------
(1) Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program (
"STAMP") or such other "signature guarantee program" as may be deter mined
by the Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities and Exchange Act of 1934, as amended.
AA-6
<PAGE> 92
NOTICE TO REQUIRE EXERCISE OF JUNIOR SUBORDINATED
DEBENTURE PUT OPTION
The undersigned holder of this Security hereby irrevocably exercises the
right to require the Trust to distribute to the Put Agent Debentures having an
aggregate principal amount equal to the Liquidation Amount of the number of
Trust Preferred Securities listed below (which number does not exceed the number
evidenced hereby) in exchange for such number of Trust Preferred Securities, on
the Put Date indicated below in connection with the concurrent exercise by the
Put Agent on behalf of the holder of this Security of the Debenture Put Option
related hereto on such date. Pursuant to the aforementioned exercise of the
right to require the Trust to distribute to the Put Agent Debentures in exchange
for such number of Trust Preferred Securities, the undersigned hereby directs
the Property Trustee to take any actions necessary to effect the exchange of
such number of Trust Preferred Securities for such principal amount of
Debentures.
Date:
------------------------
Put Date (check one)
Stock Purchase Date
- -----
Final Put Date
- -----
Number of Trust Preferred Securities (not to exceed number of Trust Preferred
Securities evidenced hereby)
Signature:
----------------------------
(Sign exactly as your name appears on the other side of this Security)
Please Print or Type Name and Address,
Including Zip Code, and Social Security
or Other Identifying Number
- ------------------
- ------------------
- ------------------
Signature Guarantee(1):
-----------------------------
- ------------------
AA-7
<PAGE> 93
(1) Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program (
"STAMP") or such other "signature guarantee program" as may be deter mined
by the Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities and Exchange Act of 1934, as amended.
AA-8
<PAGE> 1
Exhibit 4(u)
- --------------------------------------------------------------------------------
CMS ENERGY CORPORATION
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION,
as Call Option Holder
THE CHASE MANHATTAN BANK,
as Collateral Agent
AND
THE BANK OF NEW YORK,
as Unit Agent and as Attorney-In-Fact
-------------------------
PLEDGE AGREEMENT
-------------------------
Dated as of July 8, 1999
- --------------------------------------------------------------------------------
<PAGE> 2
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of July 8, 1999, among CMS Energy
Corporation, a Michigan corporation (the "Company", as such term is more fully
defined in the Master Unit Agreement referred to below), Donaldson, Lufkin &
Jenrette Securities Corporation, as Call Option Holder, The Chase Manhattan
Bank, as Collateral Agent (in such capacity and in its capacity as Put Agent,
the "Collateral Agent") and as Securities Intermediary (in such capacity, the
"Securities Intermediary"), and The Bank of New York, as Unit Agent and as
attorney-in-fact of the Holders from time to time of the Units.
RECITALS
The Company and the Unit Agent are parties to the Master Unit
Agreement, dated as of the date hereof (as the same may be supplemented or
amended from time to time in accordance with the terms thereof, the "Master Unit
Agreement"). The Master Unit Agreement contemplates that the Trust Preferred
Securities, Junior Subordinated Debentures and Treasury Securities that from
time to time form a part of the Units be pledged to the Collateral Agent to
secure the obligations of the Holders of Units under the Purchase Contracts and
Call Options that form a part of such Units.
Pursuant to the terms of the Principal Agreements and the Unit
Certificates, the Holders from time to time of the Units irrevocably authorize
the Unit Agent, as attorney-in-fact of such Holders, to execute and deliver this
Agreement on behalf of such Holders and to grant the pledge provided hereby of
the Pledged Securities that form a part of such Units and the other Collateral
(as hereinafter defined) as provided herein and subject to the terms hereof.
Accordingly, the Company, the Call Option Holder, the Collateral Agent
and the Unit Agent, in its capacity as Unit Agent and as attorney-in-fact of the
Holders from time to time of the Units, agree as follows:
SECTION 1. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) capitalized terms used herein and not defined are used herein as
defined in the Master Unit Agreement; and
<PAGE> 3
(b) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Aggregate Call Option Exercise Consideration" has the meaning
specified in the Call Option Agreement.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Treasury Regulations" means Regulations governing
Book-Entry Treasury Bonds, Notes and Bills set forth at Title 31 of the Code of
Federal Regulations (31 CFR Section 357 et seq.) and any other regulations of
the United States Treasury Department from time to time applicable to the
transfer or pledge of book-entry Treasury Securities.
"Code" shall have the meaning set forth in Section 7(a).
"Collateral" shall have the meaning set forth in Section 2.
"Collateral Account" shall have the meaning set forth in Section 3(a).
"Date of Deemed Receipt" means, with respect to any payment received by
the Collateral Agent, the date of receipt thereof; provided, however, that if
such payment is received on a date which is not a Quarterly Payment Date and is
not either a payment in respect of defaulted distributions or interest on Trust
Preferred Securities or Junior Subordinated Debentures or a payment comprising a
part of the Aggregate Call Option Exercise Consideration, "Date of Deemed
Receipt" means, with respect to such payment, the Quarterly Payment Date next
succeeding such date of receipt.
"Pledged Securities" shall have the meaning set forth in Section 2.
"Present Value" shall have the meaning set forth in Section 6(g).
SECTION 2. The Pledge. The Holders from time to time (as beneficial
owners of the Collateral) acting through the Unit Agent, as their
attorney-in-fact, and the Unit Agent (as registered owner of the Collateral)
each hereby pledge to the Collateral Agent (for the benefit of the Company and
the Call Option Holder as their
2
<PAGE> 4
interests may appear), and grant to the Collateral Agent, the Company and the
Call Option Holder (as their interests may appear) a security interest in all of
the right, title and interest of such Holders and the Unit Agent in and to (a)
the Trust Preferred Securities or Treasury Securities from time to time that
form a part of the Units (collectively, the "Pledged Securities"); (b) any
consideration received from the Call Option Holder upon exercise of such option;
(c) any Junior Subordinated Debentures distributed in respect of Trust Preferred
Securities; (d) the Collateral Account (as hereinafter defined) and all
securities, instruments, financial assets, investment property, instruments or
money from time to time credited to the Collateral Account and (e) all proceeds
of the foregoing (collectively, the "Collateral"), the Pledged Securities that
form a part of such Units (and proceeds therefrom), as collateral security to
ensure the performance when due by such Holders of their respective obligations
under the Purchase Contracts and Call Options that form a part of such Units.
Concurrently with the execution of this Agreement, the initial Holders of the
7,250,000 Normal Units issued under the Master Unit Agreement and the Unit Agent
are causing 7,250,000 Trust Preferred Securities registered in the name of the
Unit Agent together with stock transfer powers duly executed in blank to be
delivered to the Collateral Agent, and such Trust Preferred Securities will
thereupon constitute Pledged Securities forming a part of such Normal Units. As
used in this Section 2, the term "delivery" shall have the meaning ascribed to
it in the Uniform Commercial Code of the State of New York. In the event that
any or all of the additional 1,087,500 Normal Units that may be issued as a
result of an exercise of the overallotment option of the underwriters under the
Underwriting Agreement are issued pursuant to the Master Unit Agreement at or
after the execution of this Agreement, the initial Holders of such Normal Units
and the Unit Agent shall cause a number of Trust Preferred Securities equal to
the number of such Normal Units, registered in the name of the Unit Agent
together with stock transfer powers duly executed in blank to be delivered to
the Collateral Agent, and such Trust Preferred Securities will thereupon
constitute Pledged Securities forming a part of such Normal Units. The
Collateral Agent shall have the right to reregister such Trust Preferred
Securities in its name or in the name of any nominee. Subject to the Pledge, the
Holders from time to time of the Units shall have full beneficial owner ship of
the Pledged Securities that form a part of such Units, and shall be entitled
(directly or through the Collateral Agent) to all of the rights provided by such
Pledged Securities, and the Company and the Call Option Holder shall have no
rights with respect to such Pledged Securities other than their respective
security interests therein.
SECTION 3. Collateral Account.
3
<PAGE> 5
(a) The Securities Intermediary shall establish a securities account in
the name "The Bank of New York as Unit Agent, subject to the security interest
of The Chase Manhattan Bank as Collateral Agent" (the "Collateral Account"). If
at any time the Securities Intermediary shall receive any order (an "Entitlement
Order") from the Collateral Agent directing transfer or redemption of any
financial asset relating to the Collateral Agent, the Securities Intermediary
shall comply with such entitlement order without further consent by the Unit
Agent, any Holder or any other person. If the Unit Agent or any Holder is
otherwise entitled to issue Entitlement Orders and such orders conflict with any
Entitlement Order issued by the Collateral Agent, the Securities Intermediary
shall follow the orders issued by the Collateral Agent. The Securities
Intermediary hereby agrees that each item of property (including, without
limitation, any investment property, financial assets, securities, instruments,
general intangibles or cash) credited to the Collateral Account shall be treated
as a "financial asset" within the meaning of Section 8-102(a)(9) of the UCC.
(b) In the event that the Securities Intermediary has or subsequently
obtains by agreement, by operation of law or otherwise a security interest in
the Securities Account or any security entitlement credited thereto, the
Securities Intermediary hereby agrees that such security interest shall be
subordinate to the security interest of the Collateral Agent.
SECTION 4. Payments in Respect of the Pledged Securities. Any payment
received by the Collateral Agent in respect of the Pledged Securities that form
a part of any Normal Units or Stripped Units shall be paid by the Collateral
Agent, by wire transfer in same day funds no later than 1:00 p.m., New York City
time, on the Date of Deemed Receipt (or, if the Date of Deemed Receipt is not a
Business Day or if such payment is received by the Collateral Agent after noon,
New York City time, on the Date of Deemed Receipt, then such payment shall be
made by the Collateral Agent no later than 10:00 a.m., New York City time, on
the next succeeding Busi ness Day), as follows:
(a) in the case of payments not scheduled to fall on and that are not
in respect of amounts due on the Stock Purchase Date, to the Unit Agent, to the
account designated by it for payments in respect of Normal Units or the account
designated by it for payments in respect of Stripped Units, as the case may be;
and
(b) in the case of payments scheduled to fall on or that are in respect
of amounts due on the Stock Purchase Date, (i) with respect to payments received
in respect of Units which are Paid Units (as specified in the notice from the
Unit Agent referred to in Section 4), to the Unit Agent, to the account
designated by it for
4
<PAGE> 6
payments in respect of Paid Units which are Normal Units or the account
designated by it for payments in respect of Paid Units which are Stripped Units,
as the case may be; and (ii) with respect to payments received in respect of
Units which are Unpaid Units (as specified in the notice from the Unit Agent
referred to in Section 4), to the Unit Agent, to the account designated by it
for payments in respect of Unpaid Units which are Normal Units; provided,
however, that if the Company disputes the notice from the Unit Agent referred to
in Section 4 and notifies the Collateral Agent, prior to noon, New York City
time, on the Stock Purchase Date, that the number of Paid Units or the number of
Unpaid Units (or both) is different than that indicated in such notice, the
foregoing payments with respect to any Paid Units or Unpaid Units subject to
dispute shall not be paid until such dispute is resolved.
All payments received by the Unit Agent as provided herein shall be
applied by the Unit Agent pursuant to the provisions of the Master Unit
Agreement.
SECTION 5. Notice with Respect to Numbers of Paid Units and Unpaid
Units; Exercise of Junior Subordinated Debenture Put Options with Respect to
Unpaid Units. By 11:00 a.m., New York City time, on the Stock Purchase Date, the
Unit Agent shall, as provided in the Master Unit Agreement, notify the Company
and the Collateral Agent as to the number of Normal Units and the number of
Stripped Units, respectively, which are Paid Units and the number of Normal
Units and the number of Stripped Units, respectively, which are Unpaid Units.
Promptly after receiving such notification, (a) if Trust Preferred Securities
form a part of the Unpaid Units of any Holder, the Collateral Agent, on behalf
of such Holder, shall exercise such Holder's right under the Declaration to
require the Trust to distribute Junior Subordinated Debentures having an
aggregate principal amount equal to the aggregate liquidation amount of such
Trust Preferred Securities, in exchange for such Trust Preferred Securities,
and, upon receiving such Junior Subordinated Debentures, in accordance with the
Indenture and the Declaration. The Put Agent shall there upon, exercise the
Junior Subordinated Debenture Put Option with respect thereto and (b) if Junior
Subordinated Debentures form a part of such Unpaid Units, the Put Agent, in
accordance with the Indenture and the Declaration shall exercise the Junior
Subordinated Debenture Put Option with respect thereto. Upon exercise of such
Put Option, the Collateral Agent shall deliver the Debentures to the Company
against payment of the Put Price. The payment received by the Collateral Agent
from the exercise of any Junior Subordinated Debenture Put Option shall then be
applied by the Collateral Agent in accordance with Section 4(b).
SECTION 6. Release and Substitution of Pledged Securities.
5
<PAGE> 7
(a) Upon notice to the Collateral Agent by the Company or the Unit
Agent that there has occurred a Termination Event, the Collateral Agent shall
release all Pledged Securities from the Pledge and shall transfer, without
recourse, such released Pledged Securities, free and clear of any lien, pledge
or security interest created hereby, to the Unit Agent for delivery by the Unit
Agent pursuant to the provisions of the Master Unit Agreement.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and transfer of all Pledged
Securities as provided by this Section 6, the Unit Agent shall (i) use its best
efforts to obtain an opinion of a nationally recognized law firm reasonably
acceptable to the Collateral Agent to the effect that, as a result of the
Company's being the debtor in such a bankruptcy case, the Collateral Agent will
not be prohibited from releasing or transferring the Collateral as provided in
this Section 6, and shall deliver such opinion to the Collateral Agent within
ten days after the occurrence of such Termination Event, and if (y) the Unit
Agent shall be unable to obtain such opinion within ten days after the
occurrence of such Termination Event or (z) the Collateral Agent shall continue,
after delivery of such opinion, to refuse to effectuate the release and transfer
of the Pledged Securities, as provided in this Section 6, then the Unit Agent
shall within fifteen days after the occurrence of such Termination Event
commence an action or proceeding in the court with jurisdiction of the Company's
case under the Bankruptcy Code seeking an order requiring the Collateral Agent
to effectuate the release and transfer of the Pledged Securities, as provided by
this Section 6 or (ii) commence an action or proceeding like that described in
subsection (z) hereof within ten days after the occurrence of such Termination
Event.
(b) Upon notice to the Collateral Agent by the Call Option Holder that
the Call Option Holder is exercising the Call Options in accordance with the
terms of the Call Option Agreement with respect to the Trust Preferred
Securities or Junior Subordinated Debentures that form a part of the Normal
Units, provided that the Collateral Agent receives the requisite Aggregate Call
Option Exercise Consideration on the Call Settlement Date specified in such
notice, the Collateral Agent shall release such Trust Preferred Securities or
Junior Subordinated Debentures from the Pledge and transfer, without recourse,
such released Trust Preferred Securities or Junior Subordinated Debentures, free
and clear of any lien, pledge or security interest created hereby, to the Call
Option Holder or its designee as specified in such notice, whereupon (i) the
Treasury Securities constituting all or a part of the Aggregate Call Option
Exercise Consideration so received by the Collateral Agent shall be subject to
6
<PAGE> 8
the Pledge with respect to the Normal Units and (ii) the Pledge shall cease to
constitute a security interest for the benefit of the Call Option Holder.
(c) In connection with a Stripped Unit Creation, upon request by the
Unit Agent to the Collateral Agent to release the then Pledged Securities that
form a part of the number of Normal Units indicated in such request, provided
that the Collateral Agent has received (i) the Treasury Securities required by
Section 3.09(a)(i) of the Master Unit Agreement for a Stripped Unit Creation
relating to such Normal Units and (ii) if the Call Options that form a part of
such Normal Units remain exercisable on the date of receipt of such instruction,
an instrument from the Call Option Holder releasing its security interest in the
Pledged Securities that form a part of such Normal Units and agreeing that such
Call Options no longer form a part of such Normal Units (or the Stripped Units
such Normal Units then become), the Collateral Agent shall release such Pledged
Securities from the Pledge and transfer, without recourse, such released Pledged
Securities, free and clear of any lien, pledge or security interest created
hereby, to the Unit Agent for delivery by the Unit Agent pursuant to the
provisions of the Master Unit Agreement, whereupon the Treasury Securities so
received by the Collateral Agent in connection with such Stripped Unit Creation
shall be subject to the Pledge and constitute the Pledged Securities that form a
part of the Stripped Units so created.
(d) Any Treasury Securities to be delivered to the Collateral Agent
pursuant to Section 6(b) or (c) above shall be delivered by causing such
Treasury Securities to be credited to a securities account specified by the
Securities Intermediary and causing the Securities Intermediary to create a
securities entitlement with respect to such Treasury Securities in the
Collateral Account. Any cash to be delivered to the Collateral Agent pursuant to
Section 6(b) or (c) above shall be delivered by causing such cash to be wired
transferred to the Collateral Account.
(e) In the event the Trust is dissolved while any Trust Preferred
Securities are Pledged Securities that form a part of Normal Units, the Junior
Subordinated Debentures issued upon dissolution thereof shall be delivered to
the Collateral Agent in exchange for such Trust Preferred Securities, whereupon
such Trust Preferred Securities shall cease to constitute Pledged Securities and
the Junior Subordinated Debentures so received by the Collateral Agent shall be
subject to the Pledge and constitute the Pledged Securities that form a part of
such Normal Units.
(f) On the Stock Purchase Date, or upon Early Settlement, the
Collateral Agent shall release the Trust Preferred Securities or Junior
Subordinated Debentures that form a part of the Units which are Paid Units (as
specified in the notice from the
7
<PAGE> 9
Unit Agent referred to in Section 4) from the Pledge and transfer, without
recourse, such released Trust Preferred Securities or Junior Subordinated
Debentures, free and clear of any lien, pledge or security interest created
hereby, to the Unit Agent for delivery pursuant to the provisions of the Master
Unit Agreement; provided, how ever, that if the Company disputes the notice from
the Unit Agent referred to in Section 4 and notifies the Collateral Agent, prior
to noon, New York City time, on the Stock Purchase Date, that the number of Paid
Units is different from that indicated in such notice, the foregoing release
with respect to any Paid Units subject to dispute shall not be made until such
dispute is resolved.
(g) The Call Option Holder will deliver to a Holder wishing to create a
Stripped Unit the instrument referred to in Section 5 (c) (ii) upon the receipt
of cash from such Holder in an amount equal to the Present Value of each Call
Option, at such time, relating to such Trust Preferred Security that the Holder
wishes to have released.
"PRESENT VALUE" means, with respect to each Call Option
relating to the Trust Preferred Securities which the Holder of Normal Units
seeks to replace with Treasury Securities, the present value of 0.60% of the
Stated Amount on the Substitution Date of such Call Option, which shall be
computed using a discount rate equal to the Treasury Rate. For purposes of this
definition, the Present Value of the Call Option will be determined in good
faith by the Call Option Holder in accordance with generally accepted principles
of financial analysis.
"TREASURY RATE" means the bond equivalent yield on United
States Treasury notes or bills having a term interest nearest in length to the
length of the period from the Substitution Date to the Call Option Expiration
Date.
"SUBSTITUTION DATE" means the date on which a Holder of Normal
Units exercises its right to substitute Treasury Securities for Pledged
Securities.
SECTION 7. Rights and Remedies.
(a) The Collateral Agent shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform Commercial Code
as in effect in the State of New York (the "Code") (whether or not said Code is
in effect in the jurisdiction where the rights and remedies are asserted) and,
with respect to Collateral which are Treasury Securities, the Applicable
Treasury Regulations, and such additional rights and remedies to which a secured
party is entitled under the laws in effect in any jurisdiction where any rights
and remedies hereunder may be asserted.
8
<PAGE> 10
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments due to the Company pursuant to the Purchase Contracts that form
a part of any Units, the Collateral Agent shall have and may exercise, with
reference to the Pledged Securities that form a part of such Units and the
obligations of the Holders of such Units, any and all of the rights and remedies
available to a secured party under the Code and the Applicable Treasury
Regulations after default by a debtor, and as otherwise granted herein or under
any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of principal of or distributions
or interest on the Pledged Securities, in each case subject to the provisions
hereof.
(d) The Unit Agent, the Call Option Holder and each Holder of Units
agree that, from time to time, upon the written request of the Collateral Agent,
the Unit Agent, the Call Option Holder or such Holder of Units shall execute and
deliver such further documents and do such other acts and things as the
Collateral Agent may reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the Collateral
Agent hereunder.
SECTION 8. The Collateral Agent and the Securities Intermediary. The
Collateral Agent, the Company and the Call Option Holder hereby agree among
themselves as follows (it being understood and agreed that, except as provided
in Section 8.08, neither the Unit Agent nor any Holder of Units shall have any
rights or duties under this Section 8):
8.1 Appointment, Powers and Immunities. The Collateral Agent shall act
hereunder as agent for the Company and the Call Option Holder, with such powers
as are specifically vested in the Collateral Agent by the terms of this
Agreement, together with such other powers as are reasonably incidental thereto.
The Collateral Agent and the Securities Intermediary: (a) shall have no duties
or responsibilities except those expressly set forth in this Agreement and no
implied covenants or obligations shall be inferred from this Agreement against
the Collateral Agent or the Securities Intermediary, nor shall the Collateral
Agent or the Securities Intermediary be bound by the provisions of any agreement
by any party hereto beyond the specific terms hereof; (b) shall not be
responsible to the Company or the Call Option Holder for any recitals contained
in this Agreement, or in any certificate or other document referred to or
provided for in, or received by it under, this Agreement, the Units, the
9
<PAGE> 11
Master Unit Agreement, or the Call Option Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
(other than as against the Collateral Agent or the Securities Intermediary, as
the case may be), the Units, the Master Unit Agreement or the Call Option
Agreement or any other document referred to or provided for herein or therein or
for any failure by the Company, the Call Option Holder, or any other Person
(except the Collateral Agent or the Securities Intermediary, as the case may be)
to perform any of its obligations hereunder or thereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder (except pursuant to directions furnished under Section 8.2 hereof);
(d) shall not be responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to or provided for
herein or in connection herewith or therewith, except for its own negligence;
and (e) shall not be required to advise any party as to selling or retaining, or
taking or refraining from taking any action with respect to, any Units or any
property deposited hereunder. Subject to the foregoing, during the term of this
Agreement the Collateral Agent shall take all reasonable action in connection
with the safekeeping and preservation of the Pledged Securities hereunder.
No provision of this Agreement shall require the Collateral Agent or the
Securities Intermediary to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder. In no
event shall the Collateral Agent or the Securities Intermediary be liable for
any amount in excess of the value of the Pledged Securities.
8.2 Instructions of the Company. The Company (or, with respect to
matters relating to the Call Options, the Call Option Holder) shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for any right or remedy available to the Collateral Agent, or of
exercising any power conferred on the Collateral Agent, or to direct the taking
or refraining from taking of any action authorized by this Agreement; provided,
however, that (a) no Company direction shall in any way adversely affect the
rights of the Call Option Holder hereunder or under the Call Options and no Call
Option Holder direction shall in any way adversely affect the rights of the
Company hereunder or under the Purchase Contracts, (b) such direction shall not
conflict with the provisions of any law or of this Agreement and (c) the
Collateral Agent shall be adequately indemnified as provided herein. Nothing in
this Section 8.2 shall impair the right of the Collateral Agent in its
discretion to take any action or omit to take any action which it deems proper
and which is not inconsistent with such direction.
10
<PAGE> 12
8.3 Reliance by Collateral Agent and Securities Intermediary. The
Collateral Agent and Securities Intermediary shall be entitled to rely upon any
certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex,
telegram or cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons (without being
required to determine the correctness of any fact stated therein), and upon
advice and statements of legal counsel and other experts selected by the
Collateral Agent or the Securities Intermediary, as the case may be. As to any
matters not expressly provided for by this Agreement, the Collateral Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions given by the Company or the Call
Option Holder, as the case may be, in accordance with this Agreement.
8.4 Rights in Other Capacities. Each of the Collateral Agent and the
Securities Intermediary and its affiliates may (without having to account
therefor to the Company or the Call Option Holder) accept deposits from, lend
money to, make investments in and generally engage in any kind of banking, trust
or other business with the Unit Agent and any Holder of Units as if it were not
acting as the Collateral Agent or the Securities Intermediary, as the case may
be, and the Collateral Agent and the Securities Intermediary and its affiliates
may accept fees and other consideration from the Unit Agent and any Holder of
Units without having to account for the same to the Company or the Call Option
Holder, provided that the Collateral Agent covenants and agrees with the Company
and the Call Option Holder that the Collateral Agent shall not accept, receive
or permit there to be created in its favor any security interest, lien or other
encumbrance of any kind in or upon the Pledged Securities.
8.5 Non-Reliance on Collateral Agent. Neither the Collateral Agent nor
the Securities Intermediary shall be required to keep itself informed as to the
performance or observance by the Unit Agent or any Holder of Units of this
Agreement, the Master Unit Agreement, the Call Option Agreement, the Units or
any other document referred to or provided for herein or therein or to inspect
the properties or books of the Unit Agent or any Holder of Units. Neither the
Collateral Agent nor the Securities Intermediary shall have any duty or
responsibility to provide the Company or the Call Option Holder with any credit
or other information concerning the affairs, financial condition or business of
the Unit Agent or any Holder of Units that may come into the possession of the
Collateral Agent or any of its affiliates.
11
<PAGE> 13
8.6 Compensation and Indemnity. The Company agrees: (a) to pay the
Collateral Agent and the Securities Intermediary from time to time reasonable
compensation for all services rendered by it hereunder and (b) to indemnify the
Collateral Agent and the Securities Intermediary for, and to hold each of them
harmless against, any loss, liability or expense including taxes (other than
taxes based upon, measured by or determined by the income of the Collateral
Agent or the Securities Intermediary) incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of its powers and duties under this Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of such powers and duties.
8.7 Failure to Act. In the event of any ambiguity in the provisions of
this Agreement or any dispute between or conflicting claims by or among the
under signed and/or any other Person with respect to any funds or property
deposited hereunder, each of the Collateral Agent and the Securities
Intermediary shall be entitled, at its sole option, to refuse to comply with any
and all claims, demands or instructions with respect to such property or funds
so long as such dispute or conflict shall continue, and neither the Collateral
Agent nor the Securities Intermediary shall be or become liable in any way to
any of the undersigned for its failure or refusal to comply with such
conflicting claims, demands or instructions. Each of the Collateral Agent and
the Securities Intermediary shall be entitled to refuse to act until either (a)
such conflicting or adverse claims or demands shall have been finally determined
by a court of competent jurisdiction or settled by agreement between the
conflicting parties as evidenced in a writing satisfactory to the Collateral
Agent or the Securities Intermediary, as the case may be, or (b) the Collateral
Agent or the Securities Intermediary, as the case may be, shall have received
security or an indemnity satisfactory to the Collateral Agent or the Securities
Intermediary, as the case may be, sufficient to save the Collateral Agent or the
Securities Intermediary, as the case may be, harmless from and against any and
all loss, liability or expense which the Collateral Agent or the Securities
Intermediary, as the case may be, may incur by reason of its acting. The
Collateral Agent or the Securities Intermediary, as the case may be, may in
addition elect to commence an interpleader action or seek other judicial relief
or orders as the Collateral Agent or the Securities Intermediary, as the case
may be, may deem necessary. Notwithstanding anything contained herein to the
contrary, neither the Collateral Agent nor the Securities Intermediary shall be
required to take any action that is in its opinion contrary to law or to the
terms of this Agreement, or which would in its opinion subject it or any of its
officers, employees or directors to liability.
12
<PAGE> 14
8.8 Resignation of Collateral Agent. Subject to the appointment and
acceptance of a successor Collateral Agent as provided below, (a) the Collateral
Agent may resign at any time by giving notice thereof to the Company, the Unit
Agent and, if the Call Options are exercisable or have been exercised but not
settled, the Call Option Holder, (b) the Collateral Agent may be removed at any
time by the Company (provided, that, if the Call Options are exercisable or have
been exercised but not settled, the Call Option Holder shall have consented to
such removal), and (c) if the Collateral Agent fails to perform any of its
material obligations hereunder in any material respect for a period of not less
than 20 days after receiving notice of such failure and such failure shall be
continuing, the Collateral Agent may be removed by the Unit Agent. The Unit
Agent shall promptly notify the Company and, if the Call Options are exercisable
or have been exercised but not settled, the Call Option Holder of any removal of
the Collateral Agent pursuant to clause (c) of the immediately preceding
sentence. Upon any such resignation or removal, the Company and, if the Call
Options are exercisable or have been exercised but not settled, the Call Option
Holder shall have the right to appoint a successor Collateral Agent. If no
successor Collateral Agent shall have been so appointed and shall have accepted
such appointment within 30 days after the retiring Collateral Agent's giving of
notice of resignation or such removal, then the retiring Collateral Agent may
petition any court of competent jurisdiction for the appointment of a successor
Collateral Agent. The Collateral Agent shall be a bank which has an office in
New York, New York with a combined capital and surplus of at least $50,000,000.
Upon the acceptance of any appointment as Collateral Agent hereunder by a
successor Collateral Agent, such successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent, and the retiring Collateral Agent shall take
all appropriate action to transfer any money and property held by it hereunder
(including the Pledged Securities) to such successor Collateral Agent. The
retiring Collateral Agent shall, upon such succession, be discharged from its
duties and obligations as Collateral Agent hereunder. After any retiring
Collateral Agent's resignation hereunder as Collateral Agent, the provisions of
this Section 8 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Collateral
Agent. Any resignation or removal of the Collateral Agent shall be deemed a
simultaneous resignation or removal of the Securities Intermediary.
8.9 Right to Appoint Agent or Advisor. The Collateral Agent shall have
the right to appoint agents or advisors in connection with any of its duties
hereunder, and the Collateral Agent shall not be liable for any action taken or
omitted by such agents or advisors selected in good faith.
13
<PAGE> 15
The provisions of this Section 8 shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent.
SECTION 9. Miscellaneous.
9.1 Amendments. This Agreement may be amended in the manner set forth
in Section 8.01 of the Master Unit Agreement for supplemental agreements. In
executing any amendment permitted by this Section, the Collateral Agent shall be
entitled to receive and (subject to Section 8.1 hereof) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and is for a purpose set
forth in Section 8.01 of the Master Unit Agreement.
9.2 No Waiver. No failure on the part of the Collateral Agent or any of
its agents to exercise, and no course of dealing with respect to, and no delay
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Collateral Agent or any
of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
9.3 Governing Law. THIS AGREEMENT AND THE COLLATERAL ACCOUNT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. Regardless of any
provision in any provision in any other agreement for purposes of the UCC, New
York shall be deemed to be the Securities Intermediary's jurisdiction and the
Collateral Account (as well as the securities entitlements related thereto)
shall be governed by the laws of the State of New York. The Company, the Call
Option Holder, the Collateral Agent, the Unit Agent and the Holders from time to
time of the Units, acting through the Unit Agent as their attorney-in-fact,
hereby submit to the nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New York state court
sitting in New York City for the purposes of all legal proceedings arising out
of or relating to this Agreement or the transactions contemplated hereby. The
Company, the Call Option Holder, the Collateral Agent and the Holders from time
to time of the Units, acting through the Unit Agent as their attorney-in-fact,
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
14
<PAGE> 16
9.4 Legal Holidays. In any case where any Quarterly Payment Date or the
Stock Purchase Date shall not be a Business Day, then (notwithstanding any other
provision of this Agreement or of the Units) the actions required by this
Agreement to occur on such date shall not occur on such date, but instead shall
occur on the next succeeding Business Day with the same force and effect as if
they had occurred on such Quarterly Payment Date or Stock Purchase Date, as the
case may be; except that if such next succeeding Business Day is in the next
calendar year, such actions shall occur on the immediately preceding Business
Day with the same force and effect as if made on such Quarterly Payment Date or
Stock Purchase Date.
9.5 Notices. All notices, requests, consents and other communications
provided for herein (including, without limitation, any modifications of, or
waivers or consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telecopy) delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof or, as to any party, at such other address as shall be designated by such
party in a notice to the other parties. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
9.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the Company,
the Call Option Holder, the Collateral Agent, the Securities Intermediary and
the Unit Agent, and the Holders from time to time of the Units, by their
acceptance of the same, shall be deemed to have agreed to be bound by the
provisions hereof and to have ratified the agreements of, and the grant of the
Pledge hereunder by, the Unit Agent, as their attorney-in-fact.
9.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
9.8 Severability. If any provision hereof is invalid or unenforceable
in any jurisdiction, then, to the fullest extent permitted by law, (a) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (b) the invalidity or unenforceability
of any provision hereof in any
15
<PAGE> 17
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
9.9 Expenses, etc. The Company agrees to reimburse the Collateral Agent
and the Securities Intermediary for: (a) all reasonable out-of-pocket costs and
expenses of the Collateral Agent or the Securities Intermediary, as the case may
be, (including, without limitation, the reasonable fees and expenses of counsel
to the Collateral Agent or the Securities Intermediary, as the case may be), in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver of
any of the terms of this Agreement; (b) all reasonable costs and expenses of the
Collateral Agent or the Securities Intermediary, as the case may be (including,
without limitation, reasonable fees and expenses of counsel), in connection with
(i) any enforcement or proceedings resulting or incurred in connection with
causing any Holder of Units to satisfy its obligations under the Purchase
Contracts or Call Options forming a part of the Units and (ii) the enforcement
of this Section 9.9; and (c) all transfer, stamp, documentary or other similar
taxes, assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any other document referred to herein and all
costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated hereby.
9.10 Security Interest Absolute. All rights of the Collateral Agent and
security interests hereunder, and all obligations of the Holders from time to
time of the Units here under, shall be absolute and unconditional irrespective
of:
(a) any lack of validity or enforceability of any provision of the
Units or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of Units under the related Purchase Contracts or Call Options or any
other amendment or waiver of any term of, or any consent to any departure from
any requirement of, the Master Unit Agreement or any Units or any other
agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
16
<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed as of the day and year first above written.
CMS ENERGY CORPORATION THE CHASE MANHATTAN BANK,
as Collateral Agent and Securities
Intermediary
By: /s/ ALAN M. WRIGHT By: /s/ LARRY O'BRIEN
----------------------------------- -----------------------------------
Name:Alan M. Wright Name:Larry O'Brien
Title:Senior Vice President and Title:Vice President
Chief Financial Office
Address for Notices: Address for Notices:
Fairlane Plaza South, Suite 1100 450 West 33rd Street, 15th Floor
330 Town Center Drive New York, New York 10001
Dearborn, Michigan 48126 Attention: Corporate Trust Department
Attention: General Counsel Telecopy: (212) 946-8159
Telecopy: (313) 436-9258
DONALDSON, LUFKIN & JENRETTE THE BANK OF NEW YORK, as Unit
SECURITIES CORPORATION, Agent and as attorney-in-fact of the
as Call Option Holder Holders from time to time of the Units
By:/s/ GAVIN H. WOLFE By:/s/ MICHAEL CULHANE
----------------------------------- -----------------------------------
Name:Gavin H. Wolfe Name:Michael Culhane
Title:Vice President Title:Vice President
Address for Notices: Address for Notices:
277 Park Avenue 101 Barclay Street
New York, New York 10172 New York, New York 10286
Attention: Registration Department Attention: Corporate Trust
Administration
Telecopy: (212) 815-7157
17
<PAGE> 1
Exhibit 4(v)
===============================================================================
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION,
as Call Option Holder
AND
THE BANK OF NEW YORK,
as Unit Agent and as Attorney-In-Fact
--------------
CALL OPTION AGREEMENT
--------------
Dated as of July 8, 1999
===============================================================================
<PAGE> 2
CALL OPTION AGREEMENT
CALL OPTION AGREEMENT, dated as of July 8, 1999, between Donaldson,
Lufkin & Jenrette Securities Corporation, as Call Option Holder, and The Bank
of New York, as Unit Agent and as attorney-in-fact of the Holders from time to
time of the Normal Units.
RECITALS
CMS Energy Corporation and the Unit Agent are parties to the Master
Unit Agreement, dated as the date hereof (as the same may be supplemented or
amended in accordance with the terms thereof, the "Master Unit Agreement"). The
Master Unit Agreement contemplates that the Trust will issue Trust Preferred
Securities and the Company will issue the Junior Subordinated Debentures, and
that Trust Preferred Securities or Junior Subordinated Debentures will form a
part of Normal Units outstanding from time to time thereunder.
It is intended that the Holders from time to time of the Normal Units
grant Call Options entitling the Call Option Holder to acquire the Trust
Preferred Securities or Junior Subordinated Debentures forming a part of the
related Normal Units on the terms and subject to the conditions set forth
herein. Pursuant to the terms of the Principal Agreements and the Unit
Certificates for the Normal Units, the Holders from time to time of the Normal
Units irrevocably authorize the Unit Agent, as attorney-in-fact of such
Holders, to enter into such Call Options and execute and deliver this Agreement
on behalf of such Holders.
Accordingly, the Call Option Holder and the Unit Agent, on its own
behalf and as attorney-in-fact of the Holders from time to time of the Normal
Units, agree as follows:
ARTICLE I
Definitions
Section 1.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) capitalized terms used herein and not defined are used
herein as defined in the Master Unit Agreement; and
<PAGE> 3
(b) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Aggregate Call Option Exercise Consideration" means consideration
comprised of:
(a) Treasury Securities that through their scheduled payments
will generate by each Quarterly Payment Date falling after the Call Settlement
Date and on or before the Stock Purchase Date an amount of cash equal to the
aggregate distributions or interest payments that are scheduled to be payable
in respect of the Trust Preferred Securities or Junior Subordinated Debentures,
as the case may be, that form a part of the Normal Units on such Quarterly
Payment Date (assuming for this purpose, even if not true, that (i) no
distributions or interest payments will then have been deferred and (ii) that
the rate of distribution on the Trust Preferred Securities and the rate of
interest on the Junior Subordinated Debentures remains at 8.625%);
(b) Treasury Securities that through their scheduled payments
will generate by the Stock Purchase Date an amount of cash equal to the
aggregate Stated Amount of the Normal Units; and
(c) if the Company is, at the Call Settlement Date, deferring
distributions on the Trust Preferred Securities or interest payments on the
Junior Subordinated Debentures, an amount in cash equal to (i) the aggregate
unpaid distributions on the Trust Preferred Securities or interest payments on
the Junior Subordinated Debentures that form a part of the Normal Units accrued
to the Call Settlement Date, if the Call Settlement Date is a Quarterly Payment
Date, or (ii) the aggregate unpaid distributions on the Trust Preferred
Securities or interest payments on the Junior Subordinated Debentures that form
a part of the Normal Units accrued to the Quarterly Payment Date immediately
preceding the Call Settlement Date plus interest thereon at the Deferral Rate
for the period from and including such Quarterly Payment Date to but excluding
such Call Settlement Date (computed on the basis of a 360-day year of twelve
30-day months), if the Call Settlement Date is not a Quarterly Payment Date.
"Call Option Expiration Date" means April 1, 2002 (or, if such date is
not a Business Day, the next succeeding Business Day).
2
<PAGE> 4
ARTICLE II
Call Option
Section 2.1 Grant. The Unit Agent, on behalf of and as
attorney-in-fact for the Holders from time to time of the Normal Units, hereby
grants the Call Options to the Call Option Holder on the terms and subject to
the conditions set forth herein.
Section 2.2 Consideration. As consideration for such Call Options,
concurrently with the execution hereof, the Call Option Holder is paying to the
underwriters under the Underwriting Agreement (who are acting in this regard on
behalf of the initial investors in the Normal Units) an amount equal to $.0415
per Call Option.
Section 2.3 Expiration or Termination of Call Options. The Call
Options shall be irrevocable, but the Call Options and the rights of the Call
Option Holder and the obligations of the Holders of Normal Units thereunder
shall (a) expire on the Call Option Expiration Date if the Call Settlement Date
has not occurred on or prior to such date and (b) automatically terminate upon
the occurrence of a Termination Event.
ARTICLE III
Exercise of Call Options
Section 3.1 Exercise Mechanics.
(a) The Call Option Holder may exercise all (but not less than
all) the Call Options by (i) delivering to the Unit Agent and the Collateral
Agent, on or prior to the Call Option Expiration Date, a notice, substantially
in the form set forth in Annex A attached hereto, stating that the Call Option
Holder is exercising its Call Options and specifying the Call Settlement Date
therefor (which must be a Business Day falling on or before the Call Option
Expiration Date) and (ii) delivering to the Collateral Agent, by Noon, New York
City time, on the Call Settlement Date, the Aggregate Call Option Exercise
Consideration.
(b) Pursuant to the Pledge Agreement, upon receipt by the
Collateral Agent of the Aggregate Call Option Exercise Consideration in the
manner contemplated hereby and by the Pledge Agreement, the Collateral Agent
shall release
3
<PAGE> 5
the Trust Preferred Securities or Junior Subordinated Debentures that form a
part of the Normal Units, free and clear of any lien, pledge or security
interest created by the Pledge Agreement, and transfer such released Trust
Preferred Securities or Junior Subordinated Debentures to the Call Option
Holder or its designee as specified in the notice referred to in Section 3.1(a)
above.
(c) The Unit Agent shall, not later than three Business Days
following the Call Settlement Date, mail notice of the exercise of the Call
Options to the Holders of Normal Units in the manner prescribed by the Master
Unit Agreement.
ARTICLE IV
Miscellaneous
Section 4.1 This Agreement may be amended in the manner set forth in
Section 801 of the Master Unit Agreement with respect to supplemental
agreements.
Section 4.2 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THEREOF. The Call Option Holder, the Unit Agent
and the Holders from time to time of the Normal Units, acting through the Unit
Agent as their attorney-in-fact, hereby submit to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and
of any New York state court sitting in New York City for the purposes of all
legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Call Option Holder, the Unit Agent and
the Holders from time to time of the Normal Units, acting through the Unit
Agent as their attorney-in-fact, irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or hereafter have
to the laying of the venue of any such proceeding brought in such a court and
any claim that any such proceeding brought in such a court has been brought in
an inconvenient forum.
Section 4.3 Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to
4
<PAGE> 6
any party, at such other address as shall be designated by such party in a
notice to the other party. Except as otherwise provided in this Agreement, all
such communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
Section 4.4 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Call Option Holder and the Unit Agent, and the Holders from time to time of the
Normal Units, by their acceptance of the same, shall be deemed to have agreed
to be bound by the provisions hereof and to have ratified the agreements of,
and the grant of the Call Options hereunder by, the Unit Agent.
Section 4.5 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 4.6 Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (a) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (b) the
invalidity or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provision in any other
jurisdiction.
5
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this Call Option
Agreement to be duly executed as of the day and year first above written.
<TABLE>
<S> <C>
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION,
as Call Option Holder
By: /s/ GAVIN WOLFE
--------------------------------------------
Name: Gavin Wolfe
Title: Vice President
Address for Notices:
277 Park Avenue
New York, New York 10172
Attention: Registration Department
THE BANK OF NEW YORK,
as Unit Agent and as attorney-in-fact of the
Holders from time to time of the Normal Units
By: /s/ MICHAEL CULHANE
--------------------------------------------
Name: Michael Culhane
Title: Vice President
Address for Notices:
101 Barclay Street, Floor 21W
New York, New York 10286
Attention: Corporate Trust Administration
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6
<PAGE> 8
ANNEX A
EXERCISE NOTICE
Reference is made to the Call Option Agreement, dated as of July 8,
1999 (the "Call Option Agreement"), between Donaldson, Lufkin & Jenrette
Securities Corporation, as Call Option Holder, and The Bank of New York, as
Unit Agent and attorney-in-fact of the Holders from time to time of the Normal
Units. Capitalized terms used herein but not defined are used herein as defined
in the Call Option Agreement.
The undersigned hereby exercises all of the Call Options underlying
the Normal Units and specifies ______________ as the Call Settlement Date.
Certificates representing the Trust Preferred Securities or Junior Subordinated
Debentures underlying the Normal Units should be registered in the name of
____________ and delivered to [insert address].
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
As Call Option Holder
-----------------------------------------
(Donaldson, Lufkin & Jenrette
Securities Corporation)
Date:
---------------
<PAGE> 1
[SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP LETTERHEAD]
July 1, 1999
CMS Energy Corporation
CMS Energy Trust II
c/o CMS Energy Corporation
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
Re: Offering of Adjustable Convertible Trust Securities
(Registration Statement No. 333-68937)
Ladies and Gentlemen:
We have acted as special tax counsel to CMS Energy Corporation, a
corporation organized under the laws of the state of Michigan (the "Company"),
and CMS Energy Trust II, a statutory business trust formed under the Business
Trust Act of the State of Delaware (the "Trust"), in connection with the
preparation and filing with the Securities and Exchange Commission (the
"Commission") of the above-captioned registration statement, as amended, on
Form S-3 (the "Registration Statement") on May 7, 1999, under the Securities
Act of 1933, as amended (the "Act"), in accordance with the procedures of the
Commission permitting a delayed or continuous offering pursuant to Rule 415 of
the General Rules and Regulations under the Act relating to the registration of
(i) Trust Originated Preferred Securities representing undivided beneficial
interests in the assets of the Trust (the "Trust Preferred Securities"), (ii)
Junior Subordinated Debentures issued by the Company to the Trust in connection
with the issuance of the Trust Preferred Securities (the "Junior Subordinated
Debentures"), (iii) the Company's Common Stock, par value $.01 per share (the
"Common Stock"), and (iv) Adjustable Convertible Trust Securities consisting of
(A) units (referred to as Normal Units), initially comprised of stock purchase
contracts (the "Purchase Contracts") and beneficial ownership of Trust Preferred
Securities and (B) units (referred to as Stripped Units) comprised of
<PAGE> 2
CMS Energy Corporation
July 8, 1999
Page 2
Purchase Contracts and beneficial ownership of zero-coupon U.S. Treasury
Securities, as described in the Prospectus Supplement dated July 1, 1999,
forming a part of such Registration Statement (the "Prospectus Supplement").
In rendering our opinion, we have participated in the preparation of
the Registration Statement and the Prospectus Supplement. Our opinion is
conditioned on, among other things, the initial and continuing accuracy of the
facts, information, covenants, and representations set forth in the
Registration Statement, the Prospectus Supplement, and certain other documents
and statements and representations made by officers of the Company. In our
examination, we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies, and the authenticity of the originals
of such documents. We also have assumed that the transactions related to the
issuance of the Trust Preferred Securities, the Junior Subordinated Debentures,
and the Adjustable Convertible Trust Securities will be consummated in the
manner contemplated by the Registration Statement and the Prospectus
Supplement.
In rendering our opinion, we have considered the current provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations (proposed, temporary and final) promulgated thereunder, judicial
decisions, and Internal Revenue Service ("IRS") rulings, all of which are
subject to change, which changes may be retroactively applied. A change in the
authorities upon which our opinion is based could affect our conclusions. There
can be no assurance, moreover, that any of the opinions expressed herein will
be accepted by the IRS or, if challenged, by a court.
Based solely upon the foregoing, we are of the opinion that, under
current United States federal income tax law:
(1) the Trust will be classified as a grantor trust and not as an
association subject to tax as a corporation for United States
federal income tax purposes; and
(2) Although the discussion set forth in the Prospectus Supplement
included as part of the Registration Statement under the heading
"CERTAIN FEDERAL INCOME TAX CONSE-
<PAGE> 3
CMS Energy Corporation
July 8, 1999
Page 3
QUENCES" does not purport to discuss all possible United States
federal income tax consequences of the purchase, ownership, and
disposition of Trust Preferred Securities and Adjustable Convertible
Trust Securities, in our opinion, based solely upon the foregoing,
such discussion constitutes, in all material respects, a fair and
accurate summary under current law of the material United States
federal income tax consequences of the purchase, ownership, and
disposition of the Trust Preferred Securities, Adjustable Convertible
Trust Securities and Common Stock to investors generally.
Except as set forth above, we express no opinion of any party as to the
tax consequences, whether Federal, state, local, or foreign, of the issuance of
the Trust Preferred Securities, the Junior Subordinated Debentures, the
Adjustable Convertible Trust Securities or of any transaction related to or
contemplated by such issuance. This opinion is furnished to you solely for your
benefit and the benefit of purchasers pursuant to and in connection with the
initial offering of the Adjustable Convertible Trust Securities and is not to
be used, circulated, quoted or otherwise referred to for any other purpose or
relied upon by any other person without our prior written consent. We consent
to the use of our name under the heading "LEGAL OPINIONS" in the Prospectus
Supplement. We consent to the reference to and discussion of this opinion
under the heading "CERTAIN FEDERAL INCOME TAX CONSEQUENCES" in the Prospectus
Supplement. We hereby consent to the filing of this opinion with the Commission
as Exhibit 8 to the Registration Statement. In giving this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or the rules and
regulations of the Commission promulgated thereunder. This opinion is
expressed as of the date hereof, unless otherwise expressly stated, and we
disclaim any undertaking to advise you of any subsequent changes of the facts
stated or assumed herein or any subsequent changes in applicable law.
Very truly yours,
/s/ SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
