<PAGE> 1
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) June 29, 1999
CMS ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN 1-9513 38-2726431
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Fairlane Plaza South, Suite 1100,
330 Town Center Drive,
Dearborn, Michigan 48126
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (313) 436-9261
N/A
(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 Registra-
tion Statement 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) Form of Underwriting Agreement among CMS Energy Corpora-
tion, Salomon Smith Barney Inc., Donaldson, Lufkin &
Jenrette Securities Corporation and Banc of America
Securities LLC with respect to the Units.
4(t) Form of Master Unit Agreement between CMS Energy Corpo-
ration 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) Form of Pledge Agreement among CMS Energy Corporation, The
Bank of New York, as Unit Agent, and The Chase Manhattan
Bank, as Collateral Agent.
4(v) Form of Call Option Agreement between Donaldson, Lufkin &
Jenrette Securities Corporation and The Bank of New York,
as Unit Agent and as Attorney-In-Fact .
The following exhibit is filed in connection with an issuance of
trust preferred securities by CMS RHINOS Trust and execution of a
forward underwriting contract by CMS Energy Corporation:
99(a) Summary of Principal Terms of Redeemable Hybrid Income
Overnight Shares (RHINOS) Transaction which closed June
10, 1999
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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: June 29, 1999 By: /s/ Thomas A. McNish
------------------------------------
Name: Thomas A. McNish
Title: Vice President and Secretary
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
1(c) Form of Underwriting Agreement among CMS Energy Corpora-
tion, Salomon Smith Barney Inc., Donaldson, Lufkin &
Jenrette Securities Corporation and Banc of America
Securities LLC with respect to the Units.
4(t) Form of Master Unit Agreement between CMS Energy Corpo-
ration and The Bank of New York, as Unit Agent.
4(t)(1) Form of Normal Units Certificate (included as Exhibit A to
Exhibit 4(t)).
4(t)(2) Form of Stripped Units Certificate (included as Exhibit B to
Exhibit 4(t)).
4(u) Form of Pledge Agreement among CMS Energy Corporation, The
Bank of New York, as Unit Agent, and The Chase Manhattan
Bank, as Collateral Agent.
4(v) Form of Call Option Agreement between Donaldson, Lufkin &
Jenrette Securities Corporation and The Bank of New York, as
Unit Agent and as Attorney-In-Fact.
99(a) Summary of Principal Terms of Redeemable Hybrid Income
Overnight Shares (RHINOS) Transaction which closed June 10,
1999
</TABLE>
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EXHIBIT 1 (c)
CMS ENERGY CORPORATION
CMS ENERGY TRUST II
% ADJUSTABLE CONVERTIBLE TRUST SECURITIES
(Stated Amount $ per Unit)
---------------------------------------------------
UNDERWRITING AGREEMENT
----------------------
July __, 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 ____ __%
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 Firm
Units, pursuant to the Master Unit Agreement to be dated as of July , 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 $ Trust Preferred Securities (liquidation amount $___ 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 , 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 $___ per common security) (the "Trust
Common Securities"), ___ % 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 a Third
Supplemental Indenture (the "Supplemental Indenture") dated as of July __, 1999
between the Company and the Debenture Trustee (the Base Indenture as so
supplemented, the "Indenture"). 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 Trust Agreement (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 __, 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 , 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, 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 ____
additional Purchase Contracts and the Trust and the Company propose to grant the
Underwriters an option to purchase up to ____ 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 (Registration No.
333-68937) (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); 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
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the Rule 462(b) Registration Statement, if any, including all 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
annual 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
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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 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;
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(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 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;
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(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 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
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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 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, or, after giving effect to the offering and sale of the Units, will
be an "investment company" within the
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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 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
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security, for the performance when due, by the holders of the Units, 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 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 $_____ 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,
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<PAGE> 11
(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
(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____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____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 $____ per Call Option at the appropriate Time of
Delivery.
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<PAGE> 12
(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 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 __, 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.
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<PAGE> 13
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 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
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<PAGE> 14
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 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 ___ 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;
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<PAGE> 15
(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 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:
15
<PAGE> 16
(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 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;
(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;
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<PAGE> 17
(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 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
17
<PAGE> 18
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 qualifica tion 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 "Descrip tion 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 "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
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<PAGE> 19
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 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
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<PAGE> 20
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 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,
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<PAGE> 21
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.
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 or opinions 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 b 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's 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 enforce
ability 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 the
bankruptcy exceptions; provided, however, that based on a review of
applicable case law, upon the occurrence of a Termination Event,
Section 365 (e)(2) of the Bankruptcy Code (11 U.S.C. ss.ss. 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 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 summary set forth in the
prospectus included as part of the Registration Statement
under the caption "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 the Firm Units such summary is a fair
21
<PAGE> 22
and accurate summary of the material aspects of the United
States federal income tax treatment, under current law, of
an investment in the Firm Units.
(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;
(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
22
<PAGE> 23
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 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
23
<PAGE> 24
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
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.
24
<PAGE> 25
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.
(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
25
<PAGE> 26
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 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,
26
<PAGE> 27
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.
(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
27
<PAGE> 28
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 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
28
<PAGE> 29
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.
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.
29
<PAGE> 30
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:
---------------------------------
Alan M. Wright
Administrative Trustee
CMS ENERGY CORPORATION
By:
---------------------------------
Alan M. Wright
Senior Vice President,
Chief Financial Officer and Treasurer
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:
-------------------------------------------
Name:
Title: Authorized Signatory
31
<PAGE> 32
SCHEDULE I
REPRESENTATIVES:
32
<PAGE> 33
SCHEDULE II
<TABLE>
<CAPTION>
NUMBER OF OPTIONAL UNITS
NUMBER OF FIRM UNITS TO BE PURCHASED IF
UNDERWRITERS TO BE PURCHASED MAXIMUM OPTION EXERCISED
------------ --------------- ------------------------
<S> <C> <C>
Salomon Smith Barney Inc.
Donaldson Lufkin & Jenrette
Securities Corporation
Banc of America LLC
======================== =========================
Total.....................
</TABLE>
<PAGE> 1
EXHIBIT 4(t)
================================================================================
CMS ENERGY CORPORATION
AND
THE BANK OF NEW YORK
as Unit Agent
---------------------------
MASTER UNIT AGREEMENT
---------------------------
Dated as of July , 1999
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
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..................................................................18
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
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SECTION 3.07 Persons Deemed Owners.........................................................23
SECTION 3.08 Cancellation..................................................................24
SECTION 3.09 Substitution of Pledged Securities and Creation of
Stripped Units; Units Not Otherwise Separable................................25
SECTION 3.10 Payments on the Units.........................................................27
ARTICLE IV THE PLEDGED SECURITIES................................................................28
SECTION 4.01 INTENTIONALLY LEFT BLANK......................................................28
SECTION 4.02 Transfer of Pledged Securities Upon Occurrence
of Termination Event..........................................................28
ARTICLE V THE PURCHASE CONTRACTS................................................................29
SECTION 5.01 Purchase of Shares of Common Stock............................................29
SECTION 5.02 Contract Payments.............................................................31
SECTION 5.03 Deferral of Payment Dates For Contract Payment................................31
SECTION 5.04 Payment of Purchase Price.....................................................33
SECTION 5.05 Issuance of Shares of Common Stock............................................35
SECTION 5.06 Adjustment of Settlement Rate.................................................36
SECTION 5.07 Notice of Adjustments and Certain Other Events................................42
SECTION 5.08 No Fractional Shares..........................................................43
SECTION 5.09 Charges and Taxes.............................................................43
SECTION 5.10 Termination Event; Notice.....................................................44
ARTICLE VI REMEDIES..............................................................................44
SECTION 6.01 Unconditional Rights of Holders...............................................44
SECTION 6.02 Restoration of Rights and Remedies............................................45
SECTION 6.03 Rights and Remedies Cumulative................................................45
SECTION 6.04 Delay or Omission Not Waiver..................................................45
SECTION 6.05 Undertaking for Costs.........................................................45
SECTION 6.06 Waiver of Stay or Extension Laws..............................................46
ARTICLE VII THE UNIT AGENT........................................................................46
SECTION 7.01 Certain Duties and Responsibilities...........................................46
SECTION 7.02 Notice of Default.............................................................47
SECTION 7.03 Certain Rights of Unit Agent..................................................47
SECTION 7.04 Not Responsible for Recitals or Issuance of Units.............................49
SECTION 7.05 May Hold Units................................................................49
SECTION 7.06 Money Held in Trust...........................................................49
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SECTION 7.07 Compensation and Reimbursement................................................49
SECTION 7.08 Corporate Unit Agent Required; Eligibility....................................50
SECTION 7.09 Resignation and Removal; Appointment of
Successor.....................................................................50
SECTION 7.10 Acceptance of Appointment by Successor........................................52
SECTION 7.11 Merger, Conversion, Consolidation or Succession
to Business...................................................................52
SECTION 7.12 Preservation of Information; Communications to
Holders.......................................................................53
SECTION 7.13 No Obligations of Unit Agent..................................................53
SECTION 7.14 Tax Compliance................................................................54
ARTICLE VIII SUPPLEMENTAL AGREEMENTS...............................................................54
SECTION 8.01 Supplemental Agreements Without Consent of
Holders.......................................................................54
SECTION 8.02 Supplemental Agreements with Consent of
Holders.......................................................................55
SECTION 8.03 Execution of Supplemental Agreements..........................................57
SECTION 8.04 Effect of Supplemental Agreements.............................................57
SECTION 8.05 Reference to Supplemental Agreements..........................................57
ARTICLE IX CONSOLIDATION, MERGER, SALE OR
CONVEYANCE............................................................................58
SECTION 9.01 Covenant Not to Merge, Consolidate, Sell or
Convey Property Except Under Certain
Conditions....................................................................58
SECTION 9.02 Rights and Duties of Successor Corporation....................................58
SECTION 9.03 Opinion of Counsel to Unit Agent..............................................59
ARTICLE X COVENANTS.............................................................................59
SECTION 10.01 Performance Under Purchase Contracts..........................................59
SECTION 10.02 Maintenance of Office or Agency...............................................59
SECTION 10.03 Company to Reserve Common Stock...............................................60
SECTION 10.04 Covenants as to Common Stock..................................................60
SECTION 10.05 Statements of Officers of the Company as to
Default.......................................................................60
EXHIBIT A FORM OF NORMAL UNIT CERTIFICATE......................................................A-1
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SETTLEMENT INSTRUCTIONS...........................................................................A-6
FORM OF TRUST PREFERRED SECURITIES CERTIFICATE - FORM
OF FACE OF SECURITY ....................................................................AA-1
REQUEST TO CREATE STRIPPED UNITS..................................................................A-7
EXHIBIT B FORM OF STRIPPED UNIT CERTIFICATE....................................................B-1
SETTLEMENT INSTRUCTIONS...........................................................................B-6
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION.................................................AA-4
FORM OF REVERSE OF SECURITY......................................................................AA-5
ASSIGNMENT.......................................................................................AA-7
NOTICE TO REQUIRE EXERCISE OF JUNIOR SUBORDINATED
DEBENTURE PUT OPTION....................................................................AA-8
</TABLE>
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<PAGE> 6
MASTER UNIT AGREEMENT, dated as of July , 1999, between CMS Energy
Corporation, a Michigan corporation (the "Company"), and The Bank of New York,
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 1.01 Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular; 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 "con trolled" 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 Consideration Deliverable on Exercise of the Call Options"
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.
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<PAGE> 8
"Call Option Expiration Date" means , 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 who 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, a fee
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 503.
"Contract Payment Rate" means ______%.
"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 _________ ____________, New York, New York ______.
"Current Market Price" has the meaning specified in Section 506(a)(8).
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<PAGE> 9
"Declaration" means the Declaration of Trust, dated as of ___________
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 ____% 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.
"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 the date hereof, between
the Company 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 thereof.
"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.
4
<PAGE> 10
"Junior Subordinated Debentures" means the _____% Junior Subordinated
Deferrable Interest Debentures due , 2004 of the Company issued under the
Indenture.
"Normal Unit" means the rights to purchase Common Stock under a
Purchase Contract, 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; provided, however, that
the term "Normal Unit" will not include any Stripped Unit.
"NYSE" has the meaning specified in Section 501.
"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, except:
(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 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
5
<PAGE> 11
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 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.
"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.
"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.
6
<PAGE> 12
"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 _________, _________, ________ and
__________, commencing _________.
"Record Date", when used with respect to any payment date, means the
Business Day next preceding such payment date; provided, however, that if any
Units are no longer evidenced by a Global Unit Certificate, "Record Date", when
used with respect to any payment date for such Units, means the [first day of]
[fifteenth day of] [fifteenth day of the month preceding] the month in which
such payment date falls; 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 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 $_____ per Unit.
7
<PAGE> 13
"Stock Purchase Date" means ___________.
"Stripped Unit" means the rights to purchase Common Stock under a
Purchase Contract, 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; provided, however, that the term "Stripped
Unit" will only include Units issued as a result of a Stripped Unit Creation as
contemplated by Section 309.
"Stripped Unit Creation" has the meaning specified in Section 309(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 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 proceedings
to be adjudicated a bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent seeking
reorganization 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.
8
<PAGE> 14
"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 AmerUs Capital II, a statutory business trust created
under the laws of the State of Delaware.
"Trust Preferred Securities"(sm) means _____% 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
__________ among the Company, the Trust and Salomon Smith Barney Inc. and
Donaldson, Lufkin & Jenrette Securities Corporation, 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 305.
"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.
"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".
9
<PAGE> 15
SECTION 1.02 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.
SECTION 1.03 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.
10
<PAGE> 16
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 1.04 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 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.
11
<PAGE> 17
(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
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
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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 1.05 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 and personally delivered or mailed,
first-class postage prepaid, to the Unit Agent at ______________, Attention:
______________ or at any other address previously furnished in writing by the
Unit Agent to the Holders and the Company, 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.
SECTION 1.06 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.
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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 1.07 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 1.08 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 1.09 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.
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.
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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.
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 at
the Corporate Trust Office for inspection by any Holder.
ARTICLE II
UNIT CERTIFICATE FORMS
SECTION 2.01 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
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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 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 2.02 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 3.01 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 __________ [(subject to increase up to a maximum of ___________ to
the extent the over-allotment option of the underwriters under the Underwriting
Agreement is exercised)],
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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 3.02 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 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.
SECTION 3.03 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.
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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.
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 3.04 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
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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 benefits and the same obligations with respect to the
Units evidenced thereby as definitive Unit Certificates.
SECTION 3.05 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.
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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.
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:
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(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, 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
304, 306 or 805 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 3.06 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
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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.
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.
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SECTION 3.07 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 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 3.08 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 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 of as directed by Issuer Order.
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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.
SECTION 3.09 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 they 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 underlying 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
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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 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 305, 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.
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(d) Upon receipt of the amounts described in subclause (x) of clause
(i) of 3.09(a), The Collateral Agent will, in accordance with the terms of the
Pledge Agreement, promptly transfer such amounts to the Call Option Holder.
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 Section 4.01 or 5.04(b), will be
payable at the office of 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.
ARTICLE IV
THE PLEDGED SECURITIES
SECTION 4.01 INTENTIONALLY LEFT BLANK.
SECTION 4.02 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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<PAGE> 32
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 5.01 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, at a
price equal to the Stated Amount, a number of shares of Common Stock equal to
the Settlement Rate, unless, on or prior to the Stock Purchase Date, there shall
have
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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 $_____
(the "Threshold Appreciation Price"), ________ 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 $ (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, 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 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
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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 5.02 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 obligations with respect to such Contract Payments
[subordination language from indenture to be inserted].]
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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 5.03 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 or (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 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
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<PAGE> 36
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).
If any Contract Payments are payable by a Holder to the Company and
payments made in respect of Pledged Securities underlying such Holder's Units
are insufficient to cover such Holder's obligation to pay such Contract
Payments, such obligation shall be deferred until the earlier of the date
sufficient cash is available and the Stock Purchase Date. Any such 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.
SECTION 5.04 Payment of Purchase Price.
(a) 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
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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 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 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
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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;
(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).
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SECTION 5.05 Issuance of Shares of Common Stock.
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 Agent, for the benefit of the Holders of the Units, one or
more certificates representing the 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 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 5.06 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
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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 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
outstanding
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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
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
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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 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 determined 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
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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 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
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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 made to the Settlement Rate pursuant to paragraph (1), (2),
(3), (4), (5), (6), (7) or (10) of this Section 506(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.
In the event of (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 Pur chase Contract forming a part thereof, 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
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Event (provided that if the kind or amount of securities, cash and other
property receivable upon such Reorganization 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 by a
plurality 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 5.07 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 506 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 5.08 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 otherwise 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 5.09 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 unless or until
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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.
ARTICLE VI
REMEDIES
SECTION 6.01 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.
SECTION 6.02 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
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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 6.03 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 6.04 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 6.05 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, against any party litigant in such suit,
having due regard to the merits and 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 Outstanding Units, or to
any suit instituted by any Holder of Units for the enforcement of payments
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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 6.06 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 7.01 Certain Duties and Responsibilities.
(a) 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
(i) 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 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 conform to the requirements of this Agreement.
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(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 7.02 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 7.03 Certain Rights of Unit Agent.
Subject to the provisions of Section 7.01:
(a) the Unit Agent may rely and shall be 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 believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
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(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 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; 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.
SECTION 7.04 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
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use or application by the Company of the proceeds in respect of the Trust
Preferred Securities or Purchase Contracts.
SECTION 7.05 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 7.06 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 7.07 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 bad faith; and
(c) to 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 bad faith 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.
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SECTION 7.08 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 7.09 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 of resignation, the resigning Unit Agent may petition 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
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(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.
(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.
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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, 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 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.
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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 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
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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 8.01 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:
(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
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(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 8.02 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;
(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;
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(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.
SECTION 8.03 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 701) 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.
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<PAGE> 60
SECTION 8.04 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 8.05 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.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.01 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
55
<PAGE> 61
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 9.02 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
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 9.03 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.
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<PAGE> 62
ARTICLE X
COVENANTS
SECTION 10.01 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 10.02 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 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 10.03 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
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<PAGE> 63
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 10.04 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 10.05 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.
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<PAGE> 64
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CMS ENERGY CORPORATION
By:
-------------------------------
THE BANK OF NEW YORK, as Unit Agent
By:
-------------------------------
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<PAGE> 65
EXHIBIT A
FORM OF NORMAL UNIT CERTIFICATE
CMS ENERGY CORPORATION
_____% ADJUSTABLE CONVERTIBLE TRUST SECURITY UNITS
(STATED AMOUNT $____ PER NORMAL UNIT)
CUSIP No. ______
No. _____ _____ Normal Units
This Unit Certificate certifies that ____________ 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 __________ (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 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 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.
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Each Purchase Contract evidenced hereby obligates the Holder of this
Unit Certificate to purchase, and the Company to sell, on ___________ (the
"Stock Purchase Date"), at a price equal to $ (the "Stated Amount"), a number of
shares of Common Stock, 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 $ (the "Threshold Appreciation Price"), _________ 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 $ (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, 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.
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 ______________, unless prior
to the exercise thereof there shall have occurred a Termination Event. The Call
Option Holder may
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<PAGE> 67
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 Consideration
Deliverable Upon Exercise of Call Options, 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 Consideration Deliverable Upon Exercise of Call Options delivered
to the Collateral Agent will be substituted as the Pledged Securities underlying
the Normal Units.
The Company shall pay, on each ________, ________, __________ and
___________, commencing ___________ (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 _____% (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 503 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 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.
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<PAGE> 68
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 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.
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<PAGE> 69
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.
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<PAGE> 70
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:
------------------
HOLDER SPECIFIED ABOVE
By: The Bank of New York,
as Attorney-in-Fact of such Holder
By:
-------------------------------
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:
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:
-----------------------
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<PAGE> 71
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 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.
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<PAGE> 72
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 undersigned will pay any
transfer tax payable incident thereto.
The undersigned confirms that the requisite Treasury Securities, 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 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
----------------------------------
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-8
<PAGE> 73
EXHIBIT B
FORM OF STRIPPED UNIT CERTIFICATE
CMS ENERGY CORPORATION
_____% ADJUSTABLE CONVERTIBLE SECURITY UNITS
(STATED AMOUNT $____ PER UNIT)
CUSIP No. _______
No. _____ _____ Stripped Units
This Unit Certificate certifies that ____________ 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 __________ (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 __________ (the "Stock
Purchase Date"), at a price equal to $_____ (the "Stated Amount"), a number of
shares of Common Stock, par value per share ("Common Stock"), of the Company
equal to the Settlement Rate, unless on or prior to the Stock Purchase Date
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<PAGE> 74
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 $______ (the "Threshold Appreciation Price"),
___________ 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 $ (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, 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.
The Company shall pay, on each ________, ________, _______ and
__________, commencing ______________ (each, a "Quarterly Payment Date"), in
respect of each Purchase Contract evidenced hereby, a fee (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 _____% (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 503 of
the Master Unit Agreement. [The
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<PAGE> 75
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 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
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<PAGE> 76
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,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
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> 77
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:
------------------------
HOLDER SPECIFIED ABOVE
By: The Bank of New York,
as Attorney-in-Fact of such Holder
By:
--------------------------------
Dated:
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:
----------------------------
B-5
<PAGE> 78
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 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.
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-6
<PAGE> 79
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 INCOME 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> 80
Certificate Evidencing Trust Preferred Securities
of
CMS Energy Trust II
__% 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 interests in the assets of the Trust designated the ___%
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 , 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 _____
day of July, 1999.
CMS ENERGY TRUST II
By:
-----------------------------
Name:
Title: Administrator
AA-2
<PAGE> 81
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Preferred Securities referred to in the
within-mentioned Declaration.
Dated:
---------------
THE BANK OF NEW YORK, not in its
individual capacity, but solely as
Property Trustee
By:
-------------------------------
Authorized Signatory
AA-3
<PAGE> 82
FORM OF REVERSE OF SECURITY
Distributions payable on each Trust Preferred Security will be fixed at
a rate per annum of ___% 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 , 1999 and will be payable
quarterly in arrears, on , , , and of each year, commencing on
, 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> 83
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> 84
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.
AA-6
<PAGE> 85
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):
--------------------------------
- ------------------
(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.
AA-7
<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 , 1999
----
- --------------------------------------------------------------------------------
<PAGE> 2
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of July __, 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, 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 underlie 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 underlie 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 underlying such Units 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
(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 Consideration Deliverable on Exercise of the Call Options"
has the meaning specified in the Call Option Agreement.
<PAGE> 3
"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 Subpart O-Book-Entry Procedure
of Title 31 of the Code of Federal Regulations (31 CFR Section 306.115 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.
"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 Consideration Deliverable on Exercise of the Call Options,
"Date of Deemed Receipt" means, with respect to such payment, the Quarterly
Payment Date next succeeding such date of receipt.
"Present Value" shall have the meaning set forth in Section 5(g).
SECTION 2. The Pledge. The Holders from time to time of the Units
acting through the Unit Agent, as their attorney-in-fact, hereby 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.
Concurrently with the execution of this Agreement, the initial Holders of the
[first] ____________ Normal Units issued under the Master Unit Agreement, the
Unit Agent and the Collateral Agent are causing ________ Trust Preferred
Securities to be delivered to, and registered in the name of, 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
__________ 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, the Unit Agent and the
Collateral Agent shall cause a number of
2
<PAGE> 4
Trust Preferred Securities equal to the number of such Normal Units to be
delivered to, and registered in the name of, the Collateral Agent, and such
Trust Preferred Securities will thereupon constitute Pledged Securities forming
a part of such Normal Units.] In addition, the execution hereof by the Unit
Agent and the Collateral Agent shall constitute an acknowledgment by the
Collateral Agent (as securities intermediary or otherwise) of the Pledge and of
its holding of such Trust Preferred Securities or other Pledged Securities
substituted therefor in accordance with the provisions hereof subject to the
Pledge and of its crediting such Trust Preferred Securities or other Pledged
Securities to a separate account for purposes of perfecting the Pledge under
applicable law, including, to the extent applicable, the Uniform Commercial
Code as adopted and in effect in any applicable jurisdiction and the Applicable
Treasury Regulations. Subject to the Pledge, the Holders from time to time of
the Units shall have full beneficial ownership of the Pledged Securities
underlying 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. Payments in Respect of the Pledged Securities. Any payment
received by the Collateral Agent in respect of the Pledged Securities underlying
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 Business 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, (i) first, to the Company,
to the account designated by it for such purpose, in an amount equal to the
Contract Fees, if any, then payable to the Company in respect of such Units, and
(ii) second, to the extent of any amount remaining after the payment (if any)
referred to in clause (i) above, 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
3
<PAGE> 5
referred to in Section 4), to the Unit Agent, to the account designated by it
for 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 4. 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
underlie 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, shall thereupon, as Put Agent, exercise the
Junior Subordinated Debenture Put Option with respect thereto and (b) 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. 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
3(b).
SECTION 5. Release and Substitution of Pledged Securities. (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
4
<PAGE> 6
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.
(a) 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 underlying the Normal Units,
provided that the Collateral Agent receives the requisite Aggregate
Consideration Deliverable on Exercise of the Call Options 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 Consideration Deliverable On Exercise of the Call Options so received
by the Collateral Agent shall be subject to 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.
(b) In connection with a Stripped Unit Creation, upon request by the
Unit Agent to the Collateral Agent to release the then Pledged Securities
underlying the number of Normal Units indicated in such request, provided that
the Collateral Agent has received (i) the Treasury Securities and cash required
by Section 309(a)(i) of the Master Unit Agreement for a Stripped Unit Creation
relating to such Normal Units and (ii) if the Call Options underlying 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 underlying such Normal Units and agreeing that such Call
Options no longer underlie such Normal Units (or the Stripped Units, they
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 underlying the Stripped Units so
created.
(c) In connection with the delivery to the Collateral Agent of Treasury
Securities and cash pursuant to Section 5(b) or (c), such delivery shall be by
Federal Reserve Bank-Wire to the account of the Collateral Agent designated by
it for such purpose, and the Collateral Agent and the Call Option Holder or
transferring Holder
5
<PAGE> 7
of Normal Units, as the case may be, shall take appropriate action (i) so that
the applicable Federal Reserve Bank through which such Treasury Securities have
been purchased will reflect such transfer and the Pledge of such Treasury
Securities in accordance with Applicable Treasury Regulations and (ii) as may be
required to perfect the Pledge under Applicable Treasury Regulations.
(d) In the event the Trust is dissolved while any Trust Preferred
Securities are Pledged Securities underlying 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 underlying such
Normal Units.
(e) On the Stock Purchase Date, the Collateral Agent shall release the
Trust Preferred Securities or Junior Subordinated Debentures underlying Units
which are Paid Units (as specified in the notice from the 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,
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 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.
(f) 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.
6
<PAGE> 8
"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 6. Rights and Remedies. (a) The Collateral Agent shall have all
of the rights and remedies with respect to the Pledged Securities 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 Pledged Securities
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.
(a) 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
underlying any Units, the Collateral Agent shall have and may exercise, with
reference to the Pledged Securities underlying 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.
(b) 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.
(c) 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 7. The Collateral Agent. The Collateral Agent, the Company and
the Call Option Holder hereby agree among themselves as follows (it being under-
7
<PAGE> 9
stood and agreed that, except as provided in Section 7.08, neither the Unit
Agent nor any Holder of Units shall have any rights or duties under this Section
7):
7.1 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: (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, nor shall
the Collateral Agent 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 Master Unit Agreement, or
the Call Option Agreement or for the value, validity, effective ness,
genuineness, enforceability or sufficiency of this Agreement (other than as
against the Collateral Agent), 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) 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 7.2 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 to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder. In no event shall the Collateral Agent be liable
for any amount in excess of the value of the Pledged Securities.
7.2 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
8
<PAGE> 10
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 7.2 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.
7.3 Reliance by Collateral Agent. The Collateral Agent 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. 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.
7.4 Rights in Other Capacities. The Collateral Agent 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,
and the Collateral Agent 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.
7.5 Non-Reliance on Collateral Agent. The Collateral Agent shall not 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
9
<PAGE> 11
herein or therein or to inspect the properties or books of the Unit Agent or
any Holder of Units. The Collateral Agent shall not 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.
7.6 Compensation and Indemnity. The Company agrees: (a) to pay the
Collateral Agent from time to time reasonable compensation for all services
rendered by it hereunder and (b) to indemnify the Collateral Agent for, and to
hold it 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) 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.
7.7 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 or entity with respect to any funds or
property deposited hereunder, the Collateral Agent 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 the Collateral Agent shall not 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. The Collateral Agent 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 (b) the Collateral Agent shall
have received security or an indemnity satisfactory to the Collateral Agent
sufficient to save the Collateral Agent harmless from and against any and all
loss, liability or expense which the Collateral Agent may incur by reason of its
acting. The Collateral Agent may in addition elect to commence an interpleader
action or seek other judicial relief or orders as the Collateral Agent may deem
necessary. Notwithstanding anything contained herein to the contrary, the
Collateral Agent shall not 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.
10
<PAGE> 12
7.8 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 by the Unit Agent
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 7 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.
7.9 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.
11
<PAGE> 13
The provisions of this Section 7 shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent.
SECTION 8. Miscellaneous.
8.1 Amendments. This Agreement may be amended in the manner set forth
in Section 801 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 7.1 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 801 of the Master Unit Agreement.
8.2 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.
8.3 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 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, 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.
8.4 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
12
<PAGE> 14
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.
8.5 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.
8.6 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 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.
8.7 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.
8.8 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 jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
8.9 Expenses, etc. The Company agrees to reimburse the Collateral Agent
for: (a) all reasonable out-of-pocket costs and expenses of the Collateral Agent
13
<PAGE> 15
(including, without limitation, the reasonable fees and expenses of counsel to
the Collateral Agent), 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 (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
8.9; 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.
8.10 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.
14
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
CMS ENERGY CORPORATION
By:
--------------------------------
Name:
Title:
Address for Notices:
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
Attention: General Counsel
Telecopy:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION,
as Call Option Holder
-----------------------------------
(Donaldson, Lufkin & Jenrette
Securities Corporation)
Address for Notices:
277 Park Avenue
New York, New York 10172
Attention: Registration Department
CHASE MANHATTAN BANK,
as Collateral Agent
By:
--------------------------------
Name:
Title:
15
<PAGE> 17
Address for Notices:
-----------------------------------
-----------------------------------
Telecopy:
-----------------------------------
Attention:
-----------------------------------
THE BANK OF NEW YORK,
as Unit Agent and as attorney-in-
fact of the Holders from time to
time of the Units
By:
--------------------------------
Name:
Title:
Address for Notices:
-----------------------------------
-----------------------------------
Attention:
------------------------
16
<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 , 1999
- --------------------------------------------------------------------------------
<PAGE> 2
CALL OPTION AGREEMENT
CALL OPTION AGREEMENT, dated as of July , 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
GF 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 Company will issue Trust Preferred
Securities and Junior Subordinated Debentures, and that Trust Preferred
Securities or Junior Subordinated Debentures will underlie 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 underlying 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
underlying 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 %);
(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 underlying 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 underlying 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 , 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 $ 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 underlying 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 8.01 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 Agreement to be
duly executed as of the day and year first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION,
as Call Option Holder
(Donaldson, Lufkin & Jenrette
Securities Corporation)
Address for Notices:
277 Park Avenue
New York, New York 10172
Attention:
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:
----------------------------------------
Name:
Title:
Address for Notices:
6
<PAGE> 8
ANNEX A
EXERCISE NOTICE
Reference is made to the Call Option Agreement, dated as of July , 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:
---------------------
7
<PAGE> 1
EXHIBIT 99.(a)
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CMS ENERGY CORPORATION ("CMS")
REDEEMABLE HYBRID INCOME OVERNIGHT SHARES ("RHINOS")
ISSUANCE OF TRUST PREFERRED SECURITIES AND
FORWARD UNDERWRITING OF CMS COMMON STOCK
SUMMARY OF PRINCIPAL TERMS OF
TRANSACTION CLOSED JUNE 10, 1999
I. TRUST PREFERRED SECURITIES
Trust Securities Issuer: CMS RHINOS Trust
Initial Purchaser: A trust organized by Banc of America
Securities LLC("BAS")
Preferred Issue: Trust Preferred Securities
Preferred Issue Size: $250 million
Maturity Date: September 1, 2001
Distributions: LIBOR plus 175 basis points, adjusted
quarterly
Distribution Payments: Quarterly, provided that the Trust may
defer such payments (but no later than
the Maturity Date or earlier Redemption
Date), with such deferred payments
compounded quarterly, if CMS defers
interest on the Subordinated Notes.
Mandatory Redemption: The Trust Preferred Securities are
required to be redeemed for the face
amount thereof plus accrued and unpaid
distributions three months following an
underwriting of CMS Common Stock
pursuant to the Forward Underwriting
Agreement (described below) as follows:
(a) if the underwriting is for less
than $250 million, Trust
Preferred Securities in a face
amount equal to the aggregate
public offering price of the
underwritten shares will be
redeemed; and
(b) if the underwriting is for an
amount equal to or greater than
$250 million, the Trust
Preferred Securities will be
redeemed in full.
<PAGE> 2
Remarketing Provisions: If the CMS Common Stock price declines
to $29.00 (approximately 66-2/3% of the
closing price of the CMS Common Stock on
the date preceding closing), the holder
of the Trust Preferred Securities will
have the option to require BAS as the
Remarketing Agent to remarket the Trust
Preferred Securities. If remarketed, the
maturity of the remarketed securities
will be reset as the later of September
1, 2001 or one year from the date on
which the remarketed securities are
issued. The coupon will be reset
pursuant to a bid process to value the
remarketed securities at 100.25% of the
face amount thereof.
II. SUBORDINATED NOTES
Debt Issuer: CMS
Subordinated Note Purchaser: CMS RHINOS Trust
Debt Issue: Subordinated Notes
Debt Issue Size: $250 million ($258 million including
Subordinated Notes related to Trust
Common Securities)
Maturity Date: September 1, 2001
Interest: LIBOR plus 175 basis points, adjusted
quarterly
Interest Payments: Quarterly, provided that CMS may defer
such interest payments (but no later
than the Maturity Date or earlier
Redemption Date), with such deferred
payments compounded quarterly.
Remarketing Provisions: If under certain circumstances the Trust
is dissolved and the Initial Purchaser
directly holds the Subordinated Notes,
then the Remarketing Provisions
described above will be applicable to
the Subordinated Notes.
III. COMMON STOCK FORWARD UNDERWRITING AGREEMENT
Issuer: CMS
Underwriter: BAS
Issue: CMS Common Stock, par value $.01 per
share
Equity Issue Size: $250 million (plus a 15% over-allotment
option)
<PAGE> 3
Underwriting: CMS will designate by written notice to
BAS a time in CMS' discretion during the
period beginning June 9, 1999 and ending
June 9, 2001 for an underwriting of a
number of shares of CMS Common Stock
with an aggregate public offering price
of $250 million (plus the
over-allotment, if elected). If the
underwriting has not occurred prior to
April 9, 2001, BAS will be entitled to
designate a targeted date for an
underwriting of the shares. If an
underwriting is completed for less than
$250 million of shares, the underwriting
commitment will continue with respect to
the remainder of the amount.
Registration Covenant: CMS has agreed to maintain an effective
shelf registration statement with
availability for the issuance of up to
$250 million of shares of Common Stock
(plus the over-allotment).
