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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MARCH 19, 1997
MCN CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN 1-10070 38-2820658
State of Incorporation (Commission File (I.R.S. Employer
Number) Identification No.)
500 GRISWOLD STREET, DETROIT, MICHIGAN 48226
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(313) 256-5500
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ITEM 5. OTHER EVENTS
MCN Corporation ("MCN" or the "Registrant") is filing herewith the
following in connection with the offering of its 2,645,000 FELINE PRIDES
pursuant to the registration statement of the Registrant and MCN Financing III,
among others, on Form S-3 (No. 333-21175) filed with the Securities and
Exchange Commission under the Securities Act of 1933.
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
5.1 Underwriting Agreement dated March 19, 1997 with respect to the
FELINE PRIDES.
5.2 Amended and Restated Declaration of Trust of MCN Financing III,
dated as of March 19, 1997.
5.3 Third Supplemental Indenture, dated as of March 19, 1997, between
MCN and NBD Bank.
5.4 Preferred Securities Guarantee Agreement, dated as of March 19,
1997, between MCN and Wilmington Trust Company.
5.5 Purchase Contract Agreement dated March 25, 1997 between MCN
and The First National Bank of Chicago, as Purchase Contract Agent.
5.6 Pledge Agreement dated March 25, 1997 among MCN, Chase Manhattan
Bank, as Collateral Agent, and The First National Bank of Chicago,
as Purchase Contract Agent.
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SIGNATURE
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.
MCN CORPORATION
By /s/ Sebastian Coppola
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Sebastian Coppola
Senior Vice President and Treasurer
Date: March 27, 1997
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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5.1 Underwriting Agreement dated March 19, 1997 with respect to the
FELINE PRIDES.
5.2 Amended and Restated Declaration of Trust of MCN Financing III,
dated as of March 19, 1997.
5.3 Third Supplemental Indenture, dated as of March 19, 1997, between
MCN and NBD Bank.
5.4 Preferred Securities Guarantee Agreement, dated as of March 19,
1997, between MCN and Wilmington Trust Company.
5.5 Purchase Contract Agreement dated March 25, 1997 between MCN
and The First National Bank of Chicago, as Purchase Contract Agent.
5.6 Pledge Agreement dated March 25, 1997 among MCN, Chase Manhattan
Bank, as Collateral Agent, and The First National Bank of Chicago,
as Purchase Contract Agent.
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EXHIBIT 5.1
MCN CORPORATION
(A MICHIGAN CORPORATION)
MCN FINANCING III
(A DELAWARE BUSINESS TRUST)
2,300,000 FELINE PRIDES(SM)
(STATED AMOUNT OF $50 PER FELINE PRIDES)
EACH CONSISTING OF
A PURCHASE CONTRACT OF MCN CORPORATION
REQUIRING THE PURCHASE ON MAY 16, 2000 (OR EARLIER)
OF A NUMBER OF SHARES OF COMMON STOCK OF MCN CORPORATION
EQUAL TO THE SETTLEMENT RATE
AND
A 7 1/4% TRUST ORIGINATED PREFERRED SECURITIES
OF MCN FINANCING III
UNDERWRITING AGREEMENT
March 19, 1997
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
SMITH BARNEY INC.
LADENBURG THALMANN & CO. INC.
As the Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
MCN Corporation, a Michigan corporation, doing business as MCN Energy
Group Inc. (the "Company") and MCN Financing III, a
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(SM)"FELINE PRIDES", "Income PRIDES", "Trust Originated Preferred
Securities" and "TOPrS" are service marks of Merrill Lynch & Co. Inc.
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Delaware statutory business trust (the "Trust" and, together with the Company,
the "Offerors") confirm their agreement with the several underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Donaldson, Lufkin & Jenrette Securities
Corporation, Salomon Brothers Inc, Smith Barney Inc. and Ladenburg Thalmann &
Co. Inc., as representatives (in such capacity, collectively, the
"Representatives"), with respect to the sale to the Underwriters of FELINE
PRIDES(SM), each of which will initially consist of a unit (referred to as
Income PRIDES(SM)) with a Stated Amount of $50 comprised of (a) a stock
purchase contract (the "Purchase Contract") under which (i) the holder will
purchase from the Company on May 16, 2000, a number of shares of common stock,
par value $.01 per share, of the Company (the "Common Stock") equal to the
Settlement Rate as set forth in the Purchase Contract Agreement (defined below)
and (ii) the Company will pay to the holder contract adjustment payments, and
(b) beneficial ownership of a 7 1/4% Trust Originated Preferred Security(SM)
(the "Preferred Security") of the Trust, having a liquidation amount of $50
(the "Initial Securities"). The Company and the Trust also propose to grant to
the Underwriters an option to purchase up to 345,000 additional Income PRIDES
(the "Option Securities" and together with the Initial Securities, the
"Securities") as described in Section 2(b) hereof. In accordance with the
terms of the Purchase Contract Agreement, dated as of March 25, 1997, between
the Company and The First National Bank of Chicago, as Purchase Contract Agent
(the "Purchase Contract Agent"), the Preferred Securities constituting a part
of the Securities will be pledged by the Purchase Contract Agent, on behalf of
the holders of the Securities, to The Chase Manhattan Bank, as Collateral
Agent, pursuant to the Pledge Agreement, dated as of March 25, 1997 (the
"Pledge Agreement"), among the Company, the Purchase Contract Agent and the
Collateral Agent, to secure the holders' obligation to purchase Common Stock
under the Purchase Contracts. The rights and obligations of a holder of
Securities in respect of Preferred Securities, subject to the pledge thereof,
and Purchase Contracts will be evidenced by Security Certificates (the
"Security Certificates") to be issued pursuant to the Purchase Contract
Agreement.
The Preferred Securities will by guaranteed by the Company with
respect to distributions and payments upon liquidation, redemption and
otherwise (the "Preferred Securities Guarantee") pursuant to the Preferred
Securities Guarantee Agreement, dated as of March 19, 1997 (the "Preferred
Securities Guarantee Agreement"), executed and delivered by the Company and
Wilmington Trust Company, as trustee (the "Guarantee Trustee"), for the benefit
for the holders from time to time of the Preferred Securities, and certain
back-up undertakings of the Company. The entire proceeds from the sale of the
Preferred Securities will be combined with the entire proceeds from the sale by
the Trust to
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the Company of its common securities (the "Common Securities" and, together
with the Preferred Securities, the "Trust Securities") guaranteed by the
Company with respect to distributions and payments upon liquidation and
redemption (the "Common Securities Guarantee" and, together with the Preferred
Securities Guarantee, the "Guarantees") pursuant to the Common Securities
Guarantee Agreement, dated as of March 25, 1997 (the "Common Securities
Guarantee Agreement" and, together with the Preferred Securities Guarantee
Agreement, the "Guarantee Agreements"), executed and delivered by the Company
for the benefit of the holders from time to time of the Common Securities, and
certain backup undertakings of the Company, and will be used by the Trust to
purchase the 7 1/4% Junior Subordinated Debentures due May 16, 2002 (the
"Junior Subordinated Debentures") of the Company. The Preferred Securities and
the Common Securities will be issued pursuant to the amended and restated
declaration of trust of the Trust, dated as of March 19, 1997 (the
"Declaration"), among the Company, as Sponsor, Sebastian Coppola and Daniel L.
Schiffer (the "Regular Trustees"), Wilmington Trust Company, as institutional
trustee (the "Institutional Trustee") and Wilmington Trust Company (the
"Delaware Trustee" and, together with the Institutional Trustee and the Regular
Trustees, the "Trustees"), and the holders from time to time of undivided
beneficial interests in the assets of the Trust. The Junior Subordinated
Debentures will be issued pursuant to the Subordinated Debt Securities
Indenture, dated as of September 1, 1994 (the "Base Indenture"), between the
Company and NBD Bank, as Trustee (the "Debt Trustee"), as supplemented by the
First Supplemental Indenture, dated April 17, 1996, the Second Supplemental
Indenture, dated July 24, 1996 and the Third Supplemental Indenture, dated
March 19, 1997 (the Base Indenture, as supplemented and amended, being referred
to as the "Indenture"). Capitalized terms used herein without definition shall
be used as defined in the Prospectus.
Prior to the purchase and public offering of the Securities by the
several Underwriters, the Offerors and the Representatives, acting on behalf of
the several Underwriters, shall enter into an agreement substantially in the
form of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may
take the form of an exchange of any standard form of written communication
between the Offerors and the Representatives and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the
Securities will be governed by this Agreement, as supplemented by the Pricing
Agreement. From and after the date of the execution and delivery of the
Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing
Agreement.
The Company, and the Trust, MCN Financing II and MCN Financing IV
(collectively, the "MCN Trusts") have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-21175) and pre-
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effective amendment no. 1 thereto covering the registration of securities of
the Company and the MCN Trusts, including the Securities and the Purchase
Contracts and Preferred Securities included in and shares of Common Stock
underlying, the Securities, under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses, and
the offering thereof from time to time in accordance with Rule 415 of the rules
and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and the Company has filed such post-effective amendments thereto
as may be required prior to the execution of the Pricing Agreement. Such
registration statement, as so amended, has been declared effective by the
Commission. Such registration statement, as so amended, including the exhibits
and schedules thereto, if any, and the information, if any, deemed to be a part
thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A
Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), is referred to herein as the "Registration Statement"; and the
final prospectus and the prospectus supplement relating to the offering of the
Securities, in the form first furnished to the Underwriters by the Company for
use in connection with the offering of the Securities, are collectively
referred to herein as the "Prospectus"; provided, however, that all references
to the "Registration Statement" and the "Prospectus" shall be deemed to include
all documents incorporated therein by reference pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of
the applicable Pricing Agreement; provided, further, that if the Offerors file
a registration statement with the Commission pursuant to Section 462(b) of the
1933 Act Regulations (the "Rule 462(b) Registration Statement"), then after
such filing, all references to "Registration Statement" shall be deemed to
include the Rule 462(b) Registration Statement; and provided, further, that if
the Offerors elect to rely upon Rule 434 of the 1933 Act Regulations, then all
references to "Prospectus" shall be deemed to include the final or preliminary
prospectus and the applicable term sheet or abbreviated term sheet (the "Term
Sheet"), as the case may be, in the form first furnished to the Underwriters by
the Company in reliance upon Rule 434 of the 1933 Act Regulations, and all
references in this Underwriting Agreement to the date of the Prospectus shall
mean the date of the Term Sheet. A "preliminary prospectus" shall be deemed to
refer to any prospectus used before the registration statement became effective
and any prospectus that omitted, as applicable, the Rule 430A Information, the
Rule 434 Information or other information to be included upon pricing in a form
of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations, that was used after such effectiveness and prior to the execution
and delivery of the applicable Pricing Agreement. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the
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electronically transmitted copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
the Pricing Agreement has been executed and delivered and the Declaration, the
Indenture and the Preferred Securities Guarantee Agreement have been qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act").
SECTION 1. Representations and Warranties.
(a) The Offerors represent and warrant to each Underwriter as of the
date hereof and as of the date of the Pricing Agreement (such later date being
hereinafter referred to as the "Representation Date") that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been initiated or, to the knowledge of the Offerors, threatened by the
Commission.
(ii) The Company and the MCN Trusts meet, and at the
respective times of the commencement and consummation of the offering of the
Securities will meet, the requirements for the use of Form S-3 under the 1933
Act. Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act. At the respective times the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendments thereto (including the filing of the Company's most
recent Annual Report on Form 10-K with the Commission) became effective and at
each Representation Date, the Registration Statement, any Rule 462 Registration
Statement and any amendments or supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the rules and
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regulations of the Commission under the 1939 Act (the "1939 Act Regulations")
and did not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading. At the date of the Prospectus and at the
Closing Time (as defined herein), the Prospectus and any amendments and
supplements thereto did not and will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If the Offerors elect to rely upon Rule 434 of the 1933
Act Regulations, the Offerors will comply with the requirements of Rule 434.
Notwithstanding the foregoing, the representations and warranties in this
subsection shall not apply to (A) statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Offerors in writing by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement or the Prospectus or (B) the part of the Registration Statement which
shall constitute the Statement of Eligibility (Form T-1) under the 1939 Act.
Each preliminary prospectus and prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied as so filed
in all material respects with the 1933 Act Regulations and, if applicable, each
preliminary prospectus and the Prospectus delivered to the Underwriters for use
in connection with the offering of the Securities will, at the time of such
delivery, be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(iii) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement or the Prospectus, at the time they
were or hereafter are filed or last amended, as the case may be, with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act, and the rules and regulations of Commission
thereunder (the "1934 Act Regulations"), and at the time of filing or as of the
time of any subsequent amendment, did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were or are made, not misleading; and any additional documents
deemed to be incorporated by reference in the Registration Statement or the
Prospectus will, if and when such documents are filed with the Commission, or
when amended, as appropriate, comply in all material respects to the
requirements of the 1934 Act and the 1934 Act Regulations and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and
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warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Offerors by an
Underwriter through Merrill Lynch expressly for use in the Registration
Statement or the Prospectus.
(iv) The accountants who certified the financial statements
and supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(v) The financial statements of the Company included or
incorporated by reference in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries as at the dates
indicated and the results of their operations for the periods specified. Such
financial statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included or incorporated
by reference in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. The ratio
of earnings to fixed charges included in the Prospectus has been calculated in
compliance with Item 503(d) of Regulation S-K of the Commission. The selected
financial information and the summary financial data included in the Prospectus
present fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement and the Prospectus.
(vi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as otherwise
stated therein, (A) there has been no material adverse change and no
development which could reasonably be expected to result in a material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries, considered
as one enterprise (a "Material Adverse Effect"), whether or not arising in the
ordinary course of business, (B) there have been no transactions entered into
by the Company or any of its subsidiaries, other than those arising in the
ordinary course of business, which are material with respect to the Company and
its subsidiaries, considered as one enterprise, (C) except for regular
dividends on the Common Stock in amounts per share that are consistent with
past practice or the applicable charter document or supplement thereto,
respectively, there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
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(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Michigan, with corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as described
in the Prospectus and to enter into and perform its obligations under, or as
contemplated under, this Agreement, the Pricing Agreement, the Purchase
Contract Agreement, the Pledge Agreement and the Guarantee Agreements. The
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing would
not have a Material Adverse Effect.
(viii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate power and
authority to own, lease and operate its properties and to conduct its business
as presently conducted and as described in the Prospectus, and is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not have a
Material Adverse Effect. Except as otherwise stated in the Registration
Statement and the Prospectus, all of the issued and outstanding shares of
capital stock of each subsidiary of the Company have been duly authorized and
validly issued, are fully paid and non-assessable and all such shares are owned
by the Company, directly or through its subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity. None
of the outstanding shares of capital stock of the subsidiaries was issued in
violation of preemptive or other similar rights arising by operation of law,
under the charter or by-laws of any subsidiary or under any agreement to which
the Company or any subsidiary is a party, or otherwise.
(ix) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus; since the date indicated in the
Prospectus there has been no change in the consolidated capitalization of the
Company and its subsidiaries (other than changes in outstanding Common Stock
resulting from employee benefit plan or dividend reinvestment and stock
purchase plan transactions); and all of the issued and outstanding capital
stock of the Company has been duly authorized and validly issued, is fully paid
and non-assessable and conforms to the descriptions thereof contained in the
Prospectus.
(x) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Business Trust Act (the
"Delaware Act") with the power and
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authority to own property and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform its
obligations under this Agreement, the Pricing Agreement, the Preferred
Securities, the Common Securities and the Declaration; the Trust is duly
qualified to transact business as a foreign company and is in good standing in
each jurisdiction in which such qualification is necessary, except where the
failure to so qualify or be in good standing would not have a Material Adverse
Effect on the Trust; the Trust is not a party to or otherwise bound by any
agreement other than those described in the Prospectus; the Trust is and will,
under current law, be classified for United States federal income tax purposes
as a grantor trust and not as an association taxable as a corporation.
(xi) The Purchase Contract Agreement has been duly authorized
by the Company and, at the Closing Time, when validly executed and delivered by
the Company and assuming due authorization, execution and delivery of the
Purchase Contract Agreement by the Purchase Contract Agent, will constitute a
legal, 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 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 "Bankruptcy Exceptions"), and will conform
in all material respects to the description thereof contained in the
Prospectus.
(xii) The Pledge Agreement has been duly authorized by the
Company and, at the Closing Time, when validly executed and delivered by the
Company and assuming due authorization, execution and delivery of the Pledge
Agreement by the Collateral Agent and the Purchase Contract Agent, will
constitute a legal, 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 the Bankruptcy Exceptions, and will
conform in all material respects to the description thereof contained in the
Prospectus.
(xiii) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company against
payment therefor as described in the Registration Statement and Prospectus,
will be validly issued and will represent 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 Common
Securities is not subject to preemptive or other similar rights; and at the
Closing Time all of the issued and outstanding Common Securities of the Trust
will be directly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equitable right.
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(xiv) The Declaration has been duly authorized by the Company
and, at the Closing Time, will have been duly executed and delivered by the
Company and the Trustees, and assuming due authorization, execution and
delivery of the Declaration by the Institutional Trustee and the Delaware
Trustee, the Declaration will, at the Closing Time, be a legal, valid and
binding obligation of the Company and the Regular Trustees, enforceable against
the Company and the Regular Trustees in accordance with its terms, except to
the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, and will conform in all material respects to the description
thereof contained in the Prospectus.
(xv) Each of the Guarantee Agreements has been duly
authorized by the Company and, when validly executed and delivered by the
Company, and, in the case of the Preferred Securities Guarantee Agreement,
assuming due authorization, execution and delivery of the Preferred Securities
Guarantee by the Guarantee Trustee, will constitute a legal, 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 the
Bankruptcy Exceptions, and each of the Guarantees and the Guarantee Agreements
will conform in all material respects to the description thereof contained in
the Prospectus.
(xvi) The Securities have been duly authorized for issuance
and sale to the Underwriters and, when issued and delivered against payment
therefor as provided herein, will be validly issued and fully paid and
non-assessable and will conform in all material respects to the description
thereof contained in the Prospectus; the issuance of the Securities is not
subject to preemptive or other similar rights.
(xvii) The shares of Common Stock to be issued and sold by
the Company pursuant to the Purchase Contract Agreement (the "Shares") and the
preferred share purchase rights (the "Rights") to be issued with the Shares
have been duly and validly authorized and reserved for issuance; such Shares,
when issued and delivered in accordance with the provisions of the Purchase
Contract Agreement and the Pledge Agreement, will be duly authorized, validly
issued and fully paid and non-assessable and will conform in all material
respects to the description thereof contained in the Prospectus; upon issuance
of the Shares, the Rights will be duly authorized and validly paid and will
conform in all material respects to the description thereof contained in the
Prospectus; and the issuance of such Shares will not be subject to preemptive
or other similar rights.
(xviii) The Indenture has been duly authorized and qualified
under the 1939 Act and, at the Closing Time, will have been duly executed and
delivered and will constitute a legal, valid and binding agreement of the
Company, enforceable against
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the Company in accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions; the Indenture will conform
in all material respects to the description thereof contained in the
Prospectus.
(xix) The Junior Subordinated Debentures have been duly
authorized by the Company and, at the Closing Time, will have been duly
executed by the Company and, when authenticated in the manner provided for in
the Indenture and delivered against payment therefor as described in the
Prospectus, will constitute legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms except
to the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, and will be in the form contemplated by, and entitled to the
benefits of, the Indenture and will conform in all material respects to the
description thereof contained in the Prospectus.
(xx) Each of the Regular Trustees of the Trust is an employee
of the Company and has been duly authorized by the Company to execute and
deliver the Declaration.
(xxi) Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, note, lease, loan or credit
agreement or any other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which any of them may be bound, or to which
any of the property or assets of the Company or any of its subsidiaries is
subject, or in violation of any applicable law, rule or regulation or any
judgment, order or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or assets, which violation
or default would, singly or in the aggregate, have a Material Adverse Effect.
(xxii) The Trust is not in violation of the Declaration or
its certificate of trust filed with the State of Delaware on February 3, 1997
(the "Certificate of Trust"); none of the entry into the Purchase Contracts
underlying the Securities by the Company, the offer of the Securities as
contemplated herein and in the Prospectus, the issue of the Shares and Rights
and the sale of the Shares by the Company pursuant to the Purchase Contracts;
the execution, delivery and performance of this Agreement, the Pricing
Agreement, the Purchase Contracts, the Purchase Contract Agreement, the Pledge
Agreement, the Declaration, the Preferred Securities, the Common Securities,
the Indenture, the Junior Subordinated Debentures, the Guarantee Agreements and
the Guarantees, and the consummation of the transactions contemplated herein
and therein and compliance by the Offerors with its obligations hereunder and
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<PAGE> 12
thereunder, did or will result in a breach of any of the terms or provisions
of, or constitute a default under or require the consent of any party under the
Certificate of Trust of the Trust or the Articles of Incorporation or by-laws
of the Company and its subsidiaries, any contract, indenture, mortgage, note,
lease, agreement or other instrument to which either the Trust, the Company or
any of its subsidiaries is a party or by which any of them may be bound, any
applicable law, rule or regulation or any judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Trust, the Company or any of its subsidiaries or any of
their respective property or assets, or did or will result in the creation or
imposition of any lien on the properties or assets of the Trust, the Company or
any of its subsidiaries.
(xxiii) No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers, manufacturers
or contractors which might be expected to result in a Material Adverse Effect.
(xxiv) There is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body, domestic
or foreign, now pending or to the knowledge of the Company threatened against
or affecting the Trust, the Company or any of its subsidiaries which is
required to be disclosed in the Registration Statement and the Prospectus
(other than as stated therein), or which might reasonably be expected to result
in a Material Adverse Effect, or which might be reasonably expected to
materially and adversely affect the assets, properties or operations thereof or
the consummation of this Agreement, the Pricing Agreement, the Purchase
Contracts, the Purchase Contract Agreement, the Pledge Agreement, the Guarantee
Agreements, the Indenture or the transactions contemplated herein or therein.
The aggregate of all pending legal or governmental proceedings to which the
Trust, the Company or any subsidiary thereof is a party or of which any of
their respective properties or operations is the subject which are not
described in the Registration Statement and the Prospectus, including ordinary
routine litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.
(xxv) The Company and its subsidiaries have good and
marketable title to all material real and personal property owned by them, in
each case free and clear of all liens, encumbrances and defects except such as
are described in the Registration Statement or the Prospectus or such as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
its subsidiaries; and any material real property and buildings held under lease
by the Company and its subsidiaries
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<PAGE> 13
are held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not materially interfere with the use
made and proposed to be made of such property and buildings by the Company and
its subsidiaries; the pipeline, distribution main and underground gas storage
easements enjoyed by the Company or its subsidiaries are valid, subsisting and
enforceable easements with such exceptions as are not material and do not
materially interfere with the conduct of the business of the Company and its
subsidiaries; the Company and its subsidiaries possess all licenses,
franchises, permits, certificates, authorizations, approvals, consents and
orders of all governmental authorities or agencies which are necessary for the
ownership or lease of the material properties owned or leased by each of them
and for the operation of the business now operated by each of them with such
exceptions which, singly or in the aggregate, are not material and do not
materially interfere with the conduct of the business of the Company and its
subsidiaries, considered as one enterprise; all such licenses, franchises,
permits, certificates, orders, authorizations, approvals and consents are in
full force and effect and contain no unduly burdensome provisions that would
interfere with the conduct of the business of the Company and its subsidiaries,
considered as one enterprise and, except as otherwise set forth in the
Registration Statement or the Prospectus, there are no legal or governmental
proceedings pending or threatened that would result in a material modification,
suspension or revocation thereof.
(xxvi) No authorization, approval, consent, order,
registration or qualification of or with any court or governmental authority or
agency is required for the entry into the Purchase Contracts underlying the
Securities, in connection with the issuance and sale of the Common Securities,
the offering of the Securities and the issuance and sale of the Shares by the
Company pursuant to such Purchase Contracts, except such as have been obtained
and made under the federal securities laws and such as may be required under
state or foreign securities or Blue Sky laws.
(xxvii) This Agreement and the Pricing Agreement have been
duly authorized, executed and delivered by each of the Offerors.
(xxviii) None of the Trust or the Company or any of its
subsidiaries is an "investment company" or under the "control" of an
"investment company" as such terms are defined under the Investment Company Act
of 1940, as amended (the "1940 Act").
(xxix) The Company is presently exempt from the provisions of
the Public Utility Holding Company Act of 1935 (except Section 9 thereof) which
would otherwise require it to register thereunder.
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<PAGE> 14
(xxx) None of the Company, its subsidiaries or any of their
respective directors, officers or controlling persons, has taken, directly or
indirectly, any action resulting in a violation of Regulation M under the 1934
Act, or designed to cause or result in, or that has constituted or that
reasonably might be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities or the Common Stock.
(xxxi) No "forward looking statement" (as defined in Rule 175
under the 1933 Act) contained in the Registration Statement, any preliminary
prospectus or the Prospectus was made or reaffirmed without a reasonable basis
or was disclosed other than in good faith.
(b) Any certificate signed by any officer of the Company or a
Trustee of the Trust and delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company or
the Trust, as the case may be, to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the
Offerors agree to sell to each Underwriter, and each Underwriter severally and
not jointly, agrees to purchase from the Offerors, at the price per security
set forth in the Pricing Agreement, the number of Initial Securities set forth
in Schedule A hereto opposite the name of such Underwriter, plus any additional
number of Initial Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(1) If the Offerors have elected not to rely upon Rule 430A
of the 1933 Act Regulations, the initial public offering price per Security and
the purchase price per Security to be paid by the several Underwriters for the
Securities have each been determined and set forth in the Pricing Agreement,
dated the date hereof, and any necessary amendments to the Registration
Statement and the Prospectus will be filed before the Registration Statement
becomes effective.
(2) If the Offerors have elected to rely upon Rule 430A of
the 1933 Act Regulations, the purchase price per Security to be paid by the
several Underwriters shall be an amount equal to the initial public offering
price per Security, less an amount per Security to be determined by agreement
between the Underwriters and the Offerors. The initial public offering price
per Security shall be a fixed price to be determined by agreement between the
Underwriters and the Offerors. The initial
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<PAGE> 15
public offering price and the purchase price, when so determined, shall be set
forth in the Pricing Agreement. In the event that such prices have not been
agreed upon and the Pricing Agreement has not been executed and delivered by
all parties thereto by the close of business on the fourth business day
following the date of this Agreement, this Agreement shall terminate forthwith,
without liability of any party to any other party, unless otherwise agreed to
by the Offerors and the Underwriters.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Offerors hereby grant to the Underwriters, severally and not
jointly, the right to purchase at their election up to 345,000 Option
Securities at the price per share set forth in the Pricing Agreement. The
option hereby granted will expire automatically at the close of business on the
30th calendar day after (i) the later of the date the Registration Statement
and any Rule 462(b) Registration Statement becomes effective, if the Offerors
have elected not to rely upon Rule 430A under the 1933 Act Regulations, or (ii)
the Representation Date, if the Offerors have elected to rely upon Rule 430A
under the 1933 Act Regulations, and may be exercised in whole or in part from
time to time only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial Securities upon
notice by the Underwriters to the Offerors setting forth the aggregate number
of additional Optional Securities to be purchased and the time and date of
delivery for the related Option Securities. Any such time and date of delivery
(a "Date of Delivery") shall be determined by the Underwriters but shall not be
later than seven full business days after the exercise of such option, nor in
any event before the Closing Time, unless otherwise agreed upon by the
Underwriters and the Offerors. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, acting severally
and not jointly, will purchase from the Company the same percentage of the
total number of Option Securities as such Underwriter is purchasing of the
Initial Securities as set forth in Schedule A hereto (subject in each case to
such adjustments as the Representatives in their discretion shall make to
eliminate any fractional Option Securities).
(c) The Preferred Securities underlying the Securities will be
pledged with the Collateral Agent to secure the holders' obligations to
purchase Common Stock under the Purchase Contracts. Such pledge shall be
effected by the transfer to the Collateral Agent of the Preferred Securities to
be pledged at the Closing Time and appropriate Date of Delivery, if any, in
accordance with the Pledge Agreement.
(d) Delivery of certificates for the Initial Securities and the
Option Securities (if the option provided for in Section 2(b) hereof shall have
been exercised on or before the first business
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<PAGE> 16
day prior to the Closing Time) shall be made at the offices of the Underwriters
in New York, against the delivery to the Collateral Agent of the Preferred
Securities relating to such Securities by such Underwriters or on their behalf,
and payment of the purchase price for such Securities shall be made at the
offices of LeBoeuf, Lamb, Greene & MacRae, L.L.P, 125 West 55th Street, New
York, New York 10019 or at such other place as shall be agreed upon by the
Underwriters and the Offerors, at 10:00 a.m. (New York time) on the third
business day after the date the Registration Statement becomes effective (or,
if the Offerors have elected to rely upon Rule 430A, the third full business
day after execution of the Pricing Agreement (or, if pricing of the Securities
occurs after 4:30 p.m., Eastern time, on the fourth full business day
thereafter)), or such other time not later than ten business days after such
date as shall be agreed upon by the Underwriters and the Offerors (such time
and date of payment and delivery being referred to herein as the "Closing
Time"). Payment for the Securities purchased by the Underwriters shall be made
by wire transfer of immediately available funds, payable to the Company,
against delivery to the respective accounts of the Underwriters of the
Securities to be purchased by it. Delivery of, and payment for, the Securities
shall be made through the facilities of the Depository Trust Company. In
addition, if the Underwriters purchase any or all of the Option Securities,
payment of the purchase price and delivery of certificates for such Option
Securities shall be made at the offices of LeBoeuf, Lamb, Greene & MacRae,
L.L.P. set forth above, or at such other place as shall be agreed upon by the
Underwriters and the Offerors, on each Date of Delivery as specified in the
relevant notice from the Underwriters to the Offerors.
Certificates for the Initial Securities and the Option
Securities, if any, shall be in such denominations and registered in such names
as the Underwriters may request in writing at least two full business days
before the Closing Time or any Date of Delivery, as the case may be. Merrill
Lynch, individually and not as representative of the Underwriters, may (but not
shall be obligated to) make payment of the purchase price for the Securities,
if any, to be purchased by any Underwriter whose funds have not been received
by the Closing Time, or the Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations hereunder. The
certificates for the Initial Securities and the Option Securities, if any, will
be made available for examination by the Underwriters no later than 10:00 a.m.
(New York City time) on the last business day prior to the Closing Time or the
Date of Delivery, as the case may be.
(e) If settlement for the Option Securities occurs after the
Closing Time, the Offerors will deliver to the Underwriters on the relevant
Date of Delivery, and the obligations of the Underwriters to purchase the
Option Securities shall be
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<PAGE> 17
conditioned upon the receipt of, supplemental opinions, certificates and
letters confirming as of such date the opinions, certificates and letters
delivered at the Closing Time pursuant to Section 5(k) hereof.
SECTION 3. Covenants of the Offerors. The Offerors agree with each
Underwriter as follows:
(a) Promptly following the execution of this Agreement, the Offerors
will cause the Prospectus, including as a part thereof a prospectus supplement
relating to the Securities to be filed with the Commission pursuant to Rule 424
of the 1933 Act Regulations and the Offerors will promptly advise the
Underwriters when such filing has been made. Prior to the filing, the Offerors
will cooperate with the Underwriters in the preparation of such prospectus
supplement to assure that the Underwriters have no reasonable objection to the
form or content thereof when filed or mailed.
(b) The Offerors will comply with the requirements of Rule 430A of
the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations if and as
applicable, and will notify the Underwriters immediately, and confirm the
notice in writing, (i) of the effectiveness of any post-effective amendment to
the Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional information,
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose and (v) of the issuance by any state securities
commission or other regulatory authority of any order suspending the
qualification or the exemption from qualification of the Securities or the
Shares under state securities or Blue Sky laws or the initiation or threatening
of any proceeding for such purpose. The Offerors will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(c) The Offerors will give the Underwriters notice of its intention
to file or prepare any amendment to the Registration Statement (including any
post-effective amendment and any filing under Rule 462(b) of the 1933 Act
Regulations) any Term Sheet or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise; will furnish the Underwriters with copies of any such Rule 462(b)
Registration Statement, Term Sheet, amendment, supplement or revision a
reasonable amount of time prior to such proposed filing or use, as the case may
be; and will not file any such Rule 462(b) Registration Statement,
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<PAGE> 18
Term Sheet, amendment, supplement or revision to which the Underwriters or
counsel for the Underwriters shall object.
(d) The Company will deliver to Merrill Lynch and counsel for the
Underwriters, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to Merrill Lynch,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the
Underwriters. If applicable, the copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) The Company will deliver to each Underwriter, without charge, as
many copies of each preliminary prospectus as such Underwriter may reasonably
request, and the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each Underwriter,
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. If applicable, the Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(f) The Offerors will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Registration Statement and the Prospectus. If at any time
when the Prospectus is required by the 1933 Act or the 1934 Act to be delivered
in connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the Underwriters or for the Offerors, to amend the Registration Statement in
order that the Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or to amend or
supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or
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<PAGE> 19
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Offerors will promptly prepare
and file with the Commission, subject to Section 3(c), such amendment or
supplement as may be necessary to correct such statement or omission or to make
the Registration Statement or the Prospectus comply with such requirements, and
the Offerors will furnish to the Underwriters, without charge, such number of
copies of such amendment or supplement as the Underwriters may reasonably
request.
(g) The Offerors will use their best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions (domestic or
foreign) as Merrill Lynch may designate; provided, however, that the Company
shall not be obligated to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified or subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the Offerors
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for so long as may be
required in connection with distribution of the Securities and the Shares.
(h) The Company will make generally available to its securityholders
as soon as practicable, but not later than 45 days (or 90 days, in the case of
a period that is also the Company's fiscal year) after the close of the period
covered thereby, an earnings statement of the Company and its subsidiaries (in
form complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering a twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the "effective date" (as defined in
said Rule 158) of the Registration Statement.
(i) The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectus under "Use of
Proceeds".
(j) If, at the time that the Registration Statement became (or in the
case of a post-effective amendment becomes) effective, any information shall
have been omitted therefrom in reliance upon Rule 430A or Rule 434 of the 1933
Act Regulations, then immediately following the execution of the Pricing
Agreement, the Offerors will prepare, and file or transmit for filing with the
Commission in accordance with such Rule 430A or Rule 434 and Rule 424(b) of the
1933 Act Regulations, copies of an amended Prospectus, or Term Sheet, or, if
required by such Rule 430A, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted.
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<PAGE> 20
(k) If the Offerors elect to rely upon Rule 462(b), the Offerors
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 of the 1933 Act Regulations by the earlier of (i) 10:00 p.m. Eastern time
on the date of the Pricing Agreement and (ii) the time confirmations are sent
or given, as specified by Rule 462(b)(2).
(l) The Offerors, during the period when the Prospectus is required
to be delivered under the 1933 Act, will file all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.
(m) The Offerors will use their best efforts to effect the listing of
the Income PRIDES and the Shares on the New York Stock Exchange and to cause
the Securities to be registered under the 1934 Act.
(n) During a period of 90 days from the date of the Pricing
Agreement, neither the Trust nor the Company will, without the prior written
consent of Merrill Lynch, directly or indirectly, sell, offer to sell, grant
any option for the sale of, or otherwise dispose of, or enter into any
agreement to sell, any Securities, Purchase Contracts, Preferred Securities or
Common Stock or any security convertible into or exchangeable or exercisable
for Securities, Purchase Contracts, Preferred Securities, Common Stock or the
Junior Subordinated Debentures, or any equity securities substantially similar
to the Securities, Preferred Securities, Purchase Contracts or Common Stock or
any debt securities substantially similar to the Junior Subordinated
Debentures; provided, however, that such restriction shall not affect the
ability of the Offerors to take any such action (i) in connection with any
employee benefit, dividend reinvestment or stock purchase plan of the Company
or its subsidiaries or (ii) in connection with the offering of the Securities,
including the Preferred Securities, and the Junior Subordinated Debentures
issued pursuant to this Agreement.
(o) During a period of three years from the Closing Time, to make
generally available to the Underwriters copies of all reports and other
communications (financial or other) mailed to stockholders, and to deliver to
the Underwriters promptly after they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed;
and shall furnish such additional information concerning the business and
financial condition of the Company as the Underwriters may from time to time
reasonably request (such financial statements to be on a consolidated basis to
the extent the accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission).
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<PAGE> 21
(p) The Company will reserve and keep available at all times, free
of preemptive or other similar rights and liens and adverse claims, sufficient
shares of Common Stock to satisfy any obligations to issue Shares upon
settlement of the Purchase Contracts and shall take all actions necessary to
keep effective the Registration Statement with respect to the Shares.
(q) None of the Company, its subsidiaries or any of their
respective directors, officers or controlling persons, will take, directly or
indirectly, any action resulting in a violation of Regulation M under the 1934
Act, or designed to cause or result in, or that reasonably might be expected to
constitute, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities or the Common
Stock.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, the
Pricing Agreement, the Purchase Contracts, the Purchase Contract Agreement and
the Pledge Agreement, including, without limitation, expenses related to the
following, if incurred: (i) the preparation, delivery, printing and filing of
the Registration Statement and Prospectus as originally filed (including
financial statements and exhibits) and of each amendment thereto; (ii) the
printing and delivery to the Underwriters of this Agreement, the Pricing
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale and delivery of the
Securities; (iii) the preparation, issuance and delivery of the certificates
for the Securities and the Shares; (iv) the fees and disbursements of the
Company's counsel, accountants and other advisors or agents (including the
transfer agents and registrars), as well as fees and disbursements of the
Trustees, the Purchase Contract Agent, the Collateral Agent and any Depositary,
and their respective counsel (except as provided for in the Prospectus); (v)
the qualification of the Securities and the Shares under securities laws in
accordance with the provisions of Section 3(g), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey and any Legal
Investment Survey; (vi) the printing and delivery to the Underwriters of copies
of the Registration Statement as originally filed and of each amendment
thereto, of each preliminary prospectus, any Term Sheet and of the Prospectus
and any amendments or supplements thereto; (vii) the printing and delivery to
the Underwriters of copies of the Blue Sky Survey and any Legal Investment
Survey; (viii) any fees payable in connection with the rating of the Securities
by nationally recognized statistical rating organizations; (ix) the filing fees
incident to, and the fees and disbursements of counsel to the Underwriters in
connection with, the review, if any, by the National Association of Securities
Dealers, Inc. (the "NASD") of the terms of the sale of the Securities; (x) any
fees payable to
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<PAGE> 22
the Commission; and (xi) the fees and expenses incurred in connection with the
listing of the Income PRIDES and the Shares on the New York Stock Exchange.
If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of LeBoeuf, Lamb,
Greene & MacRae, L.L.P., counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations
of the Underwriters to purchase and pay for the Securities pursuant to this
Agreement are subject to the accuracy of the representations and warranties of
the Offerors herein contained or in certificates of any officer of the
Company or any subsidiary or the trustees of the Trust delivered pursuant to
the provisions hereof, to the performance by the Offerors of their obligations
hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, shall have become effective under the 1933 Act not
later than 5:30 p.m., New York City time, on the date hereof, and on the date
hereof and at the Closing Time and any Date of Delivery, no stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the satisfaction of
counsel to the Underwriters. A prospectus containing information relating to
the description of the Securities, the specific method of distribution and
similar matters shall have been filed with the Commission in accordance with
Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any required
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A), or, if
the Company has elected to rely upon Rule 434 of the 1933 Act Regulations, a
Term Sheet including the Rule 434 Information shall have been filed with the
Commission in accordance with Rule 424(b)(7).
(b) At the Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of the Closing Time, of
Daniel L. Schiffer, Esq., Senior Vice President, General Counsel and Secretary
of the Company, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of the State of Michigan.
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<PAGE> 23
(ii) The Company has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required.
(iv) The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus (except
for subsequent issuances, if any, pursuant to employee benefit plan or
dividend reinvestment and stock purchase plan transactions), and the
shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable.
(v) The Rights to be issued with the Shares
have been duly authorized and, upon issuance of such Shares, will be
validly issued and conform in all material respects to the description
thereof in the Prospectus.
(vi) Each subsidiary of the Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as
described in the Prospectus, and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect; all of the issued
and outstanding capital stock of each such subsidiary of the Company
has been duly authorized and validly issued, is fully paid and
non-assessable and all such shares are owned by the Company, directly
or through its subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(vii) The Trust is not required to be qualified
and in good standing as a foreign company in Michigan, except to the
extent that the failure to so qualify or be in good standing would not
have a Material Adverse Effect on the Trust; and the Trust is not a
party to or otherwise bound by any agreement other than those
described in the Prospectus.
(viii) The Declaration has been duly authorized,
executed and delivered by the Company and the Trustees and is a legal,
valid and binding obligation of the Company, enforceable against the
Company and each of the Regular
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Trustees in accordance with its terms, except as enforcement thereof
may be limited by the Bankruptcy Exceptions; and the Declaration has
been duly qualified under the 1939 Act.
(ix) All legally required proceedings in
connection with the authorization, issuance and validity of the
Securities and the sale of the Securities in accordance with this
Agreement (other than the filing of post-issuance reports, the non-
filing of which would not render the Securities invalid) have been
taken and all legally required orders, consents or other
authorizations or approvals of any other public boards or bodies in
connection with the authorization, issuance and validity of the
Securities and the sale of the Securities in accordance with this
Agreement (other than in connection with or in compliance with the
provisions of the securities or Blue Sky laws of any jurisdictions, as
to which no opinion need be expressed) have been obtained and are in
full force and effect.
(x) The Registration Statement is effective
under the 1933 Act and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has
been issued under the 1933 Act, and no proceedings therefor have been
initiated or threatened by the Commission.
(xi) The Registration Statement as of its
effective date and the Prospectus and each amendment or supplement
thereto as of its issue date (in each case, other than the financial
statements and the notes thereto, the financial schedules, and any
other financial data included or incorporated by reference therein, as
to which such counsel need express no belief), complied as to form in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations; and the Declaration, the Indenture, the
Preferred Securities Guarantee Agreement and the Statements of
Eligibility on Forms T-1 with respect to each of the Institutional
Trustee, the Debt Trustee, and the Guarantee Trustee filed with the
Commission as part of the Registration Statement complied as to form
in all respects with the requirements of the 1939 Act and the 1939 Act
Regulations.
(xii) Each of the documents incorporated by
reference in the Registration Statement or the Prospectus at the time
they were filed or last amended (other than the financial statements
and the notes thereto, the financial schedules, and any other
financial data included or incorporated by reference therein, as to
which such counsel need express no belief), complied as to form in all
material respects with the requirements of the 1934 Act and the 1934
Act Regulations, as applicable; and such counsel has no reason to
believe that any of such documents, when such
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<PAGE> 25
documents became effective or were so filed, as the case may be,
contained, in the case of a registration statement which became
effective under the 1933 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, and, in the
case of other documents which were filed under the 1934 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 not
misleading.
(xiii) MCN and each of the MCN Trusts meet the
registrant requirements for use of Form S-3 under the 1933 Act
Regulations.
(xiv) The Securities have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement
and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth in the
Pricing Agreement, will be validly issued and fully paid and
non-assessable; the Common Stock and the Securities are each
registered under the 1934 Act, and the Income PRIDES issuable at the
Closing Time and the Shares issuable by the Company pursuant to the
Purchase Contracts have been authorized for listing on the New York
Stock Exchange, upon official notice of issuance.
(xv) The Shares subject to the Purchase
Contract Agreement have been duly and validly authorized and reserved
for issuance and, when issued and delivered by the Company in
accordance with the provisions of the Purchase Contract Agreement, the
Purchase Contracts and the Pledge Agreement, will be fully paid and
non-assessable; the issuance of such Shares will not be subject to
preemptive or other similar rights arising by law or, to the best of
such counsel's knowledge, otherwise.
(xvi) The issuance of the Securities is not
subject to preemptive or other similar rights arising by law or, to
the best of such counsel's knowledge, otherwise.
(xvii) All of the issued and outstanding Common
Securities of the Trust are directly owned by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equitable right.
(xviii) This Agreement and the Pricing Agreement
have been duly authorized, executed and delivered by each of the
Company and the Trust.
(xix) The Purchase Contract Agreement has been
duly authorized by the Company and, assuming due authorization,
execution and delivery of the Purchase
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<PAGE> 26
Contract Agreement by the Purchase Contract Agent, constitutes a
legal, 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 the Bankruptcy Exceptions.
(xx) The Pledge Agreement has been duly
authorized by the Company and, assuming due authorization, execution
and delivery of the Pledge Agreement by the Collateral Agent and the
Purchase Contract Agent, constitutes a legal, 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 the Bankruptcy Exceptions.
(xxi) Each of the Guarantee Agreements has been
duly authorized, executed and delivered by the Company; the Preferred
Securities Guarantee Agreement, assuming it is duly authorized,
executed, and delivered by the Guarantee Trustee, constitutes a legal,
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 Bankruptcy Exceptions; and the
Preferred Securities Guarantee Agreement and the Declaration have been
duly qualified under the 1939 Act.
(xxii) The Indenture has been duly executed and
delivered by the Company and, assuming due authorization, execution,
and delivery thereof by the Debt Trustee, is a legal, 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 the Bankruptcy Exceptions; and the Indenture
has been duly qualified under the 1939 Act.
(xxiii) The Subordinated Debt Securities are in
the form contemplated by the Indenture, have been duly authorized,
executed and delivered by the Company and, when authenticated by the
Debt Trustee in the manner provided for in the Indenture and delivered
against payment therefor by the Trust, will constitute legal, valid
and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
(xxiv) The entry into the Purchase Contracts
underlying the Securities; the issuance and sale of the Securities by
the Offerors; the issuance and sale of the Shares by the Company
pursuant to the Purchase Contracts; the execution, delivery and
performance by the Company of this Agreement, the Pricing Agreement,
the Purchase Contracts, the Purchase Contract Agreement, the Pledge
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<PAGE> 27
Agreement, the Declaration, the Securities, the Common Securities, the
Indenture, the Junior Subordinated Debentures, the Guarantee
Agreements and the Guarantees; the consummation of the transactions
contemplated herein and therein; and the compliance by each of the
Offerors with their respective obligations hereunder and thereunder do
not and will not conflict with, result in a breach of, or constitute a
default under or require the consent of any party under the
Certificate of Trust of the Trust or the Articles of Incorporation or
by-laws of the Company or any of its subsidiaries, or any contract,
indenture, mortgage, agreement, note, lease or other instrument to
which the Trust, the Company or any of its subsidiaries is a party or
by which any of them may be bound, or any applicable law, rule or
regulation, or any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Trust, the Company or any of its subsidiaries or
any of their respective properties or assets or did or will in the
creation or imposition of any lien on the properties or assets of the
Trust, the Company or any of its subsidiaries.
(xxv) All conditions precedent provided for in
the Purchase Contract Agreement relating to the authentication and
delivery of the Security Certificates have been complied with and the
Company is duly entitled to the authentication and delivery of the
Security Certificates in accordance with the terms of the Purchase
Contract Agreement; the Security Certificates are in a form
contemplated by the Purchase Contract Agreement and comply with all
applicable statutory requirements and with the requirements of the New
York Stock Exchange.
(xxvi) To the best of such counsel's knowledge,
there are no actions, suits or proceedings before or by any court or
governmental agency or body, domestic or foreign, pending or
threatened which are required to be disclosed in the Registration
Statement or the Prospectus, other than those disclosed therein, and
all pending legal or governmental proceedings to which the Company or
any of its subsidiaries is a party or to which any of their property
is subject which are not described in the Registration Statement and
the Prospectus, including ordinary routine litigation incidental to
the business, are, considered in the aggregate, not material.
(xxvii) The information in the Prospectus under
the captions "MCN Energy Group Inc.," "MCN Financing III," "Use of
Proceeds", "Capitalization," "Description of the FELINE PRIDES,"
"Description of the Purchase Contracts," "Certain Provisions of the
Purchase Contract Agreement and the Pledge Agreement," "Description of
the Trust Preferred Securities," "Description of the Guarantee,"
"Description of the Junior
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<PAGE> 28
Subordinated Debentures," "Effects of Obligations Under the Junior
Subordinated Debentures and the Guarantee," "The MCN Trusts,"
"Description of MCN Debt Securities," "Particular Terms of the
Subordinated Debt Securities," "Description of MCN Capital Stock,"
"Description of MCN Trust Preferred Securities," "Description of the
Preferred Securities Guarantees," "Effects of Obligations Under the
Subordinated Debt Securities and the Guarantee" and "Description of
Stock Purchase Contracts and Stock Units", to the extent that they
involve matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by such counsel
and is correct in all material respects.
(xxviii) To the best of such counsel's knowledge
and information, there are no contracts, indentures, mortgages,
agreements, notes, leases or other instruments required to be
described or referred to or incorporated by reference in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to or incorporated by reference therein or
filed as exhibits thereto; the descriptions thereof or references
thereto are true and correct, and no default exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
agreement, note, lease or other instrument so described, referred to,
filed or incorporated by reference.
(xxix) No authorization, approval, consent,
order, registration or qualification of or with any court or federal
or state governmental authority or agency is required for the issuance
and sale of the Securities by the Offerors to the Underwriters or the
performance by the Trust and the Company of their respective
obligations in this Agreement, the Pricing Agreement, the Purchase
Contract Agreement, the Pledge Agreement, the Indenture, the Junior
Subordinated Debentures, the Preferred Securities Guarantee Agreement,
the Preferred Securities Guarantee, the Declaration and the Securities
except such as has been obtained and made under the federal securities
laws or such as may be required under state or foreign securities or
Blue Sky laws.
(xxx) The Company and its subsidiaries possess
all licenses, franchises, permits, certificates, authorizations,
approvals, consents and orders of all governmental authorities or
agencies necessary for the ownership or lease of the material
properties owned or leased by each of them and for the operation of
the business carried on by each of them as described in the
Registration Statement and the Prospectus with such exceptions as are
not material and do not materially interfere with the conduct of
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<PAGE> 29
the business of the Company and its subsidiaries, considered as one
enterprise; all such licenses, franchises, permits, certificates,
authorizations, approvals, consents and orders are in full force and
effect and contain no unduly burdensome provisions that would
interfere with the conduct of the business of the Company and its
subsidiaries, considered as one enterprise and, except as otherwise
set forth in the Registration Statement or the Prospectus, there are
no legal or governmental proceedings pending or threatened that would
result in a material modification, suspension or revocation thereof.
(xxxi) None of the Trust or the Company or any of
its subsidiaries is an "investment company" or under the "control" of
an "investment company" as such terms are defined in the 1940 Act.
(xxxii) The Company is presently exempt from the
provisions of the Public Utility Holding Company Act of 1935 (except
Section 9 thereof) which would otherwise require it to register
thereunder.
Moreover, such counsel shall confirm that nothing has come to such
counsel's attention that would lead such counsel to believe that the
Registration Statement, including any information provided pursuant to
Rule 430A or Rule 434 (except for financial statements and the notes
thereto, the financial schedules and any other financial data included
or incorporated by reference therein, as to which counsel need express
no opinion), at the time it became effective or at the Representation
Date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus
(except for financial statements and the notes thereto, the financial
schedules, and any other financial data included or incorporated by
reference therein, as to which counsel need express no opinion), at
the Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the Company
for use in connection with the offering of the Securities which
differs from the Prospectus on file at the Commission at the time the
Registration Statement became effective, in which case at the time it
is first provided to the Underwriters for such use) or at the Closing
Time, included (or includes) an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
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
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Delaware law, upon the opinion of Skadden, Arps, Slate, Meagher & Flom, special
Delaware counsel to the Offerors, in which case the opinion shall state that
such counsel believes that you and such counsel are entitled to so rely.
(2) The favorable opinion, dated as of the Closing Time, of
Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Offerors, in
form and substance satisfactory to counsel for the Underwriters and subject to
the qualifications and assumptions stated therein, to the effect that:
(i) The Registration Statement, including any
Rule 462(b) Registration Statement, is effective under the 1933 Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings therefor
initiated, to the best of such counsel's knowledge, or threatened by
the Commission.
(ii) The Registration Statement, including any
Rule 462(b) Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial statements
and the notes thereto, the financial schedules and any other financial
data included or incorporated by reference therein, or the exhibits to
the Registration Statement, including any Form T-1, as to which no
opinion need be rendered), as of their respective effective or issue
dates, or when amended, as appropriate, complied as to form in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations.
(iii) The statements in the Prospectus under the
captions "MCN Financing III," "Description of the FELINE PRIDES,"
"Description of the Purchase Contracts," "Certain Provisions of the
Purchase Contract Agreement and the Pledge Agreement," "Description of
the Trust Preferred Securities," "Description of the Guarantee,"
"Description of the Junior Subordinated Debentures," "Effect of
Obligations Under the Junior Subordinated Debentures and the
Guarantee," "The MCN Trusts," "Description of MCN Debt Securities"
(except under the second and third paragraphs under the subsection
"Book-Entry Debt Securities"), "Particular Terms of the Subordinated
Debt Securities," "Description of the MCN Trust Preferred Securities,"
"Effect of Obligations under the Subordinated Debt Securities and the
Guarantee" and "Description of Stock Purchase Contracts and Stock
Purchase Units", to the extent that they involve matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by such counsel and is correct in all
material respects.
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(iv) Assuming that the Purchase Contract
Agreement, the Purchase Contracts underlying the Securities being
delivered at the Closing Time and at any Date of Delivery, and the
Pledge Agreement have been duly authorized, executed and delivered by
the Company under Michigan law, and subject to the enforceability of
the choice of law provisions thereof, each is a valid and legally
binding agreement of the Company enforceable against the Company in
accordance with its terms, except as may be limited by 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. Section Section 101-1330,
as amended) should not substantively limit the provisions of Sections
3.15 and 5.8 of the Purchase Contract Agreement and Section 4.3 of the
Pledge Agreement that require termination of the Purchase Contracts
and release of the Collateral Agent's security interest in the
Preferred Securities or the Treasury Securities; provided, however,
that procedural restrictions respecting relief from the automatic stay
under Section 362 of the Code may affect the timing of the exercise of
such rights and remedies.
(v) When the Securities are issued in
accordance with the terms of the Purchase Contract Agreement and
delivered against payment therefor, the Securities will entitle the
holders thereof to the rights specified in the Purchase Contract
Agreement.
(vi) For purposes of the opinions expressed
therein, such counsel has assumed that (1) the Pledge Agreement has
been duly authorized, executed and delivered by the Purchase Contract
Agent on behalf of each of the holders of the Securities from time to
time, (2) the Purchase Contract Agent is duly incorporated and validly
existing under the laws of the state of its incorporation, (3) the
Purchase Contract Agent and each of the holders of the Securities has
full power, authority and legal right (including, without limitation,
any legal right dependent upon there being no necessary governmental
approvals or filings and no conflict with laws, governing documents or
contracts) to make and perform its obligations under the Pledge
Agreement, (4) the Pledge Agreement is the legal, valid, binding and
enforceable obligation of the Purchase Contract Agent on behalf of
each of the holders of the Securities from time to time, and (5) the
Purchase Contract Agent and each holder of Securities has sufficient
rights in the Preferred Securities or the Treasury Securities, as the
case may be, for the security interest of the Collateral Agent for the
benefit of the Company to attach.
For purposes of such counsel's opinion: (i) "UCC" means the
Uniform Commercial Code as in effect on the date
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<PAGE> 32
thereof in the State of New York; (ii) "Federal Book-Entry Regulations" means
the United States Department of Treasury regulations governing the transfer and
pledge of marketable Treasury Securities maintained in the form of entries in
the records of the Federal Reserve Banks and set forth in 61 Fed. Reg. 43,626
(1996) (to be codified at 31 C.F.R. Part 357), including the 1994 Official Text
of the Uniform Commercial Code, Revised Article 8, Investment Securities (with
Conforming and Miscellaneous Amendments to Articles 1, 3, 4, 5, 9 and 10)
adopted by the American Law Institute and National Conference of Commissioners
On Uniform State Laws and approved by the American Bar Association on February
14, 1995, which is incorporated by reference pursuant to 61 Fed. Reg. 43,626
(1996) (to be codified at 31 C.F.R. Section 357.2; (iii) "Securities
Intermediary" means The Chase Manhattan Bank acting solely in its capacity as a
"securities intermediary" as defined in the Federal Book-Entry Regulations;
(iv) "Security Entitlements" means "security entitlements" as defined in the
Federal Book-Entry Regulations; and (v) "Collateral Account" means account
number MB9198919 maintained by the Securities Intermediary in the name "The
First National Bank of Chicago as Purchase Contract Agent on behalf of the
holders of certain securities of MCN Corporation, subject to the security
interest of The Chase Manhattan Bank as Collateral Agent for the benefit of MCN
Corporation as pledgee" pursuant to the Pledge Agreement, dated as of March 25,
1997, among the Securities Intermediary, the Purchase Contract Agent and the
Company (the "Pledge Agreement") and (vi) "Financial Intermediary" means The
Chase Manhattan Bank acting solely in its capacity as a "financial
intermediary" as defined in Section 8-313(4) of the UCC.
(A) The "transfer" of the Preferred Securities together
with the Pledge Agreement will be effective to create in favor of the
Collateral Agent for the benefit of the Company a valid and perfected security
interest in the Preferred Securities to secure the obligations of the holders
under the Purchase Contracts. Transfer of the Preferred Securities will occur
upon the latest of (a) the delivery of the Preferred Securities to the
Financial Intermediary indorsed to the Financial Intermediary or in blank, (b)
the sending of a confirmation by the Financial Intermediary of the purchase by
the Collateral Agent for the benefit of the Company of such Preferred
Securities and (c) the identification by book-entry of the Preferred Securities
to the Collateral Account.
(B) Such counsel notes that although the Federal
Book-Entry Regulations contain express provisions identifying the law governing
perfection and priority of security interests in security entitlements, they do
not contain express provisions identifying the law governing validity and
attachment of such security interests. Such counsel further notes that the
parties have chosen the laws of the State of New York to govern the Pledge
Agreement and that the UCC does not contain any provisions
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<PAGE> 33
with respect to the creation of a security interest in collateral constituting
a "security entitlement." The UCC, however, does contain provisions for
creation of a security interest in collateral constituting either a "general
intangible" or a "security" (each as defined in the UCC). If and to the extent
(i) the Federal Book-entry Regulations do not preempt the choice of New York
law with respect to the validity and attachment of the security interest in the
Treasury Security Entitlements (as defined herein), (ii) under New York law a
security interest in a "security entitlement" with respect to a book-entry
security issued by the U.S. Treasury would be created in the same manner as a
security interest in a "general intangible" (as defined in the UCC), such
counsel is of the opinion that the provisions of the Pledge Agreement are
effective to create a valid security interest in favor of the Company, to
secure the obligations of the holders of the Growth PRIDES under the Purchase
Contracts comprising a part of such Growth PRIDES, in each such holder's rights
in all "security entitlements" with respect to book- entry securities issued by
the United States Treasury and credited to the Collateral Account (such
security entitlements, the "Treasury Security Entitlements"). Alternatively,
if and to the extent (i) the Federal Book-Entry Regulations do not preempt the
choice of New York law with respect to the validity and attachment of the
security interest in the Treasury Security Entitlements, and (ii) under New
York law a security interest in a "security entitlement" with respect to a
book-entry security issued by the U.S. Treasury would be created in the same
manner as a security interest in a "security" (as defined in the UCC), such
counsel is of the opinion that the provisions of the Pledge Agreement together
with the "transfer" (within the meaning of Section 8-313 of the UCC) of the
Treasury Security Entitlements to the Collateral Agent will be effective to
create a valid security interest in favor of the Collateral Agent for the
benefit of the Company, to secure the obligations of the holders of the Growth
PRIDES under the Purchase Contracts, in such holders' rights in all Treasury
Security Entitlements. Assuming that the Securities Intermediary satisfies the
requirements of Section 8-313(d)(iii) of the UCC (as to which such counsel
expresses no opinion), "transfer" of the Treasury Securities Entitlements will
occur upon the later to occur of (1) the sending of a confirmation by the
Securities Intermediary to the Collateral Agent for the benefit of the Company
of the purchase by the Collateral Agent of the Treasury Securities Entitlements
and (2) the identification by book-entry by the Securities Intermediary of the
Treasury Securities Entitlements as belonging to the Collateral Agent for the
benefit of the Company.
(C) Upon the execution and delivery of the Pledge
Agreement and the establishment of the Collateral Account in accordance with
the terms of the Pledge Agreement, the security interest of the Company in the
Treasury Securities Entitlements will be perfected under the Federal Book-Entry
Regulations.
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<PAGE> 34
(vii) Assuming the Preferred Securities
Guarantee Agreement has been duly authorized, executed and delivered
by the Company under Michigan law, it is a legal, valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(viii) Assuming the Indenture has been duly
authorized, executed and delivered by the Company under Michigan law
and, assuming due authorization, execution, and delivery thereof by
the Debt Trustee, it is a legal, 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 the
Bankruptcy Exceptions; and the Indenture, Declaration and Preferred
Securities Agreement have been duly qualified under the 1939 Act.
(ix) The Securities, the Common Securities, the
Junior Subordinated Debentures, each of the Guarantees, the
Declaration and each of the Guarantee Agreements conform in all
material respects to the description thereof contained in the
Prospectus.
(x) No authorization, approval, consent,
order, registration or qualification of or with any court or federal
or New York state governmental authority or agency is required for the
entry into the Purchase Contracts underlying the Securities, the
issuance and sale of the Securities by the Offerors to the
Underwriters, or the issuance and sale of the Shares by the Company
pursuant to such Purchase Contracts, or the performance by the Company
and the Trust of their respective obligations under this Agreement,
the Pricing Agreement, the Purchase Contracts, the Purchase Contract
Agreement, the Pledge Agreement, the Indenture, the Junior
Subordinated Debentures, the Preferred Securities Guarantee Agreement,
the Preferred Securities Guarantee, the Declaration and the
Securities, except such as has been obtained and made under the
federal securities laws or such as may be required under state or
foreign securities or Blue Sky laws.
(xi) The issuance and sale of the Securities do
not contravene the Commodity Exchange Act or the regulations of the
Commodity Futures Trading Commission.
Moreover, such counsel shall confirm that nothing has come to such
counsel's attention that would lead such counsel to believe that the
Registration Statement, including any information provided pursuant to
Rule 430A or Rule 434 (except for financial statements and the notes
thereto, the financial schedules, and any other financial data
included
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<PAGE> 35
or incorporated by reference therein, as to which counsel need express
no opinion), at the time it became effective or at the Representation
Date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus
(except for financial statements and the notes thereto, the financial
schedules, and any other financial data included or incorporated by
reference therein, as to which counsel need express no opinion), at
the Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the Company
for use in connection with the offering of the Securities which
differs from the Prospectus on file at the Commission at the time the
Registration Statement became effective, in which case at the time it
is first provided to the Underwriters for such use) or at the Closing
Time, included (or includes) an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
(3) The favorable opinion, dated as of the Closing Time, of
Skadden, Arps, Slate, Meagher & Flom (Delaware), special Delaware counsel to
the Offerors, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Trust has been duly created and is
validly existing in good standing as a business trust under the
Delaware Act, and has the business trust power and authority to
conduct its business as described in the Registration Statement and
the Prospectus.
(ii) Assuming that the Declaration has been
duly authorized, executed and delivered by the Company, and assuming
the due authorization, execution and delivery of the Declaration by
Wilmington Trust Company and the Regular Trustees, the Declaration
constitutes a legal, valid and binding obligation of the Company and
is enforceable against the Company in accordance with its terms,
except that to the extent enforceability thereof may be limited by the
Bankruptcy Exceptions.
(iii) Under the Delaware Act and the
Declaration, the Trust has the power and authority to (i) execute and
deliver, and to perform its obligations under, this Agreement and the
Pricing Agreement and (ii) issue, and perform its obligations under,
the Trust Securities.
(iv) The execution and delivery by the Trust of
this Agreement and the Pricing Agreement, and the performance by the
Trust of its obligations hereunder and
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under the Pricing Agreement, have been duly authorized by all
necessary action on the part of the Trust.
(v) The Preferred Securities have been duly
authorized by the Declaration and, when executed by the trust and the
Institutional Trustee in accordance with the Declaration and delivered
against payment therefor in accordance with the terms of this
Agreement, will be validly issued and, subject to qualifications
hereinafter expressed in subparagraph (vi), fully paid and
nonassessable undivided beneficial interests in the assets of the
Trust; the holders of the Preferred Securities, as beneficial owners
of the Trust, 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;
said counsel may note that the holders of the Preferred Securities may
be obligated to make payments as set forth in the Declaration.
(vi) The Common Securities have been duly
authorized by the Declaration and, when issued, executed and
authenticated in accordance with the terms of the Declaration, and
delivered and paid for as set forth in the Registration Statement,
will be validly issued, undivided beneficial interests in the assets
of the Trust.
(vii) Under the Delaware Act and the
Declaration, the issuance of the Trust Securities is not subject to
preemptive or other similar rights.
(viii) None of the execution and delivery by the
Trust of, or the performance by the Trust of its obligations under,
this Agreement, the issuance and sale of the Preferred Securities by
the Trust in accordance with the terms of this Agreement and the
Pricing Agreement, or the consummation of the other transactions
contemplated thereby, will contravene any provisions of applicable
Delaware law or administrative regulations or the Certificate of Trust
or the Declaration.
(ix) This Agreement and the Pricing Agreement
have been duly authorized, executed and delivered by the Trust.
(x) No authorization, approval, consent,
order, registration or qualification of or with any Delaware state
governmental authority or agency is required for the entry into the
Purchase Contracts underlying the Securities, the issuance and sale of
the Securities -by the Offerors to the Underwriters, or the issuance
and sale of the Shares by the Company pursuant to such Purchase
Contracts, or the performance by the Company and the Trust of their
respective obligations under this Agreement, the Pricing Agreement,
the
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Purchase Contracts, the Purchase Contract Agreement, the Pledge
Agreement, the Indenture, the Junior Subordinated Debentures, the
Preferred Securities Guarantee Agreement, the Preferred Securities
Guarantee, the Declaration and the Securities, except such as has
been obtained and made under the federal securities laws or such as
may be required under state or foreign securities or Blue Sky laws.
(4) The favorable opinion, dated as of the Closing Time, of
Richards, Layton & Finger, counsel to Wilmington Trust Company, as
Institutional Trustee under the Declaration, and Guarantee Trustee under the
Preferred Securities Guarantee Agreement, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) Wilmington Trust Company is a Delaware
banking corporation with trust powers, duly organized, validly
existing and in good standing under the laws of the State of Delaware
with all necessary power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of the
Declaration and the Preferred Securities Guarantee Agreement.
(ii) The execution, delivery and performance by
the Institutional Trustee of the Declaration and the execution,
delivery and performance by the Guarantee Trustee of the Preferred
Securities Guarantee Agreement have been duly authorized by all
necessary corporation action on the part of the Institutional Trustee
and the Guarantee Trustee, respectively. The Declaration and the
Preferred Securities Guarantee Agreement have been duly executed and
delivered by the Institutional Trustee and the Guarantee Trustee,
respectively, and constitute the legal, valid and binding obligations
of the Institutional Trustee and the Guarantee Trustee, respectively,
enforceable against the Institutional Trustee and the Guarantee
Trustee, respectively, in accordance with their terms, except to the
extent enforcement thereof may be limited by the Bankruptcy
Exceptions.
(iii) The execution, delivery and performance of
the Declaration and the Preferred Securities Guarantee Agreement by
the Institutional Trustee and the Guarantee Trustee, respectively, do
not conflict with or constitute a breach of the Articles of
Organization or Bylaws of the Institutional Trustee and the Guarantee
Trustee, respectively.
(iv) No consent, approval or authorization of,
or registration with or notice to, any Delaware or federal banking
authority is required for the execution, delivery or performance by
the Institutional Trustee and the Guarantee
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Trustee of the Declaration and the Preferred Securities Guarantee
Agreement.
(5) The favorable opinion, dated as of the Closing Time, of
Ungaretti & Harris, counsel to The First National Bank of Chicago, as Purchase
Contract Agent, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The First National Bank of Chicago is duly
incorporated and is validly existing as a banking corporation with
trust powers under the laws of the United States with all necessary
power and authority to execute, deliver and perform its obligations
under the Purchase Contract Agreement and the Pledge Agreement.
(ii) The execution, delivery and performance by
the Purchase Contract Agent of the Purchase Contract Agreement and the
Pledge Agreement, and the authentication and delivery of the
Securities have been duly authorized by all necessary corporate action
on the part of the Purchase Contract Agent. The Purchase Contract
Agreement and the Pledge Agreement have been duly executed and
delivered by the Purchase Contract Agent, and constitute the legal,
valid and binding obligations of the Purchase Contract Agent,
enforceable against the Purchase Contract Agent in accordance with its
terms, except to the extent that enforcement thereof may be limited by
the Bankruptcy Exceptions.
(iii) the execution, delivery and performance of the
Purchase Contract Agreement and the Pledge Agreement by the Purchase
Contract Agent does not conflict with or constitute a breach of the
charter or by-laws of the Purchase Contract Agent.
(iv) No consent, approval or authorization of, or
registration with or notice to, any Illinois or federal governmental
authority or agency is required for the execution, delivery or
performance by the Purchase Contract Agent of the Purchase Contract
Agreement and the Pledge Agreement.
(6) The opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
special tax counsel to the Offerors, generally to the effect that based upon
current law and the assumptions stated or referred to therein, under current
U.S. federal income tax law: (i) the Trust will be classified as a grantor
trust and not as an association taxable as a corporation; (ii) the Junior
Subordinated Debentures will be classified as indebtedness of the Company, and
(iii) The discussion set forth in the Prospectus under the headings "Risk
Factors - Proposed Tax Legislation" and "Certain Federal Income Tax
Consequences" is a fair and accurate summary of the matters addressed therein.
The opinion expressed
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pursuant to clause (iii) may be conditioned on, among other things, the initial
and continuing accuracy of the facts, financial and other information,
covenants and representations set forth in certificates of officers of the
Company and the Trust and other documents deemed necessary for such opinion.
(7) The favorable opinion, dated as of then Closing Time, of
LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the Underwriters, in form
and substance satisfactory to the Underwriters, with respect to the
incorporation and legal existence of the Company, the issuance and sale of the
Securities, the Purchase Contract Agreement, the Pledge Agreement, the
Indenture, the Preferred Securities Guarantee Agreement, this Agreement, the
Pricing Agreement, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the Company shall
have furnished to such counsel such documents as they request for the purpose
of enabling them to pass upon such matters. In giving its opinion, LeBoeuf,
Lamb, Greene & MacRae, L.L.P. may rely as to certain matters of Michigan and
Delaware law upon the opinions of Daniel L. Schiffer, Esq. and Skadden, Arps,
Slate, Meagher & Flom LLP, special Delaware counsel for the Offerors, which
shall be delivered in accordance with Section 5(b)(1) and 5(b)(3) hereof.
(8) The favorable opinions, dated as of the Closing Time, of
(i) LeBoeuf, Lamb, Greene & MacRae, L.L.P., special Connecticut and
Pennsylvania counsel for the Underwriters, and (ii) Dickinson, Wright, Moon,
Van Dusen & Freeman, special Michigan counsel for the Underwriters, in form and
substance satisfactory to the Underwriters, with respect to the applicability
of the "bucket shop" laws of such states.
(c) Between the date of this Agreement and prior to the Closing Time,
no material adverse change shall have occurred in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Trust or the Company and its subsidiaries, considered as one enterprise,
whether or not in the ordinary course of business.
(d) At the Closing Time, the Representatives shall have received a
certificate of the President or a Vice-President of the Company and of the
Chief Financial Officer or Chief Accounting Officer of the Company and a
certificate of a Regular Trustee of the Trust, and dated as of the Closing
Time, to the effect that (i) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Trust or the Company and its subsidiaries considered
as one enterprise, whether or not in the ordinary course of business, (ii) the
representations and warranties in Section 1 hereof are true and correct as
though expressly made at and as of the Closing Time, (iii) the Company and the
Trust have complied with all agreements and satisfied all
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<PAGE> 40
conditions on their part to be performed or satisfied at or prior to the
Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or threatened by the Commission.
(e) At the time of the execution of this Agreement, the
Representatives shall have received from Deloitte & Touche LLP a letter dated
such date in form and substance satisfactory to the Representatives, to the
effect set forth below and as to such other matters as the Representatives may
reasonably request, that:
(i) They are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of
the 1933 Act and the 1933 Act Regulations;
(ii) In their opinion, the consolidated financial
statements and any financial statement schedules audited by them and
included or incorporated by reference in the Registration Statement
and the Prospectus as amended or supplemented comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934
Act Regulations;
(iii) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
including a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
condensed consolidated financial statements included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Registration Statement and the Prospectus as amended or supplemented
for the periods specified in such letter, a reading of the latest
available unaudited interim consolidated financial statements of the
Company and its subsidiaries, a reading of the minutes of the Company
and its subsidiaries since the audited consolidated financial
statements set forth in the Company's Annual Report on Form 10-K for
the most recent year, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated
financial statements set forth in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the
Registration Statement and the Prospectus as amended or
supplemented do not comply as to form in all material respects
with the applicable accounting requirements of the 1934 Act
and the 1934
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<PAGE> 41
Act Regulations as they apply to Form 10-Q or any material
modifications should be made for them to be in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements set forth in the Company's Annual Report
on Form 10-K for the most recent year ended incorporated by
reference in the Registration Statement and the Prospectus as
amended or supplemented;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus as amended or
supplemented do not agree with the corresponding items in the
unaudited consolidated financial statements from which such
data and items were derived;
(C) any unaudited pro forma consolidated condensed
financial statements or any unaudited pro forma consolidating
financial statements included or incorporated by reference in
the Prospectus as amended or supplemented do not comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations and
the 1934 Act and the 1934 Act Regulations or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(D) as of a specified date not more than five
days prior to the date of delivery of such letter, there has
been any decrease or increase in the common stock (except for
any increases in connection with any employee benefit,
dividend reinvestment or stock purchase plan of the Company)
or any increase or decrease in redeemable cumulative preferred
securities or long-term debt including capital lease
obligations and current maturities (except for sinking fund
and installment requirements under their long-term debt
agreements, terms of the preferred securities of subsidiaries
and purchases in the open market in anticipation thereof) or
any increase in short-term debt, or any decrease in
consolidated common shareholders' equity of the Company and
its consolidated subsidiaries (other than periodic dividends
declared to shareholders and any decreases pursuant to the
terms of the preferred redeemable increased dividend equity
securities of the Company), in each case as compared with the
corresponding amounts shown in the latest consolidated
statement of financial position of the Company and its
subsidiaries incorporated by reference in the Registration
Statement and the Prospectus as amended or supplemented,
except
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in each case for increases or decreases which the Prospectus
as amended or supplemented, including financial information
incorporated by reference, discloses have occurred or may
occur or which are described in such letter; and
(E) for the period from the date of the latest
consolidated financial statements included or incorporated by
reference in the Prospectus as amended or supplemented to the
end of the latest period for which unaudited condensed
consolidated financial statements or financial information are
available there were any decreases in consolidated operating
revenues, operating income, net income or earnings available
for Common Stock of the Company and its consolidated
subsidiaries, or any increases in any items specified by the
Representatives, in each case as compared with the
corresponding period in the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus as amended or supplemented,
including financial information incorporated by reference,
discloses have occurred or may occur or which are described in
such letter; and
(F) the unaudited condensed consolidated
financial statements referred to in Clause (E) are not stated
on a basis substantially consistent with the audited
consolidated financial statements incorporated by reference in
the Registration Statement and the Prospectus as amended or
supplemented.
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of
the Company for the five most recent fiscal years included in the
Prospectus as amended or supplemented and included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial
statements for such five fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K
for such fiscal years;
(v) In addition to the limited procedures, reading of
minutes, inquiries and other procedures referred to in clause (iii)
and (iv) above, they have carried out certain other specified
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus as amended or supplemented and the
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<PAGE> 43
Registration Statement, in the Company's Annual Report on Form 10-K
for the latest year ended and in the Company's Quarterly Reports on
Form 10-Q since the latest Annual Report on Form 10-K and which are
specified by the Representatives, and have compared certain of such
amounts, percentages and financial information with the accounting
records of the Company and its subsidiaries and have found them to be
in agreement; and
(vi) If applicable and agreed to by the parties, they have
made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the selected financial
data, pro forma financial information, prospective financial
statements, consolidating financial statements and/or condensed
financial statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in
their reports thereon, copies of which have been furnished to the
Representatives.
(f) At the Closing Time, the Representatives shall have received from
Deloitte & Touche LLP a letter, dated as of the Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred to
shall be a date not more than five days prior to the Closing Time.
(g) At the Closing Time, and at each Date of Delivery, if any,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions herein contained;
and all proceedings taken by the Offerors in connection with the issuance and
sale of the Securities as herein contemplated shall be satisfactory in form and
substance to the Underwriters and counsel for the Underwriters.
(h) At the Closing Time, the Securities shall be rated in one of the
four highest rating categories for preferred stock ("Investment Grade") by any
nationally recognized statistical rating agency, and the Offerors shall have
delivered to the Representatives a letter, dated the Closing Time, from such
nationally recognized statistical rating agency, or other evidence satisfactory
to the Representatives, confirming that the Securities have Investment Grade
ratings; and there shall not have occurred any decrease in the ratings of any
of the securities of the Company or of the Securities by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the 1933 Act Regulations) and such organization shall not have
publicly announced that it has under surveillance or review, with possible
negative implications, its
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<PAGE> 44
rating of any of the debt securities of the Company or of the Securities.
(i) At the Closing Time, the Income PRIDES and the Shares shall have
been approved for listing on the New York Stock Exchange upon notice of
issuance.
(j) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(k) In the event that the Underwriters exercise their option provided
in Section 2(b) hereof to purchase all or any portion of the Option Securities,
the representations and warranties of the Offerors contained herein and the
statements in any certificates furnished by the Offerors hereunder shall be
true and correct as of, and as if made on, each Date of Delivery, and at the
relevant Date of Delivery, the Underwriters shall have received:
(1) A certificate, dated such Date of Delivery, of the
President or a Vice-President of the Company and the Chief Financial
Officer or Chief Accounting Officer of the Company and a certificate
of a Regular Trustee of the Trust confirming that the certificate
delivered at the Closing Time pursuant to Section 5(d) hereof is true
and correct as of, and as if made on, such Date of Delivery.
(2) The favorable opinion of Daniel L. Schiffer, Esq., Senior
Vice President, General Counsel and Secretary for the Company, in form
and substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities and otherwise to
the same effect as the opinion required by Section 5(b)(1) hereof.
(3) The favorable opinion of Skadden, Arps, Slate, Meagher &
Flom LLP, special counsel and special tax counsel for the Offerors, in
form and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities and otherwise
to the same effect as the opinion required by Sections 5(b)(2) and
5(b)(6) hereof.
(4) The favorable opinion of Skadden, Arps, Slate, Meagher &
Flom, special Delaware counsel for the Offerors, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and otherwise to the same
effect as the opinion required by Section 5(b)(3) hereof.
(5) The favorable opinion of Richards, Layton & Finger,
counsel to Wilmington Trust Company, in form and substance
satisfactory to counsel for the Underwriters,
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<PAGE> 45
dated such Date of Delivery, relating to the Option Securities and
otherwise to the same effect as the opinion required by Section
5(b)(4) hereof.
(6) The favorable opinion of Ungaretti & Harris, counsel to
The First National Bank of Chicago, as Purchase Contract Agent, in
form and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities and otherwise
to the same effect as the opinion required by Section 5(b)(5) hereof.
(7) The favorable opinion of LeBoeuf, Lamb, Greene & MacRae,
L.L.P., counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise to the same effect as
the opinion required by Section 5(b)(7) hereof.
(8) A letter from Deloitte & Touche LLP in form and substance
satisfactory to the Underwriters and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished
to the Underwriters pursuant to Section 5(d) hereof, except that the
"specified date" in the letter furnished pursuant to this Section
5(i)(e) shall be a date not more than five days prior to such Date of
Delivery.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriters by notice to the Company at any time at or prior
to the Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 4.
SECTION 6. Indemnification.
(a) The Offerors agree to jointly and severally indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information
deemed to be part thereof, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact
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<PAGE> 46
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, provided, that (subject to Section 6(d) below)
any such settlement is effected with the written consent of the
Offerors; and
(iii) against any and all expense
whatsoever, as incurred (including, the fees and disbursements of
counsel chosen by Merrill Lynch), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that the foregoing indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Offerors by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto). The foregoing indemnity with respect to any untrue
statement contained in or omission from a preliminary prospectus shall not
inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, liability, claim,
damage or expense purchased any of the Securities that are the subject thereof
if such person was not sent or given a copy of the Prospectus (or the
Prospectus as amended or supplemented) (in each case exclusive of the documents
from which information is incorporated by reference) at or prior to the written
confirmation of the sale of such Securities to such person and the untrue
statement contained in or omission from such preliminary prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented).
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, the Trust and each of its
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<PAGE> 47
Trustees who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information deemed to be a
part thereof, if applicable, or any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Offerors by such Underwriter through
Merrill Lynch expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which
it may have otherwise than on account of this indemnity agreement. In the case
of parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by Merrill Lynch, and, in the case of
parties indemnified pursuant to Section 6(b) above, counsel to the indemnified
parties shall be selected by the Offerors. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
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(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Offerors on the one hand, and the Underwriters, on the other hand, from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Offerors on the one hand,
and the Underwriters, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by Offerors on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of such
Securities (before deducting expenses) received by the Offerors and the total
underwriting discount received by the Underwriters, in each case as set forth
on the cover of the Prospectus, or, if Rule 434 is used, the corresponding
location on the Term Sheet bear to the aggregate initial public offering price
of such Securities as set forth on such cover.
The relative fault of the Offerors, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether 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 Offerors or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
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The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company and each Trustee
of the Trust who signed the Registration Statement, and each person, if any,
who controls the Company and the Trust within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Offerors. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number
or aggregate principal amount, as the case may be, of Preferred Securities set
forth opposite their respective names in Schedule A to this Agreement, and not
joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of officers
of the Company or trustees of the Trust submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling person, or by or
-49-
<PAGE> 50
on behalf of the Company, and shall survive delivery of and payment for the
Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement, by notice to
the Company at any time at or prior to the Closing Time, if (i) there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse change
or any development which could reasonably be expected to result in a
prospective material adverse change, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) there has occurred any material adverse
change in the financial markets in the United States or any outbreak of
hostilities or escalation of hostilities or other calamity or crisis, or any
change or development involving a prospective change in national or
international political, financial or economic conditions the effect of which
is such as to make it, in the judgment of the Underwriters, impracticable to
market the Securities or to enforce contracts for the sale of the Securities,
or (iii) if trading in the Common Stock or any other security of the Company
has been suspended or limited by the Commission, NASD or the New York Stock
Exchange, or if trading generally on either the American Stock Exchange, the
New York Stock Exchange or in the over-the-counter market has been suspended or
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said
exchanges or by such system or by order of the Commission, NASD or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal, New York or Michigan authorities.
(b) If this Agreement and the Pricing Agreement are terminated
pursuant to this Section 9, such termination shall be without liability of any
party to any other party except as provided in Section 4, and provided,
further, that Sections 1, 6 and 7 shall survive such termination and remain in
full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or
more of the Underwriters shall fail at the Closing Time, as the case may be, to
purchase the Initial Securities which it or they are obligated to purchase
under this Agreement and the Pricing Agreement (the "Defaulted Securities"),
Merrill Lynch shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, Merrill
-50-
<PAGE> 51
Lynch shall not have completed such arrangements within such 24-hour period,
then:
(a) if the number or aggregate principal amount, as the case
may be, of Defaulted Securities does not exceed 10% of the total number or
aggregate principal amount, as the case may be, of Initial Securities, the
non-defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number or aggregate principal amount, as the case
may be, of Defaulted Securities exceeds 10% of the total number or aggregate
principal amount, as the case may be, of the Initial Securities to be purchased
on such date, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Merrill Lynch or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
the Prospectus or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to c/o Merrill Lynch at Merrill Lynch World
Headquarters, World Financial Center, North Tower, New York, New York 10281,
Attention of Anthony V. Leness, Managing Director, with a copy to LeBoeuf,
Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New York, New York
10019-5389, Attention: William S. Lamb, Esq.; notices to the Company shall be
directed to it at MCN Energy Group Inc., 500 Griswold Street, Detroit, Michigan
48226, Attention of Daniel L. Schiffer, Senior Vice President, General Counsel
and Secretary.
SECTION 12. Parties. This Agreement and the Pricing Agreement shall
each inure to the benefit of and be binding upon the Offerors and the
Underwriters and their respective successors. Nothing expressed or mentioned
in this Agreement or the Pricing Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters and the
Offerors and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right,
-51-
<PAGE> 52
remedy or claim under or in respect of this Agreement or the Pricing Agreement
or any provision herein or therein contained. This Agreement and the Pricing
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors and legal representatives, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE PRICING
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID
STATE. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME UNLESS OTHERWISE
INDICATED.
SECTION 14. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
-52-
<PAGE> 53
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, shall become a binding
agreement among the Company, the Trust and the several Underwriters in
accordance with its terms.
Very truly yours,
MCN CORPORATION
By: /s/ Sebastian Coppola
-----------------------------------
Name: Sebastian Coppola
Title: Senior Vice President
and Treasurer
MCN FINANCING III
By: /s/ Sebastian Coppola
-----------------------------------
Title: Regular Trustee
By: /s/ Daniel L. Schiffer
-----------------------------------
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
SMITH BARNEY INC.
LADENBURG THALMANN & CO. INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Anthony V. Leness
---------------------------------------
Authorized Signatory: Anthony V. Leness
Managing Director
Investment Banking Group
For themselves and as the Representatives of the
several Underwriters named in Schedule A hereto.
-53-
<PAGE> 54
SCHEDULE A
<TABLE>
<CAPTION>
Name of Underwriter Number of Shares
------------------- ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . . . . . . . 325,000
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . . . . . . . . . . . . . 325,000
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . . . . . . . . . 325,000
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325,000
Ladenburg Thalmann & Co. Inc. . . . . . . . . . . . . . . . . . . . . . 325,000
Dean Witter Reynolds Inc. . . . . . . . . . . . . . . . . . . . . . . . . 150,000
A.G. Edwards & Sons, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 150,000
PaineWebber Incorporated . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Robert W. Baird & Co. Incorporated . . . . . . . . . . . . . . . . . . . 75,000
First of Michigan Corporation . . . . . . . . . . . . . . . . . . . . . . 75,000
Roney & Co., LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,300,000
=========
</TABLE>
<PAGE> 55
EXHIBIT A
MCN CORPORATION
(A MICHIGAN CORPORATION)
MCN FINANCING III
(A DELAWARE BUSINESS TRUST)
2,300,000 FELINE PRIDES(SM)
(STATED AMOUNT OF $50 PER SECURITY)
EACH CONSISTING OF
A PURCHASE CONTRACT OF MCN CORPORATION
REQUIRING THE PURCHASE ON MAY 16, 2000 (OR EARLIER)
OF A NUMBER OF SHARES OF COMMON STOCK OF MCN CORPORATION
EQUAL TO THE SETTLEMENT RATE
AND
A 7 1/4% TRUST ORIGINATED PREFERRED SECURITIES
OF MCN FINANCING III
PRICING AGREEMENT
March 19, 1997
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, as representatives of the
several Underwriters named in the within-
mentioned Underwriting Agreement
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated March
19, 1997 (the "Underwriting Agreement"), relating to the purchase by the
several Underwriters named in Schedule A thereto for whom Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation, Salomon Brothers Inc, Smith Barney Inc. and
Ladenburg Thalmann & Co. Inc. are acting as representatives (the
"Representatives"), of the above FELINE PRIDES (the "Securities") of MCN
Corporation, doing business as MCN Energy Group Inc. (the "Company"), and MCN
Financing III (the "Trust").
Pursuant to Section 2 of the Underwriting Agreement, the
Company and the Trust agree with each Underwriter as follows:
- -------------------------
(SM)"FELINE PRIDES" is a service mark of Merrill Lynch & Co. Inc.
<PAGE> 56
1. The initial public offering price per security for the
Securities, determined as provided in said Section 2, shall be $50.00.
2. The purchase price per security for the Securities to be
paid by the several Underwriters shall be $48.50, being an amount
equal to the initial public offering price set forth above less $1.50
per security.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company and the Trust in accordance
with its terms.
Very truly yours,
MCN CORPORATION
By:
-----------------------------------
Name:
Title:
MCN FINANCING III
By:
-----------------------------------
Title: Regular Trustee
By:
-----------------------------------
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
SMITH BARNEY INC.
LADENBURG THALMANN & CO. INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
--------------------------------------
Authorized Signatory:
For themselves and as the Representatives of the several Underwriters named in
the Purchase Agreement.
- 2 -
<PAGE> 1
EXHIBIT 5.2
====================================
AMENDED AND RESTATED DECLARATION
OF TRUST
MCN FINANCING III
Dated as of March 19, 1997
====================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
<S> <C> <C>
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.3 Reports by the Institutional Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.4 Periodic Reports to Institutional Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE III
ORGANIZATION
SECTION 3.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.3 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.5 Title to Property of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.6 Powers and Duties of the Regular Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.8 Powers and Duties of the Institutional Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee . . . . . . . . . . . . . . . . . . 21
SECTION 3.10 Certain Rights of Institutional Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.11 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.12 Execution of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.14 Duration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.15 Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.2 Responsibilities of the Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.3 Right to Proceed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
ARTICLE V
TRUSTEES
<S> <C> <C>
SECTION 5.1 Number of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.2 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.3 Institutional Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.4 Certain Qualifications of Regular Trustees and Delaware Trustee Generally . . . . . . . . . . . . . 32
SECTION 5.5 Regular Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 5.6 Appointment, Removal and Resignation of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.7 Vacancies among Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.8 Effect of Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.9 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.10 Delegation of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.11 Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.2 Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 9.2 Transfer of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 9.3 Deemed Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.4 Book Entry Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.5 Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.6 Appointment of Successor Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.7 Definitive Preferred Security Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
<S> <C> <C>
SECTION 10.1 Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 10.2 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 10.3 Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 10.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 10.5 Outside Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.2 Certain Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.3 Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 11.4 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent . . . . . . . . . . . . . . . . . . 52
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 13.2 Representations and Warranties of Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 14.2 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 14.3 Intention of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 14.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 14.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 14.6 Partial Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 14.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ANNEX I TERMS OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
EXHIBIT A-1 FORM OF PREFERRED SECURITY
CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-1
EXHIBIT B SPECIMEN OF DEBENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C UNDERWRITING AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
</TABLE>
iii
<PAGE> 5
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
<S> <C> <C>
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3(a)
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(b)
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex I
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6(e)
- ---------------
</TABLE>
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
iv
<PAGE> 6
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
MCN FINANCING III
March 19, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of March 19, 1997, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the assets of the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established MCN Financing III
(the "Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of February 3, 1997 (as amended by the Amendment
to Declaration of Trust, dated as of March 19, 1997, as so amended the
"Original Declaration") and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on February 3, 1997, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debentures of the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE> 7
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or any day
on which banking institutions in New York City, in the State of New York are
permitted or required by any applicable law to close.
2
<PAGE> 8
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means the "Closing Time" and each "Date of Delivery"
under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement to be
dated as of March 25, 1997 of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
3
<PAGE> 9
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Preferred Guarantee
Trustee shall, at any particular time, be principally administered, which
office at the date of execution of this Agreement is located at
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means MCN Corporation, a Michigan corporation, in
its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means NBD Bank, as trustee under the Indenture
until a successor is appointed thereunder, and thereafter means such successor
trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Institutional Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"Debenture Repayment Price" means, with respect to any Debentures put
to the Sponsor on the Put Option Exercise Date for repayment, a price equal to
100% of the principal amount of the Debentures tendered for repayment plus any
accrued and unpaid interest thereon, including additional interest, if any, to
the date of such repayment.
"Definitive Preferred Security Certificates" has the meaning set
forth in Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
4
<PAGE> 10
"Direct Action" has the meaning specified in Section 3.8(e).
"Distribution" means a distribution payable to Holders of Securities
in accordance with Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"FELINE PRIDES" means a security which, upon issuance, will consist
of a unit (referred to as an Income PRIDES) comprised of (i) a stock purchase
contract under which (a) the holder of the unit will purchase from the Sponsor,
for an amount in cash, a certain number of shares of common stock of the
Sponsor and (b) the Sponsor will pay the holder contract adjustment payments,
and (ii) a 7 1/4% Preferred Security. After issuance, FELINE PRIDES units with
respect to which Treasury Securities have been substituted for Preferred
Securities will be referred to as Growth PRIDES.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture dated as of September 1, 1994, among
the Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
5
<PAGE> 11
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I
hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture
Act, Holder(s) of outstanding Securities voting together as a single class or,
as the context may require, Holders of outstanding Preferred Securities or
Holders of outstanding Common Securities voting separately as a class, who are
the record owners of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the
relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read
the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
6
<PAGE> 12
"Paying Agent" has the meaning specified in Section 7.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Pledge Agreement" means the Pledge Agreement dated as of March 25,
1997 among the Sponsor, The Chase Manhattan Bank, as collateral agent (the
"Collateral Agent") and The First National Bank of Chicago as purchase contract
agent (the "Purchase Contract Agent").
"Preferred Securities Guarantee" means the guarantee agreement to be
dated as of March 19, 1997, of the Sponsor in respect of the Preferred
Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement between the Trust,
the Debenture Issuer, and the underwriters designated by the Regular Trustees
with respect to the offer and sale of the Preferred Securities.
"Purchase Contract Agreement" means the Purchase Contract Agreement
dated as of March 25, 1997 among The First National Bank of Chicago, as
Purchase Contract Agent, and the Sponsor.
"Put Option" has the meaning set forth in Annex I hereto.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" has the meaning set forth in Section 5.1.
7
<PAGE> 13
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer or other officer of
the Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those per- formed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means MCN Corporation, a Michigan corporation doing
business as MCN Energy Group Inc., or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture
Act, Holder(s) of outstanding Securities voting together as a single class or,
as the context may require, Holders of outstanding Preferred Securities or
Holders of outstanding Common Securities voting separately as a class, who are
the record owners of 10% or more of the aggregate liquidation amount (including
the stated amount that would be paid on repayment, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant
class.
8
<PAGE> 14
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to
the extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Section Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Institutional Trustee (i) within 14 days after each
record date for payment of Distribu-
9
<PAGE> 15
tions, a list, in such form as the Institutional Trustee may reasonably
require, of the names and addresses of the Holders of the Securities ("List of
Holders") as of such record date, provided that neither the Sponsor nor the
Regular Trustees, on behalf of the Trust, shall be obligated to provide such
List of Holders at any time the List of Holders does not differ from the most
recent List of Holders given to the Institutional Trustee by the Sponsor and
the Regular Trustees on behalf of the Trust, and (ii) at any other time, within
30 days of receipt by the Trust of a written request for a List of Holders as
of a date no more than 14 days before such List of Holders is given to the
Institutional Trustee. The Institutional Trustee shall preserve, in as current
a form as is reasonably practicable, all information contained in Lists of
Holders given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity) provided that the Institutional Trustee may destroy
any List of Holders previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations
under Section Section 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after May 1 of each year, the Institutional Trustee
shall provide to the Holders of the Preferred Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The
Institutional Trustee shall also comply with the requirements of Section
313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees, on behalf of the Trust,
shall provide to the Institutional Trustee such documents, reports and
information as required by Section 314 (if any) and the compliance certificate
required by Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees, on behalf of the Trust,
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of
an Officers' Certificate.
10
<PAGE> 16
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion
in liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to
the Preferred Securities arising therefrom shall be deemed to have been cured,
for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or an Event of Default with respect to the
Preferred Securities or impair any right consequent thereon. Any waiver
by the Holders of the Preferred Securities of an Event of Default with
respect to the Preferred Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such Event of Default
with respect to the Common Securities for all purposes of this Declaration
without any further act, vote, or consent of the Holders of the Common
Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.6(b), the Event
of Default under the Declaration shall also not be waivable; or
11
<PAGE> 17
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration as provided below
in this Section 2.6(b), the Event of Default under the Declaration may
only be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated,
and until such Events of Default have been so cured, waived or otherwise
eliminated, the Institutional Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of Section Section 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such Section Section 316(a)(1)(A)
and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from
this Declaration and the Securities, as permitted by the Trust Indenture Act.
Subject to the foregoing provisions of this Section 2.6(b), upon such waiver,
any such default shall cease to exist and any Event of Default with respect to
the Common Securities arising therefrom shall be deemed to have been cured for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default with
respect to the Preferred Securities under this Declaration. Any waiver of an
Event of Default under the Indenture by the Institutional Trustee at the
direction of the Holders of the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of the
corresponding Event of Default under this Declaration with respect to the
Common Securities for all purposes of this Declaration without further act,
vote or consent of the Holders of the Common Securities. The foregoing
provisions of this Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of
the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture
Act is hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act.
12
<PAGE> 18
SECTION 2.7 Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all defaults with respect
to the Securities actually known to a Responsible Officer of the Institutional
Trustee, unless such defaults have been cured before the giving of such notice
(the term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be an Event of Default as defined in the Indenture, not including
any periods of grace provided for therein and irrespective of the giving of any
notice provided therein); provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 501 and 503 of the Indenture; or
(ii) any default as to which the Institutional Trustee shall
have received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "MCN Financing III," as such name may be modified
from time to time by the Regular Trustees following written notice to the
Holders of Securities. The Trust's activities may be conducted under the name
of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o MCN
Corporation, 500 Griswold Street, Detroit, Michigan 48226. On ten Business
Days written notice to the Holders of Securities, the Regular Trustees may
designate another principal office.
13
<PAGE> 19
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise set forth herein, to engage in only
those other activities necessary, or incidental thereto. The Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments, pledge
any of its assets, or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified for United States
federal income tax purposes as a grantor trust.
The Trust will be classified as a grantor trust for United States
federal income tax purposes under Subpart E of Subchapter J of the Code,
pursuant to which the owners of the Preferred Securities and the Common
Securities will be the owners of the Trust for United States federal income tax
purposes, and such owners will include directly in their gross income the
income, gain, deduction or loss of the Trust as if the Trust did not exist. By
the acceptance of this Trust neither the Trustees, the Sponsor nor the owners
of the Preferred Securities or Common Securities will take any position for
United States federal income tax purposes which is contrary to the
classification of the Trust as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers
shall constitute the act of and serve to bind the Trust. In dealing with the
Trustees acting on behalf of the Trust, no person shall be required to inquire
into the authority of the Trustees to bind the Trust. Persons dealing with the
Trust are entitled to rely conclusively on the power and authority of the
Trustees as set forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The
Holders shall not have legal title to any part of the assets of the Trust, but
shall have an undivided beneficial interest in the assets of the Trust.
14
<PAGE> 20
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that
the Trust may issue no more than one series of Preferred Securities and no
more than one series of Common Securities, and, provided further, that
there shall be no interests in the Trust other than the Securities, and
the issuance of Securities shall be limited to a simultaneous issuance of
both Preferred Securities and Common Securities each on Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order
to qualify or register all or part of the FELINE PRIDES in any State
in which the Sponsor has determined to qualify or register such
Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to the New York Stock Exchange, Inc. or any other national stock
exchange or the Nasdaq Stock Market's National Market for listing
upon notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Preferred Securities
under Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and
Pricing Agreement providing for the sale of the FELINE PRIDES;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Institutional Trustee for the benefit of the
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Holders of the Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Institutional Trustee
before taking or refraining from taking any Ministerial Action in relation
to a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of Section 316(c) of the Trust Indenture
Act, Distributions, voting rights, repayments and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary, appropriate, convenient or
incidental to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the
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Debentures by extending the interest payment period under the Indenture;
(n) to take all action that may be necessary or
appropriate for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business trust
under the laws of the State of Delaware and of each other jurisdiction in
which such existence is necessary to protect the limited liability of the
Holders of the Preferred Securities or to enable the Trust to effect the
purposes for which the Trust was created;
(o) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders;
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
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Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the
Institutional Trustee) shall not, engage in any activity other than as required
or authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power conferred
upon the Indenture Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise any right to rescind
or annul any declaration that the principal of all the Debentures shall be due
and payable, or (D) consent to any amendment, modification or termination of
the Indenture or the Debentures where such consent shall be required unless the
Trust shall have received an opinion of counsel to the effect that such
modification will not cause more than an insubstantial risk that for United
States federal income tax purposes the Trust will not be classified as a
grantor trust.
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SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Institutional
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Institutional Trustee in accordance with Section 5.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Debentures held by the Institutional Trustee, deposit such funds
into the Institutional Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities from the
Institutional Trustee Account in accordance with Section 6.1. Funds in
the Institutional Trustee Account shall be held uninvested until disbursed
in accordance with this Declaration. The Institutional Trustee Account
shall be an account that is maintained with a banking institution the
rating on whose long-term unsecured indebtedness is rated at least "A" or
above by a "nationally recognized statistical rating organization", as
that term is defined for purposes of Rule 436(g)(2) under the Securities
Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the repayment of the Preferred Securities and the
Common Securities to the extent the Debentures mature or the Put Option is
exercised; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the
occurrence of certain special events (as may be defined in the terms of
the Securities) arising from a change in law or a change in legal
interpretation or other specified circumstances pursuant to the terms of
the Securities.
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(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a Responsible
Officer of the Institutional Trustee has actual knowledge or the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act; provided, however, that if the Institutional Trustee fails to enforce its
rights under the Debentures after a holder of Preferred Securities has made a
written request, such holder of record of Preferred Securities may institute a
legal proceeding against the Debenture Issuer without first instituting any
legal proceeding against the Institutional Trustee or any other person or
entity. Notwithstanding the foregoing, if a Declaration Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest or principal on the Debentures on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the redemption date), then such holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the Debentures having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such holder (a
"Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the holders
of Common Securities will be subrogated to the rights of the holders of
Preferred Securities. In connection with such Direct Action, the Debenture
Issuer shall be subrogated to the rights of such holder of Preferred Securities
with respect to payments on the Preferred Securities under this Declaration to
the extent of any payment made by the Debenture Issuer to such holder of
Preferred Securities in such Direct Action. Except as provided in the
preceding sentences, the holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and
has accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a
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holder of Debentures under the Indenture and, if an Event of Default actually
known to a Responsible Officer of the Institutional Trustee occurs and is
continuing, the Institutional Trustee shall, for the benefit of Holders of the
Securities, enforce its rights as holder of the Debentures subject to the
rights of the Holders pursuant to the terms of such Securities.
(h) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust
set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants
or obligations shall be read into this Declaration against the
Institutional Trustee; and
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(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Institutional Trustee,
the Institutional Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness,
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existence or sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional
Trustee Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by a
Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or
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any filing under tax or securities laws) or any rerecording, refiling or
registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of
its employees. The Institutional Trustee shall have the right at any time
to seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of
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the Securities, and the signature of the Institutional Trustee or its
agents alone shall be sufficient and effective to perform any such action
and no third party shall be required to inquire as to the authority of the
Institutional Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Institutional Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
and
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in
any jurisdiction in which it shall be illegal, or in which the Institutional
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this
Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be
a Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act.
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SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, any Regular Trustee or, if there is only one, such Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for seven (7) years from the Closing Date.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
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(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Preferred Securities rank with respect to Distributions
and payments upon liquidation, repayment and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) if necessary, the Preferred Securities or any Successor
Securities will be listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or with an
other organization on which the Preferred Securities are then listed or
quoted;
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical
rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the Preferred Securities as a result of such merger,
consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of
the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such matters to
the effect that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
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(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes and such merger, consolidation, amalgamation, or replace-
ment does not result in a taxable event to any Holders of Preferred
Securities or FELINE PRIDES or otherwise effect the United States
federal income tax consequences of any investment in the Preferred
Securities or FELINE PRIDES; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities,
the Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the FELINE PRIDES and to do
any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the
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Trust, as the Sponsor deems necessary or advisable in order to comply with
the applicable laws of any such States;
(c) if necessary, to prepare for filing by the Trust of an
application to the New York Stock Exchange or any other national stock
exchange or the Nasdaq National Market for listing upon notice of issuance
of any Preferred Securities;
(d) if necessary, to prepare for filing by the Trust with the
Commission of a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12(b) of the
Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the FELINE PRIDES.
SECTION 4.3 Right to Proceed.
The Sponsor acknowledges the rights of Holders to institute a Direct
Action as set forth in Section 3.8(e) hereto.
SECTION 4.4 Expenses.
In connection with the offering, sale and issuance of the Debentures
to the Institutional Trustee and in connection with the sale of the Securities
by the Trust, the Debenture Issuer, in its capacity as borrower with respect to
the Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriter payable
pursuant to the Underwriting Agreement and compensation of the Trustee under
the Indenture in accordance with the provisions of the Indenture;
(b) be responsible for and shall pay all debts and obligations
(other than with respect to the Securities) and all costs and expenses of the
Trust (including, but not limited to, costs and expenses relating to the
organization, maintenance and dissolution of the Trust, the offering, sale and
issuance of the Securities (including commissions to the underwriters in
connection therewith), the fees and expenses (including reasonable counsel fees
and expenses) of the Institutional Trustee, the Delaware Trustee and the
Regular Trustees (including any amounts payable under Article X of this
Declaration), the costs and expenses relating to the operation of the Trust,
including, without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving and
computing or accounting equipment, paying agent(s),
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registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the acquisition, financing, and disposition of Trust assets and the enforcement
by the Institutional Trustee of the rights of the Holders of the Preferred
Securities);
(c) be primarily liable for any indemnification obligations arising
with respect to this Declaration; and
(d) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
The Debenture Issuer's obligations under this Section 4.4 shall be
for the benefit of, and shall be enforceable by, any person to whom such debts,
obligations, costs, expenses and taxes are owned (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
Debenture Issuer's obligations under this Section 4.4 directly against the
Debenture Issuer and the Debenture Issuer irrevocably waives any right of
remedy to require that any such Creditor take any action against the Trust or
any other Person before proceeding against the Debenture Issuer. The Debenture
Issuer agrees to execute such additional agreements as may be necessary or
desirable in order to give full effect to the provisions of this Section 4.4.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be three(3), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; provided, however, that, the
number of Trustees shall in no event be less than two (2); provided
further that (1) one Trustee, in the case of a natural person, shall be a
person who is a resident of the State of Delaware or that, if not a
natural person, is an entity which has its principal place of business in
the State of Delaware (the "Delaware Trustee"); (2) there shall be at
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least one Trustee who is an employee or officer of, or is affiliated with
the Sponsor (a "Regular Trustee"); and (3) one Trustee shall be the
Institutional Trustee for so long as this Declaration is required to
qualify as an indenture under the Trust Indenture Act, and such Trustee
may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable
law, then the Institutional Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.
(c) The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to
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law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.3(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Institutional Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in Section 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
SECTION 5.4 Certain Qualifications of Regular Trustees and Delaware Trustee
Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Regular Trustees.
The initial Regular Trustees shall be:
Daniel L. Schiffer
Sebastian Coppola
c/o MCN Energy Group Inc.
500 Griswold Street
Detroit, Michigan 48226
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(a) Except as expressly set forth in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by a majority
of the Regular Trustees; and
(c) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Institutional
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Institutional Trustee and delivered to
the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections
5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death,
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removal or resignation. Any Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing signed by the
Trustee and delivered to the Sponsor and the Trust, which resignation shall
take effect upon such delivery or upon such later date as is specified therein;
provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee has
been appointed and has accepted such appointment by instrument executed by
such Successor Delaware Trustee and delivered to the Trust, the Sponsor
and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation, the resigning Institutional Trustee or Delaware
Trustee, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or
successor Delaware Trustee, as the case may be.
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SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees
is increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee
shall not operate to annul the Trust. Whenever a vacancy in the number of
Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than
48 hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 24 hours before a meeting. Notices shall contain a
brief statement of the time, place and anticipated purposes of the meeting.
The presence (whether in person or by telephone) of a Regular Trustee at a
meeting shall constitute a waiver of notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this Declaration,
any action of the Regular Trustees may be taken at a meeting by vote of a
majority of the Regular Trustees present (whether in person or by telephone)
and eligible to vote with respect to such matter, provided that a Quorum is
present, or without a meeting by the unanimous written consent of the Regular
Trustees. In the event there is only one Regular Trustee, any
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and all action of such Regular Trustee shall be evidenced by a written consent
of such Regular Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
Section 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either
may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Institutional Trustee or the Delaware Trustee, as
the case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, 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.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If and to
the extent that the Debenture Issuer makes a payment of interest (including
Compounded Interest (as defined in the Indenture) and Additional Interest (as
defined in the Indenture)), premium and/or principal on the Debentures held by
the Institutional Trustee (the amount
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of any such payment being a "Payment Amount"), the Institutional Trustee shall
and is directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall, on behalf of the Trust, issue one
class of preferred securities representing undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities.") The Trust shall issue no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual signature of any present
or any future Regular Trustee. In case any Regular Trustee of the Trust who
shall have signed any of the Securities shall cease to be such Regular Trustee
before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any rule or
regulation of any stock exchange on which Securities may be listed, or to
conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
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(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
SECTION 7.2 Paying Agent.
In the event that the Preferred Securities are not in book-entry only
form, the Trust shall maintain in the borough of Manhattan, City of New York,
State of New York, an office or agency where the Preferred Securities may be
presented for payment ("Paying Agent"), and any such Paying Agent shall comply
with Section 317(b) of the Trust Indenture Act. The Trust may appoint the
Paying Agent and may appoint one or more additional paying agents in such other
locations as it shall determine. The term "Paying Agent" includes any
additional paying agent. The Trust may change any Paying Agent without prior
notice to any Holder. The Trust shall notify the Institutional Trustee of the
name and address of any Agent not a party to this Declaration. If the Trust
fails to appoint or maintain another entity as Paying Agent, the Institutional
Trustee shall act as such. The Trust or any of its Affiliates may act as
Paying Agent. The Trust shall initially act as Paying Agent for the Preferred
Securities and the Common Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the filing of a certificate of
cancellation with respect to the Trust after having obtained the consent
of a majority in liquidation amount of the Securities voting together as a
single class to file such certificate of cancellation or the revocation of
the Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(iv) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance
with the terms of the Securities and all of
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the Debentures endorsed thereon shall have been distributed to the Holders
of Securities in exchange for all of the Securities; or
(v) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and upon completion of the winding-up of the
Trust and its termination, the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to
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it. Upon surrender for registration of transfer of any Certificate, the
Regular Trustees shall cause one or more new Certificates to be issued in the
name of the designated transferee or transferees. Every Certificate
surrendered for registration of transfer shall be accompanied by a written
instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
The Preferred Securities Certificates, on original issuance, in
addition to being issued in the form of one or more definitive, fully
registered Preferred Securities Certificate (each a "Definitive Preferred
Securities Certificate") registered initially in the books and records of the
Trust in the name of The First National Bank of Chicago, as Purchase Contract
Agent, will be issued in the form of one or more, fully registered, global
Preferred Security Certificates (each a "Global Certificate"), to be delivered
to DTC, the initial Clearing Agency, by, or on behalf of, the Trust. Such
Global Certificate(s) shall initially be registered on the books and records of
the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred
Security Beneficial Owner will receive a definitive Preferred Security
Certificate representing such Preferred Security Beneficial Owner's interests
in such Global Certificate(s), except as provided in Section 9.7. Except for
the Definitive Preferred Security Certificates as specified herein and the
definitive, fully registered Preferred Securities certifies that have been
issued to the Preferred Security Beneficial Owners pursuant to Section 9.7:
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(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificate(s) and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificate(s) and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until definitive fully
registered Preferred Security Certificates shall have been issued to the
Preferred Security Beneficial Owners pursuant to Section 9.7 or otherwise, the
Regular Trustees shall give all such notices and communications specified
herein to be given to the Preferred Security Holders to the Clearing Agency,
and shall have no notice obligations to the Preferred Security Beneficial
Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency
with respect to such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred
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Securities and a successor Clearing Agency is not appointed within 90 days
after such discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive fully registered Preferred Security Certificates
shall be prepared by the Regular Trustees on behalf of the Trust with
respect to such Preferred Securities; and
(d) upon surrender of the Global Certificate(s) by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause definitive fully registered Preferred Securities Certificates
to be delivered to Preferred Security Beneficial Owners in accordance with
the instructions of the Clearing Agency. Neither the Trustees nor the
Trust shall be liable for any delay in delivery of such instructions and
each of them may conclusively rely on and shall be protected in relying
on, said instructions of the Clearing Agency. The definitive fully
registered Preferred Security Certificates shall be printed, lithographed
or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which Preferred Securities
may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless.
then, in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, any Regular Trustee on behalf of the Trust shall
execute and deliver, in exchange for or
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in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like denomination. In connection with the issuance of any new
Certificate under this Section 9.8, the Regular Trustees may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the
Debentures, the Securities Guarantees and the terms of the Securities, the
Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be
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liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's gross negligence or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Institutional Trustee under the Trust
Indenture Act), are agreed by the parties hereto to replace such other duties
and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person shall
act in a manner that is, or provides terms that are, fair and reasonable
to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement
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contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in
its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the de-
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fense or settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust
unless and only to the extent that the Court of Chancery of Delaware or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security Holder of the
Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is
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reasonably and promptly made (i) by the Regular Trustees by a majority
vote of a quorum of disinterested Regular Trustees, (ii) if such a quorum
is not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion or (iii) the Common Security Holder of the Trust, that, based upon
the facts known to the Regular Trustees, counsel or the Common Security
Holder at the time such determination is made, such Company Indemnified
Person acted in bad faith or in a manner that such person did not believe
to be in or not opposed to the best interests of the Trust, or, with
respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the Regular
Trustees, independent legal counsel or Common Security Holder reasonably
determine that such person deliberately breached his duty to the Trust or
its Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the
Debenture Issuer or Preferred Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between
the Debenture Issuer and each Company Indemnified Person who serves in
such capacity at any time while this Section 10.4(a) is in effect. Any
repeal or modification of this Section 10.4(a) shall not affect any rights
or obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not
the Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or
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agent of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent entity
if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be
a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary
Indemnified Person") for, and to hold each Fiduciary Indemnified Person
harmless against, any loss, liability or expense incurred without gross
negligence( or, in the case of the Institutional Trustee, pursuant to Section
3.9, negligence) or bad faith on its part, arising out of or in connection with
the acceptance or administration or the trust or trusts hereunder, including
the costs and expenses (including reasonable legal fees and expenses) of
defending itself against or investigating any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 10.4(b) shall survive the
satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee, or the Institutional Trustee shall be obligated
to present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Institutional Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
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particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Institutional Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the Sponsor
or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States
federal income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the
Code to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(c) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
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SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the Institutional Trustee shall be
made directly to the Institutional Trustee Account and no other funds of the
Trust shall be deposited in the Institutional Trustee Account. The sole
signatories for such accounts shall be designated by the Regular Trustees;
provided, however, that the Institutional Trustee shall designate the
signatories for the Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to
each Holder, and any representations and forms as shall reasonably be requested
by the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the
Holder to applicable jurisdictions. To the extent that the Trust is required
to withhold and pay over any amounts to any authority with respect to
distributions or allocations to any Holder, the amount withheld shall be deemed
to be a distribution in the amount of the withholding to the Holder. In the
event of any claimed over withholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount required to be withheld was
not withheld from actual Distributions made, the Trust may reduce subsequent
Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
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(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
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(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the holders of the Common Securities under Article
V to increase or decrease the number of, and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the right, preferences or privileges of the
Holders; and
(v) to modify, eliminate and add to any provision of the Amended
Declaration to such extent as may be necessary.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms
of the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call
a meeting of the Holders of such class if directed to do so by the Holders of
at least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a
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meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Security Certificates held by the Holders of Securities exercising
the right to call a meeting and only those Securities specified shall be
counted for purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating
to the giving, voting or validity of proxies shall be governed by the
General Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation;
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(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Institutional Trustee's acceptance of
its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under
the laws of the State of Delaware, with trust power and authority to
execute and deliver, and to carry out and perform its obligations under
the terms of, the Declaration;
(b) the Institutional Trustee satisfies the requirements set forth
in Section 5.3(a);
(c) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Institutional Trustee. The
Declaration has been duly executed and delivered by the Institutional
Trustee, and it constitutes a legal, valid and binding obligation of the
Institutional Trustee, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws
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affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law);
(d) the execution, delivery and performance of the Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the Articles of Organization or By-laws of the Institutional Trustee;
(e) no consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee, of the
Declaration; and
(f) the Institutional Trustee, pursuant to this Declaration, shall
hold legal title and a valid ownership interest in the Debentures.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under
the laws of the State of Delaware, with trust power and authority to
execute and deliver, and to carry out and perform its obligations under
the terms of, the Declaration;
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking
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authority is required for the execution, delivery or performance by the
Delaware Trustee, of the Declaration; and
(d) The Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
MCN Financing III
500 Griswold Street
Detroit, Michigan 48226
Attention: Treasurer
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of
to the Holders of the Securities):
(c) if given to the Institutional Trustee, at its Corporate Trust
Office to the attention of Corporate Trust Administration (or such other
address as the Institutional Trustee may give notice of to the Holders of
the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
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MCN Energy Group Inc.
500 Griswold Street
Detroit, Michigan 48226
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust.
The provisions of this Declaration shall be interpreted to further this
intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder
of this Declaration, or the applica-
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tion of such provision to persons or circumstances other than those to which it
is held invalid, shall not be affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/s/ Daniel L. Schiffer
----------------------------------
Daniel L. Schiffer, as Regular
Trustee
/s/ Sebastian Coppola
----------------------------------
Sebastian Coppola, as Regular
Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ Denise M. Geran
-------------------------------
Name: Denise M. Geran
Title: Financial Services
Officer
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By: /s/ Denise M. Geran
-------------------------------
Name: Denise M. Geran
Title: Financial Services
Officer
MCN CORPORATION, as Sponsor
By: /s/ Sebastian Coppola
-------------------------------
Name: Sebastian Coppola
Title: Senior Vice President
and Treasurer
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ANNEX I
TERMS OF
7-1/4% TRUST ORIGINATED PREFERRED SECURITIES
7-1/4% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of March 19, 1997 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. 2,645,000 Preferred Securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of One Hundred Thirty Two Million, Two Hundred and Fifty Thousand Dollars
($132,250,000) and a liquidation amount with respect to the assets of the Trust
of $50 per preferred security, are hereby designated for the purposes of
identification only as "7-1/4% Trust Originated Preferred Securities(SM)
('TOPrS'(SM))" (the "Preferred Securities"). The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice
or to conform to the rules of any stock exchange on which the Preferred
Securities are listed.
(b) Common Securities. 81,805 Common Securities of the Trust with
an aggregate liquidation amount with respect to the assets of the Trust of Four
Million, Ninety Thousand, Two Hundred and Fifty Dollars ($4,090,250) and a
liquidation amount with respect to the assets of the Trust of $50 per common
security, are hereby designated for the purposes of identification only as
"7-1/4% Trust Originated Common Securities" (the "Common Securities"). The
Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice.
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2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate
per annum of 7 1/4% (the "Coupon Rate") of the stated liquidation amount of $50
per Security, such rate being the rate of interest payable on the Debentures to
be held by the Institutional Trustee. Distributions in arrears for more than
one quarter 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 payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Debentures held by the Institutional Trustee and to
the extent the Institutional Trustee has funds available therefor. The amount
of Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue
from March 25, 1997, and will be payable quarterly in arrears, on March 31,
June 30, September 30, and December 31 of each year, commencing on June 30,
1997, except as otherwise described below. The Debenture Issuer has the right
under the Indenture to defer payments of interest by extending the interest
payment period from time to time on the Debentures for a period not exceeding
20 consecutive quarters (each an "Extension Period"), during which Extension
Period no interest shall be due and payable on the Debentures, provided that no
Extension Period shall last beyond the date of maturity of the Debentures. As
a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded quarterly during any such Extension Period. Payments of accrued
Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period;
provided that such Extension Period together with all such previous and further
extensions thereof may not exceed beyond the maturity date of the Debentures.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the Business Day immediately preceding each of the relevant payment
dates on the Debentures. Subject to any applicable laws and regulations and
the
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provisions of the Declaration, each such payment in respect of the Preferred
Securities will be made as described under the heading "Description of the
Trust Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust
Company" in the Prospectus Supplement dated March 19, 1997, to the Prospectus
dated March 10, 1997 (together, the "Prospectus"), of the Trust included in the
Registration Statement on Form S-3 (file no. 333-21175) of the Sponsor, the
Trust and certain other business trusts. The relevant record dates for the
Common Securities shall be the same record date as for the Preferred
Securities. If the Preferred Securities shall not continue to remain in
book-entry only form, the relevant record dates for the Preferred Securities,
shall conform to the rules of any securities exchange on which the securities
are listed and, if none, shall be selected by the Regular Trustees, which dates
shall be at least one Business Day before the relevant payment dates, which
payment dates correspond to the interest payment dates on the Debentures.
Distributions payable on any Securities that are not punctually paid on any
Distribution payment date, as a result of the Debenture Issuer having failed to
make a payment under the Debentures, will cease to be payable to the Person in
whose name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distribution payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. So long as the Holder of any Preferred Securities is the
Collateral Agent, the payment of Distributions on such Preferred Securities
held by the Collateral Agent will be made at such place and to such account as
may be designated by the Collateral Agent.
(d) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Securities, with an interest rate equal to
the Coupon Rate of, and bearing accrued
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and unpaid interest in an amount equal to the accrued and unpaid Distributions
on, such Securities and which shall be distributed on a Pro Rata basis to the
Holders of the Securities in exchange for such Securities (such amount being
"Liquidation Distribution").
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Repayment and Distribution.
(a) Upon the repayment of the Debentures in whole (but not in part),
at maturity, the proceeds from such repayment shall be simultaneously applied
to repay Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so repaid at a repayment price of
$50 per Security plus an amount equal to accrued and unpaid Distributions
thereon at the date of the repayment, payable in cash (the "Repayment Price").
Holders will be given not less than 30 nor more than 60 days notice of such
repayment.
(b) Upon the distribution of the Debentures (after satisfaction of
creditors), in whole (but not in part), pursuant to a Special Event (as
described below) Debentures with an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as the
Securities, shall be distributed to the Holders of the Securities in
liquidation of such Holders' interests in the Trust on a Pro Rata basis, within
90 days following the occurrence of such Special Event.
(c) If a Tax Event or an Investment Company Event (each as defined
below, and each a "Special Event") shall occur and be continuing the Regular
Trustees shall dissolve the Trust and, after satisfaction of creditors, cause
Debentures held by the Institutional Trustee, having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on, and having the same record date for
payment as the Securities, to be distributed to the Holders of the Securities
in liquidation of such Holders' interests in the Trust on a Pro Rata basis,
within 90 days following the occurrence of such Special Event (the "90 Day
Period"); and provided, however, that, if at the time there is available to the
Trust the opportunity to eliminate, within the 90 Day Period, the Special Event
by taking some ministerial action, such as filing a form or making an election,
or pursuing
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some other similar reasonable measure that has no adverse effect on the Trust,
the Debenture Issuer, the Sponsor or the Holders of the Securities
("Ministerial Action"), the Trust will pursue such Ministerial Action in lieu
of dissolution.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Tax Event Opinion") to the effect that on or after the date of the
Prospectus Supplement, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority therefor or therein, or (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is
taken, in each case on or after the date of the Prospectus Supplement, there is
more than an insubstantial risk that (i) the Trust is or will be within 90 days
of the date thereof, subject to United States federal income tax with respect
to interest accrued or received on the Debentures, (ii) the Trust is, or will
be within 90 days of the date thereof, subject to more than a de minimis amount
of taxes, duties or other governmental charges, or (iii) interest payable by
the Debenture Issuer to the Trust on the Debentures is not, or within 90 days
of the date thereof will not be, deductible, in whole or in part, by the
Debenture Issuer for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in practice under the Investment Company Act (an "Investment Company Event
Opinion") that, as a result of the occurrence of a change in law or regulation
or a written change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is a more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after the date of the Prospectus Supplement.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) The Depository Trust Company
(the "Depository") or its nominee (or any successor Clearing Agency or its
nominee) or the Collateral Agent, as the record Holder of the Preferred
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distri-
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bution and any certificates representing Securities, except for certificates
representing Preferred Securities held by the Depository or its nominee (or any
successor Clearing Agency or its nominee), will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on such Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissue.
(d) Repayment or Distribution Procedures.
(i) Notice of any repayment of, or notice of distribution of
Debentures in exchange for the Securities (a "Repayment/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities
to be repaid or exchanged not fewer than 30 nor more than 60 days before
the date fixed for repayment or exchange thereof which, in the case of a
repayment, will be the date fixed for repayment of the Debentures. For
purposes of the calculation of the date of repayment or exchange and the
dates on which notices are given pursuant to this Section 4(d)(i), a
Repayment/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders of
Securities. Each Repayment/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing in the
books and records of the Trust. No defect in the Repayment/Distribution
Notice or in the mailing of either thereof with respect to any Holder
shall affect the validity of the repayment or exchange proceedings with
respect to any other Holder.
(ii) If Securities are to be repaid and the Trust gives a
Repayment/Distribution Notice, which notice may only be issued if the
Debentures are repaid as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the repayment date, provided that the Debenture Issuer
has paid the Institutional Trustee a sufficient amount of cash in
connection with the related repayment on maturity of the Debentures, the
Institutional Trustee will deposit irrevocably with the Depository or its
nominee (or successor Clearing Agency or its nominee) funds sufficient to
pay the applicable Repayment Price with respect to the Preferred
Securities and will give the Depository irrevocable instructions and
authority to pay the Repayment Price to the Holders of the Preferred
Securities, and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, provided that the Debenture Issuer
has paid the Institutional Trustee a sufficient amount of cash
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in connection with the related repayment on maturity of the Debentures,
the Institutional Trustee will pay the relevant Repayment Price to the
Holders of such Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on the repayment
date. If a Repayment/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the close
of business on the date of such deposit, or on the repayment date, as
applicable, distributions will cease to accrue on the Securities so repaid
and all rights of Holders of such Securities so repaid will cease, except
the right of the Holders of such Securities to receive the Repayment
Price, but without interest on such Repayment Price. Neither the Regular
Trustees nor the Trust shall be required to register or cause to be
registered the transfer of any Securities that have been so repaid. If
any date fixed for repayment of Securities is not a Business Day, then
payment of the Repayment Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business
Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for repayment. If payment of the
Repayment Price in respect of any Securities is improperly withheld or
refused and not paid either by the Institutional Trustee or by the Sponsor
as guarantor pursuant to the relevant Securities Guarantee, Distributions
on such Securities will continue to accrue from the original repayment
date to the actual date of payment, in which case the actual payment date
will be considered the date fixed for repayment for purposes of
calculating the Repayment Price.
(iii) Repayment/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing
Agency or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities to the Holder
thereof.
(iv) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), provided the acquiror
is not the Holder of the Common Securities or the obligor under the
Indenture, the Sponsor or any of its subsidiaries may at any time and from
time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
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5. Repayment at Option of Holders
(a) Each Holder of Preferred Securities, including the Collateral
Agent, if applicable, shall have the right to require the Trust to repay all or
a portion of the Preferred Securities owned or pledged with such Holder (the
"Put Option") on May 16, 2000, the Purchase Contract Settlement Date (the "Put
Option Exercise Date") at a repayment price of $50 per Security plus an amount
equal to accrued Distributions thereon to the date of payment (the "Put Option
Repayment Price").
(b) The Trust will obtain funds to pay the Put Option Repayment
Price of Preferred Securities being repaid under the Put Option by presenting
to the Debenture Issuer, pursuant to the Trust's right under the Debentures to
require the Debenture Issuer to repay all or a portion of the Debenture on the
Put Option Exercise Date, Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount of such Preferred Securities for
repayment on the Put Option Exercise Date at the Debenture Repayment Price.
(c) In order for the Preferred Securities to be repaid on the Put
Option Exercise Date, the Trust must receive at the Corporate Trust Office of
the Institutional Trustee not less than 10 nor more than 30 days prior to the
Put Option Exercise Date, the Preferred Securities to be repaid with the form
entitled "Option to Elect Repayment" on the reverse thereof or otherwise
accompanying such Preferred Security duly completed. Any such notice received
by the Trust shall be irrevocable. All questions as to the validity,
eligibility (including time of receipt) and acceptance of the Preferred
Securities for repayment shall be determined by the Trust, whose determination
shall be final and binding. Notwithstanding the foregoing, so long as the
Holder is the Collateral Agent, such notice to elect repayment may be delivered
to the Trust at any time prior to 10:00 a.m., New York City time, on the Put
Option Exercise Date and in the form and manner as may be designated by the
Collateral Agent.
(d) Payment of the Put Option Repayment Price to Holders of
Preferred Securities shall be made at the Corporate Trust Office of the
Institutional Trustee, provided that the Debenture Issuer has paid the
Institutional Trustee a sufficient amount of cash in connection with the
related repayment of the Debenture. Notwithstanding the foregoing, so long as
the Holder of any Preferred Securities is the Collateral Agent, the payment of
the Put Option Repayment Price in respect of such Preferred Securities held by
the Collateral Agent shall be made no later than 1:00 p.m., New York City time,
on the Put Option Exercise Date by check or wire transfer in immediately
available funds at such place and to such account as may be designated by the
Collateral Agent. If the Institutional Trustee holds immediately available
funds sufficient to pay the Put Option Repayment Price
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of such Preferred Securities, then, immediately prior to the close of business
on the Put Option Exercise Date, such Preferred Securities will cease to be
outstanding and distributions thereon will cease to accrue, whether or not
Preferred Securities are delivered to the Institutional Trustee, and all other
rights of the Holder in respect of the Preferred Securities, including the
Holder's right to require the Trust to repay such Preferred Securities, shall
terminate and lapse (other than the right to receive the Put Option Repayment
Price but without interest on such Put Option Repayment Price). Neither the
Regular Trustees nor the Trust shall be required to register or cause to be
registered the transfer of any Preferred Securities for which repayment has
been elected. If payment of the Put Option Repayment Price in respect of
Preferred Securities is (i) improperly withheld or refused and not paid either
by the Institutional Trustee or by the Sponsor as guarantor pursuant to the
Preferred Securities Guarantee, or (ii) not paid by the Institutional Trustee
as the result of an Event of Default with respect to the Debentures presented
for repayment as described in paragraph 5(b), Distributions on such Preferred
Securities will continue to accrue, from the original Put Option Exercise Date
to the actual date of payment, in which case the actual payment date will be
considered the Put Option Exercise Date for purposes of calculating the Put
Option Repayment Price.
6. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 6(b) and 8 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Preferred Securities, voting
separately as a class may direct the time, method, and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or exercising
any trust or power conferred upon the Institutional Trustee under the
Declaration, including (i) directing the time, method, place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default and its consequences that is waivable
under the Indenture, or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable,
provided, however, that, where a consent under the Indenture would require the
consent or act of the Holders of greater than a majority of the Holders in
principal amount of Debentures affected thereby (a "Super Majority"), the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Preferred Securities which the relevant Super Majority represents
of the aggregate principal
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amount of the Debentures outstanding. The Institutional Trustee shall not
revoke any action previously authorized or approved by a vote of the Holders of
the Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
shall not take any action in accordance with the directions of the Holders of
the Preferred Securities under this paragraph unless the Institutional Trustee
has obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other than
a grantor trust on account of such action. If the Institutional Trustee fails
to enforce its rights under the Declaration, any Holder of Preferred Securities
may institute a legal proceeding directly against any person to enforce the
Institutional Trustee's rights under the Declaration without first instituting
a legal proceeding against the Institutional Trustee or any other Person.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest or principal on the Debentures on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the redemption date), then a holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on the Debentures having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such holder on
or after the respective due date specified in the Debentures. Except as
provided in the preceding sentence, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to the holders of
the Debentures.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Preferred Securities. Each such
notice will include a statement setting forth (i) the date of such meeting or
the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to repay and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
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Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
7. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b), (c) and as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Event of Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second
to last sentence of this paragraph, the Holders of a Majority in liquidation
amount of the Common Securities, voting separately as a class, may direct the
time, method, and place of conducting any proceeding for any remedy available
to the Institutional Trustee, or exercising any trust or power conferred upon
the Institutional Trustee under the Declaration, including (i) directing the
time, method, place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waive any past default
and its consequences that is waivable under Section 513 of the Indenture, or
(iii) exercise any right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable, provided that, where a consent
or action under the Indenture would require the consent or act of the Holders
of greater than a majority in principal amount of Debentures affected thereby
(a "Super Majority"), the Institutional Trustee may only give such consent or
take such action at the written direction of the Holders of at least the
proportion in liquidation amount of the Common Securities which the relevant
Super Majority represents of the aggregate principal amount of the Debentures
outstanding. Pursuant to this Section 7(c), the Institutional Trustee shall
not revoke any action previously authorized or approved by a vote of the
Holders of the Preferred Securities. Other than with respect to directing the
time, method and place of conducting any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
shall not take any action in accordance with the directions of the Holders of
the Common Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the
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purposes of United States federal income tax the Trust will not be classified
as other than a grantor trust on account of such action. If the Institutional
Trustee fails to enforce its rights under the Declaration, any Holder of Common
Securities may institute a legal proceeding directly against any Person to
enforce the Institutional Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Institutional Trustee or any other
Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to repay and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
8. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
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(b) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; provided, however, that where a consent under the Indenture
would require the consent of the holders of greater than a majority in
aggregate principal amount of the Debentures (a "Super Majority"), the
Institutional Trustee may only give such consent at the direction of the
Holders of at least the proportion in liquidation amount of the Securities
which the relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding; provided, further, that the Institutional
Trustee shall not take any action in accordance with the directions of the
Holders of the Securities under this Section 8(b) unless the Institutional
Trustee has obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be classified
as other than a grantor trust on account of such action.
9. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each
Holder of Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate liquidation
amount of all Securities outstanding unless, in relation to a payment, an Event
of Default under the Declaration has occurred and is continuing, in which case
any funds available to make such payment shall be paid first to each Holder of
the Preferred Securities pro rata according to the aggregate liquidation amount
of Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate
liquidation amount of Common Securities held by the relevant Holder relative to
the aggregate liquidation amount of all Common Securities outstanding.
10. Ranking.
The Preferred Securities rank pari passu and payment thereon shall be
made Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Debentures held
by the Institutional Trustee, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquida-
72
<PAGE> 78
tion, redemption and otherwise are subordinated to the rights to payment of the
Holders of the Preferred Securities.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request
to the Sponsor at its principal place of business.
73
<PAGE> 79
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT -
This Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Declaration and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. [55268U 203]
Certificate Evidencing Preferred Securities
of
MCN FINANCING III
____% Trust Originated Preferred Securities(SM) ("TOPrS"(SM))
(liquidation amount $50 per Preferred Security)
MCN FINANCING III, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that ______________
(the "Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the _____% Trust Originated Preferred Securities(SM) (liquidation
A1-1
<PAGE> 80
amount $50 per Preferred Security) (the "Preferred Securities"). The 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 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 _______, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Preferred Securities Guarantee to
the extent provided therein. The Sponsor will provide a copy of the
Declaration, the 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.
A1-2
<PAGE> 81
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this day
of March, 1997.
MCN FINANCING III
By:
--------------------------
Name:
Title: Regular Trustee
A1-3
<PAGE> 82
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a
rate per annum of ______% (the "Coupon Rate") of the stated liquidation amount
of $50 per Preferred Security, such rate being the rate of interest payable on
the Debentures to be held by the Institutional Trustee. Distributions in
arrears for more than one quarter 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 payable unless otherwise stated. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on March 31, June 30, September 30
and December 31 of each year, commencing on ______ __, 1997, to holders of
record one day prior to such payment date, which payment dates shall correspond
to the interest payment dates on the Debentures. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding beyond the date of maturity of the Debentures (each an "Extension
Period") and, as a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to
accrue with interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension Period. Payments of
accrued Distributions will be payable to Holders as they appear on the books
and records of the Trust on the first record date after the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Debenture Issuer may commence a new Extension
Period; provided that such Extension Period together with all such previous and
further extensions thereof may not exceed beyond the maturity date of the
Debenture.
The Preferred Securities shall be repayable as provided in the
Declaration.
A1-4
<PAGE> 83
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Trust
to repay $ stated liquidation amount of the within Preferred Security,
pursuant to its terms, on the "Put Option Exercise Date" first occurring after
the date of receipt of the within Preferred Security as specified below,
together with distributions thereon accrued to the date or repayment, to the
undersigned at:
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Declaration, a
new Preferred Security or Preferred Securities representing the remaining
stated liquidation amount of this Preferred Security.
For this Option to Elect Repayment to be effective, this Preferred Security
with the Option to Elect Repayment duly completed must be received by the Trust
at the Corporate Trust Office of the Institutional Trustee at Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration.
Dated: Signature: ________________
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Preferred Security in every
particular without alternation or enlargement or any change whatsoever.
A1-5
<PAGE> 84
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_______________________________________________________________________________
_______________________________________________________________________________
________________________________________________________________________ agent
to transfer this Preferred Security Certificate 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 Preferred Security
Certificate)
A1-6
<PAGE> 85
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
MCN FINANCING III
______% Trust Originated Common Securities
(liquidation amount $50 per Common Security)
MCN FINANCING III, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
_________________ (the "Holder") is the registered owner of common securities
of the Trust representing undivided beneficial interests in the assets of the
Trust designated the ______% Trust Originated Common Securities (liquidation
amount $50 per Common Security) (the "Common Securities"). The Common
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 Common
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 _______, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common Securities
as set forth in Annex I to the Declaration. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder
is entitled to the benefits of the Common Securities Guarantee to the extent
provided therein. The Sponsor will provide a copy of the Declaration, the
Common Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
A2-1
<PAGE> 86
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate
this day of March, 1997.
MCN FINANCING III
By:
-------------------------------
Name:
Title: Regular Trustee
A2-2
<PAGE> 87
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of ______% (the "Coupon Rate") of the stated liquidation amount of
$__ per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears
for more than one quarter 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 payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on March 31, June 30, September 30
and December 31 of each year, commencing on _______ __, 1997, to Holders of
record one day prior to such payment dates, which payment dates shall
correspond to the interest payment dates on the Debentures. The Debenture
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Debentures for a
period not exceeding beyond the date of maturity of the Debentures (each an
"Extension Period") and, as a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by applicable law) at
the Coupon Rate compounded quarterly during any such Extension Period.
Payments of accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the first record date after the end of
the Extension Period. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not exceed beyond the maturity date
of the Debentures.
The Common Securities shall be repayable as provided in the
Declaration.
A2 3
<PAGE> 88
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Insert assignee's social security or tax identification number)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints _____________________________________________________
______________________________________________________________________________
_______________________________ agent to transfer this Common Security
Certificate 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 Common Security
Certificate)
A2-4
<PAGE> 89
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE> 90
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE> 1
EXHIBIT 5.3
====================================
THIRD SUPPLEMENTAL INDENTURE
Dated as of March 19, 1997
between
MCN CORPORATION,
AS ISSUER
and
NBD BANK
AS TRUSTEE
=====================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS
<S> <C>
SECTION 1.1. Definition of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2. Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3. Form and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4. Global Debenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.5. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.6. Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 3.1. Extension of Interest Payment Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.2. Notice of Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.3. Limitation of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.4. Optional Repayment of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.5. Repayment Procedure for Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV
EXPENSES
SECTION 4.1. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.2. Payment Upon Resignation or Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V
NOTICE
SECTION 5.1. Notice by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI
FORM OF DEBENTURE
SECTION 6.1. Form of Debenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII
ORIGINAL ISSUE OF DEBENTURES
SECTION 7.1. Original Issue of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
ARTICLE VIII
MISCELLANEOUS
<S> <C> <C>
SECTION 8.1. Ratification of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.2. Trustee Not Responsible for Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.3. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.4. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>
ii
<PAGE> 4
THIRD SUPPLEMENTAL INDENTURE, dated as of March 19, 1997 (the "Third
Supplemental Indenture"), between MCN Corporation, a corporation duly organized
and existing under the laws of the State of Michigan, having its principal
office at 500 Griswold Street, Detroit, Michigan 48226 and doing business as
MCN Energy Group Inc., (the "Company"), and NBD Bank, a Michigan banking
corporation, as trustee (the "Trustee").
WHEREAS, the Company executed and delivered the indenture dated as
of September 1, 1994 (the "Base Indenture") as supplemented by a first
supplemental indenture, dated April 17, 1996 (the "First Supplemental
Indenture") and the second supplemental indenture (the "Second Supplemental
Indenture"), dated July 24, 1996, (the Base Indenture as so supplemented the
"Indenture"), to the Trustee to provide for the future issuance of the
Company's unsecured debentures, notes or other evidence of indebtedness (the
"Securities"), to be issued from time to time in one or more series as might be
determined by the Company under the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires
to provide for the establishment of a new series of its Securities to be known
as its 7-1/4% Junior Subordinated Debentures due 2002 (the "Debentures"), the
form and substance of such Debentures and the terms, provisions and conditions
thereof to be set forth as provided in the Indenture and this Third
Supplemental Indenture;
WHEREAS, MCN Financing III, a Delaware statutory business trust (the
"Trust"), has offered to the public $132,250,000 million aggregate liquidation
amount of its 7-1/4% Trust Originated Preferred Securities (the "Preferred
Securities"), representing preferred undivided beneficial interests in the
assets of the Trust and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the Company
of $4,090,250 million aggregate liquidation amount of its 7-1/4% Trust
Originated Common Securities, representing common undivided beneficial
interests in the assets of the Trust (the "Common Securities" and together with
the Preferred Securities, the "Trust Securities"), in $136,340,250 million
aggregate principal amount of the Debentures; and
WHEREAS, the Company has requested that the Trustee execute and
deliver this Third Supplemental Indenture,
<PAGE> 5
and all requirements necessary to make this Third Supplemental Indenture a
valid instrument in accordance with its terms, and to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed, and the execution and
delivery of this Third Supplemental Indenture has been duly authorized in all
respects:
NOW THEREFORE, in consideration of the purchase and acceptance of
the Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used
in this Third Supplemental Indenture;
(b) a term defined anywhere in this Third Supplemental Indenture
has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not
affect interpretation;
(e) the following terms have the meanings given to them in the
Declaration: (i) Business Day; (ii) Clearing Agency; (iii) Delaware Trustee;
(iv) Depositary; (v) Dissolution Tax Opinion; (vi) Preferred Security
Certificate; (vii) Preferred Security Guaranty; (viii) Pricing Agreement; (ix)
Institutional Trustee; (x) Regular Trustees; (xi) Special Event; (xii) Tax
Event; (xiii) Investment Company Event; and (xiv) Underwriting Agreement;
(f) the following terms have the meanings given to them in this
Section 1.1(f):
2
<PAGE> 6
"Additional Interest" shall have the meaning set forth in Section
2.5.
"Compounded Interest" shall have the meaning set forth in Section
3.1.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Debentures Repayment Price" shall have the meaning set forth in
Section 3.5.
"Declaration" means the Amended and Restated Declaration of Trust of
MCN Financing III, a Delaware statutory business trust, dated as of March 19,
1997.
"Deferred Interest" shall have the meaning set forth in Section 3.1.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance
with the Declaration, and the Debentures held by the Institutional Trustee are
to be distributed to the holders of the Trust Securities issued by the Trust
pro rata in accordance with the Declaration.
"Extended Interest Payment Period" shall have the meaning set forth
in Section 3.1.
"Global Debenture" shall have the meaning set forth in Section 2.4.
"Maturity Date" means the date on which the Debentures mature and on
which the principal shall be due and payable together with all accrued and
unpaid interest thereon including Compounded Interest and Additional Interest,
if any.
"Non Book-Entry Preferred Securities" shall have the meaning set
forth in Section 2.4.
"Put Option Exercise Date" shall have the meaning set forth in
Section 3.4.
"Purchase Contract Agreement" means the Purchase Contract Agreement,
dated as of March 25, 1997 among the
3
<PAGE> 7
Company and The First National Bank of Chicago, as purchase contract agent (the
"Purchase Contract Agent").
(g) the following terms have the meaning given to them in the
Purchase Contract Agreement: (i) Cash Settlement; (ii) Collateral Agent; (iii)
Collateral Settlement; (iv) Early Settlement Date; (v) Pledge Agreement; (vi)
Purchase Contract; and (vii) Purchase Contract Settlement Date.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount.
There is hereby authorized a series of Securities designated the
"7-1/4% Junior Subordinated Debentures due 2002", limited in aggregate principal
amount to $136,340,250 million, which amount shall be as set forth in any
written order of the Company for the authentication and delivery of Debentures
pursuant to Section 303 of the Indenture.
SECTION 2.2. Maturity. The Maturity Date will be May 16, 2002.
SECTION 2.3. Form and Payment.
Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without interest coupons. Principal and
interest on the Debentures will be payable, the transfer of such Debentures
will be registrable and such Debentures will be exchangeable for Debentures
bearing identical terms and provisions at the office or agency of the
Institutional Trustee; provided, however, that payment of interest may be made
at the option of the Company by check mailed to the Holder at such address as
shall appear in the Security Register. Notwithstanding the foregoing, so long
as the Holder of any Debentures is the Institutional Trustee or the Collateral
Agent, the payment of the principal of and interest (including Compounded
Interest and Additional Interest, if any) on such Debentures held by the
Institutional Trustee or the Collateral Agent will be made at such place and to
such account as may be designated in writing by the Institutional Trustee or
the Collateral Agent, as the case may be, prior to such payment.
4
<PAGE> 8
SECTION 2.4. Global Debenture.
(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be presented to
the Trustee by the Institutional Trustee in exchange for a global
Debenture in an aggregate principal amount equal to the aggregate
principal amount of all outstanding Debentures (a "Global Debenture"), to
be registered in the name of the Depositary, or its nominee, and
delivered by the Institutional Trustee to the Depositary for crediting to
the accounts of its participants pursuant to the instructions of the
Regular Trustees. The Company upon any such presentation shall execute a
Global Debenture in such aggregate principal amount and deliver the same
to the Trustee for authentication and delivery in accordance with the
Indenture and this Third Supplemental Indenture. Payments on the
Debentures issued as a Global Debenture will be made to the Depositary;
and
(ii) if any Preferred Securities are held in non
book-entry certificated form, the Debentures in certificated form may be
presented to the Trustee by the Institutional Trustee and any Preferred
Security Certificate which represents Preferred Securities other than
Preferred Securities held by the Clearing Agency or its nominee ("Non
Book-Entry Preferred Securities") will be deemed to represent beneficial
interests in Debentures presented to the Trustee by the Institutional
Trustee having an aggregate principal amount equal to the aggregate
liquidation amount of the Non Book-Entry Preferred Securities until such
Preferred Security Certificates are presented to the Security Registrar
for transfer or reissuance at which time such Preferred Security
Certificates will be cancelled and a Debenture, registered in the name of
the holder of the Preferred Security Certificate or the transferee of the
holder of such Preferred Security Certificate, as the case may be, with
an aggregate principal amount equal to the aggregate liquidation amount
of the Preferred Security Certificate cancelled, will be executed by the
Company and delivered to the Trustee for authentication and delivery in
accordance with the Indenture and this Third Supplemental Indenture. On
issue of such Debentures, Debentures with an equivalent aggregate
principal amount that were presented by the Institutional
5
<PAGE> 9
Trustee to the Trustee will be deemed to have been cancelled.
(b) Unless and until it is exchanged for the Debentures in
registered form, a Global Debenture may be transferred, in whole but not in
part, only to another nominee of the Depositary, or to a successor Depositary
selected or approved by the Company or to a nominee of such successor
Depositary.
(c) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the Depositary
for such series shall no longer be registered or in good standing under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, and a successor Depositary for such series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such condition, as the case may be, the Company will execute, and, subject
to Article III of the Indenture, the Trustee, upon written notice from the
Company, will authenticate and deliver the Debentures in definitive registered
form without coupons, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global Debenture in
exchange for such Global Debenture. In addition, the Company may at any time
determine that the Debentures shall no longer be represented by Global
Debenture. In such event the Company will execute, and subject to Section 301
of the Indenture, the Trustee, upon receipt of an Officers Certificate
evidencing such determination by the Company, will authenticate and deliver the
Debentures in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Debenture in exchange for such Global Debenture. Upon the
exchange of the Global Debenture for such Debentures in definitive registered
form without coupons, in authorized denominations, the Global Debenture shall
be cancelled by the Trustee. Such Debentures in definitive registered form
issued in exchange for the Global Debenture shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the
Depositary for delivery to the Persons in whose names such Securities are so
registered.
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<PAGE> 10
SECTION 2.5. Interest.
(a) Each Debenture will bear interest at the rate of 7-1/4% per
annum (the "Coupon Rate") from the original date of issuance until the
principal thereof becomes due and payable, and on any overdue principal and (to
the extent that payment of such interest is enforceable under applicable law)
on any overdue installment of interest at the Coupon Rate, compounded
quarterly, payable (subject to the provisions of Article IV) quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year (each,
an "Interest Payment Date," commencing on June 30, 1997), to the Person in
whose name such Debenture or any predecessor Debenture is registered, at the
close of business on the regular record date for such interest installment,
which, in respect of (i) Debentures of which the Institutional Trustee is the
Holder and the Preferred Securities are in book-entry only form or (ii) a
Global Debenture, shall be the close of business on the Business Day next
preceding that Interest Payment Date. Notwithstanding the foregoing sentence,
if (i) the Debentures are held by the Institutional Trustee and the Preferred
Securities are no longer in book-entry only form or (ii) the Debentures are not
represented by a Global Debenture, the Company may select a regular record date
for such interest installment which shall be any date at least one Business Day
before an Interest Payment Date.
(b) The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. Except as provided in
the following sentence, the amount of interest payable for any period shorter
than a full quarterly period for which interest is computed, will be computed
on the basis of the actual number of days elapsed per 30-day month. In the
event that any date on which interest is payable on the Debentures is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
(c) If, at any time while the Institutional Trustee or the
Collateral Agent is the Holder of any Debentures, the Trust or the
Institutional Trustee or the Collateral Agent is required to pay any taxes,
duties, assessments
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<PAGE> 11
or governmental charges of whatever nature (other than withholding taxes)
imposed by the United States, or any other taxing authority, then, in any case,
the Company will pay as additional interest ("Additional Interest") on the
Debentures held by the Institutional Trustee or the Collateral Agent, such
additional amounts as shall be required so that the net amounts received and
retained by the Trust and the Institutional Trustee or the Collateral Agent
after paying such taxes, duties, assessments or other governmental charges will
be equal to the amounts the Trust and the Institutional Trustee or the
Collateral Agent would have received had no such taxes, duties, assessments or
other government charges been imposed.
SECTION 2.6. Sinking Fund.
The Debentures are not entitled to the benefit of any sinking fund.
ARTICLE III
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 3.1. Extension of Interest Payment Period.
The Company shall have the right, at any time and from time to time
during the term of the Debentures, to defer payments of interest by extending
the interest payment period of such Debentures for a period not extending
beyond the date of maturity of the Debentures (the "Extended Interest Payment
Period"), during which Extended Interest Payment Period no interest shall be
due and payable. To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 3.1, will bear interest thereon at the
Coupon Rate compounded quarterly for each quarter of the Extended Interest
Payment Period ("Compounded Interest"). At the end of the Extended Interest
Payment Period, the Company shall pay all interest accrued and unpaid on the
Debentures, including any Additional Interest and Compounded Interest
(together, "Deferred Interest") that shall be payable to the Holders of the
Debentures in whose names the Debentures are registered in the Security
Register on the first record date after the end of the Extended Interest
Payment Period. Before the termination of any Extended Interest Payment
Period, the Company may further extend such period, provided that such period
together
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<PAGE> 12
with all such previous and further extensions thereof shall not exceed 20
consecutive quarters or extend beyond the maturity date of the Debentures.
Upon the termination of any Extended Interest Payment Period and upon the
payment of all Deferred Interest then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment Period,
except at the end thereof, but the Company may prepay at any time all or any
portion of the interest accrued during an Extended Interest Payment Period.
SECTION 3.2. Notice of Extension.
(a) If the Institutional Trustee or the Collateral Agent is the
only registered Holder of the Debentures at the time the Company selects an
Extended Interest Payment Period, the Company shall give written notice to the
Regular Trustees, the Institutional Trustee, the Collateral Agent, and the
Trustee of its selection of such Extended Interest Payment Period one Business
Day before the earlier of (i) the next succeeding date on which Distributions
on the Trust Securities issued by the Trust are payable, or (ii) the date the
Trust is required to give notice of the record date, or the date such
Distributions are payable, to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of the Preferred Securities issued
by the Trust, but in any event at least one Business Day before such record
date.
(b) If the Institutional Trustee or the Collateral Agent is not the
only Holder of the Debentures at the time the Company selects an Extended
Interest Payment Period, the Company shall give the Holders of the Debentures
and the Trustee written notice of its selection of such Extended Interest
Payment Period at least 10 Business Days before the next succeeding Interest
Payment Date.
(c) The quarter in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 3.2 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under
Section 3.1.
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<PAGE> 13
SECTION 3.3. Limitation of Transactions.
If (i) the Company shall exercise its right to defer payment of
interest as provided in Section 4.1, then (a) the Company shall not declare or
pay any dividends on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock (other than (i) purchases or acquisitions of shares of its common
stock in connection with the satisfaction by the Company of its obligations
under any employee benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of
such event requiring the Company to purchase shares of its common stock, (ii)
as a result of a reclassification of its capital stock or the exchange or
conversion of one class or series of its capital stock for another class or
series of its capital stock or, (iii) the purchase of fractional interests in
shares of its capital stock pursuant to the conversion or exchange provisions
of such capital stock or security being converted or exchanged) or make any
guarantee payment with respect thereto, (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company which rank pari passu with or
junior to the Debentures and (c) the Company shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Preferred
Security Guaranty).
SECTION 3.4. Optional Repayment of Debentures.
Each Holder of Debentures, including the Institutional Trustee and
the Collateral Agent, shall have the right (the "Put Option") to require the
Company to repay all or a portion (which portion must be $50 or any integral
multiple thereof) of the Debentures held by such Holder, on May 16, 2000, the
Purchase Contract Settlement Date (the "Put Option Exercise Date"), at a
repayment price equal to 100% of the principal amount thereof plus any accrued
and unpaid interest thereon, including Additional Interest, if any, to the date
of such repayment (the "Debentures Repayment Price").
SECTION 3.5. Repayment Procedure for Debentures.
(a) In order for the Debentures to be repaid on the Put Option
Exercise Date, the Company must receive at the Corporate Trust Office of the
Trustee in the City of
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<PAGE> 14
Detroit, Michigan, not less than 10 nor more than 30 days prior to the Put
Option Exercise Date, the Debentures to be repaid with the form entitled
"Option to Elect Repayment" on the reverse of or otherwise accompanying such
Debentures duly completed. Any such notice received by the Company shall be
irrevocable. All questions as to the validity, eligibility (including time of
receipt) and acceptance of the Debentures for repayment shall be determined by
the Company, whose determination shall be final and binding. Notwithstanding
the foregoing, so long as the Holder is the Institutional Trustee or the
Collateral Agent, and assuming prior notice to the Trustee, such Debentures may
be received at the Corporate Trust Office (as defined in the Declaration) of
the Institutional Trustee in the City of Wilmington, Delaware at any time prior
to 11:00 a.m., New York City time, on the Put Option Exercise Date in the form
and manner as may be designated by the Institutional Trustee or the Collateral
Agent and acceptable to the Trustee.
(b) Payment of the Debentures Repayment Price to Holders of
Debentures shall be made through the Trustee, subject to the Trustee's receipt
of payment from the Company in accordance with the terms of the Indenture.
Notwithstanding the foregoing, so long as the Holder of any Debentures
presented for repayment is the Institutional Trustee or the Collateral Agent,
the payment of the Debentures Repayment Price in respect of such Debentures
shall be made, either through the Trustee or the Company acting as Paying
Agent, no later than 12:00 noon, New York City time, on the Put Option Exercise
Date, by check or wire transfer, in immediately available funds, at such place
and to such account as may be designated by the Institutional Trustee or the
Collateral Agent, as the case may be. If the Trustee holds immediately
available funds sufficient to pay the Debentures Repayment Price of the
Debentures presented for repayment (or, if the Company is acting as Paying
Agent or the Institutional Trustee has received the Debentures Repayment
Price), then, immediately prior to the close of business on the Put Option
Exercise Date, such Debentures will cease to be outstanding and interest
thereon will cease to accrue, whether or not such Debentures have been received
by the Company, and all other rights of the Holder in respect of the
Debentures, including the Holder's right to require the Company to repay such
Debentures, shall terminate and lapse (other than the right to receive the
Debentures Repayment Price upon delivery of such Debentures but without
interest on such Debentures Repayment Price). Neither the
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<PAGE> 15
Institutional Trustee nor the Company will be required to register or cause to
be registered the transfer of any Debentures for which repayment has been
elected.
ARTICLE IV
EXPENSES
SECTION 4.1. Payment of Expenses.
In connection with the offering, sale and issuance of the Debentures
to the Institutional Trustee and in connection with the sale of the Trust
Securities by the Trust, the Company, in its capacity as borrower with respect
to the Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters payable
pursuant to the Underwriting Agreement and the Pricing Agreement and
compensation of the Trustee under the Indenture in accordance with the
provisions of Section 607 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust, the
offering, sale and issuance of the Trust Securities (including commissions to
the underwriters in connection therewith), the fees and expenses of the
Institutional Trustee and the Delaware Trustee, the costs and expenses relating
to the operation of the Trust, including without limitation, costs and expenses
of accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the acquisition, financing, and disposition of Trust assets);
(c) be primarily liable for any indemnification obligations arising
with respect to the Declaration; and
(d) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
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<PAGE> 16
SECTION 4.2. Payment Upon Resignation or Removal.
Upon termination of this Third Supplemental Indenture or the
Indenture or the removal or resignation of the Trustee pursuant to this Section
4.2, the Company shall pay to the Trustee all amounts accrued to the date of
such termination, removal or resignation. Upon termination of the Declaration
or the removal or resignation of the Delaware Trustee or the Institutional
Trustee, as the case may be, pursuant to Section 5.6 of the Declaration, the
Company shall pay to the Delaware Trustee or the Institutional Trustee, as the
case may be, all amounts accrued to the date of such termination, removal or
resignation.
ARTICLE V
NOTICE
SECTION 5.1. Notice by the Company.
The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article VI. Notwithstanding the
provisions of Article Fourteen of the Indenture or any other provision of the
Indenture and this Third Supplemental Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of Article Fourteen of the Indenture,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof from the Company or a holder or holders of Senior
Indebtedness or from any trustee therefor; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 601 of the
Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the
notice provided for in this Article 6 at least two Business Days prior to the
date upon which by the terms hereof any money may become payable for any
purpose (including, without limitation, the payment of the principal of (or
premium, if any) or interest on any Debenture), then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purposes for which
they
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<PAGE> 17
were received, and shall not be affected by any notice to the contrary that may
be received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 601 of the
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company, as the case may be (or a trustee on behalf of such
holder), to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of such Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article VI, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent to
the rights of such Person under this Article VI, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
ARTICLE VI
FORM OF DEBENTURE
SECTION 6.1. Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms:
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This
Debenture is a Global Debenture within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depositary or a nominee of a
Depositary. This Debenture is exchangeable for Debentures registered in the
name of a person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Debenture
(other than a transfer of this Debenture as a whole by the Depositary to a
nominee of the Deposi-
14
<PAGE> 18
tary or by a nominee of the Depositary to the Depositary or another nominee of
the Depositary) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.]
No. __________________
$_____________________
CUSIP No. ____________
15
<PAGE> 19
MCN CORPORATION
___% JUNIOR SUBORDINATED DEBENTURE
DUE 2002
MCN CORPORATION, a Michigan corporation (the "Company", doing
business as MCN Energy Group Inc., which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to ______________ or registered assigns, the principal
sum of _____________ Dollars ($___________) on ________, 2002, and to pay
interest on said principal sum from March __, 1997, or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on March 31, June 30, September 30 and December 31
of each year commencing June 30, 1997, at the rate of ___% per annum until the
principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum compounded quarterly. The
amount of interest payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than
a full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed per 30-day month. In the event that
any date on which interest is payable on this Debenture is not a Business Day,
then payment of interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. The interest installment so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
the Indenture, be paid to the person in whose name this Debenture (or one or
more Predecessor Securities, as defined in said Indenture) is registered at the
close of business on the regular record date for such interest installment,
which shall be the close of business on the business day next preceding such
Interest Payment Date. [IF PURSUANT TO THE PROVISIONS OF THE INDENTURE THE
DEBEN-
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<PAGE> 20
TURES ARE NO LONGER REPRESENTED BY A GLOBAL DEBENTURE -- which shall be the
close of business on the ____ business day next preceding such Interest
Payment Date.] Any such interest installment not punctually paid or
duly provided for shall forthwith cease to be payable to the registered Holders
on such regular record date and may be paid to the Person in whose name this
Debenture (or one or more Predecessor Securities) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the registered
Holders of this series of Debentures not less than 10 days prior to such
special record date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Debentures may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture. The principal of (and
premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Trustee maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
registered Holder at such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the Holder of this Debenture is the
Institutional Trustee or, if applicable, the Collateral Agent, the payment of
the principal of (and premium, if any) and interest on this Debenture will be
made at such place and to such account as may be designated in writing by the
Institutional Trustee or, if applicable, the Collateral Agent.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness and pari passu in right of
payment with the Company's other junior subordinated debentures, and this
Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Debenture, by accepting the same, (a) agrees to
and shall be bound by such provisions, (b) authorizes and directs the Trustee
on his or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes. Each Holder
hereof, by his or her acceptance hereof, hereby
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<PAGE> 21
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by or on behalf of the Trustee.
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<PAGE> 22
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated ___________________
MCN CORPORATION
By:
______________________________
Name:
Title
Attest:
By: _____________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series of Securities described
in the within-mentioned Indenture.
Dated ___________________ NBD BANK
as Trustee
By ______________________________
Authorized Signatory
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<PAGE> 23
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Securities of
the Company (herein sometimes referred to as the "Securities"), specified in
the Indenture, all issued or to be issued in one or more series under and
pursuant to an Indenture dated as of September 1, 1994, duly executed and
delivered between the Company and NBD Bank, as Trustee (the "Trustee") (as
supplemented by a First Supplemental Indenture, dated April 17, 1996, and a
Second Supplemental Indenture, dated July 24, 1996, as so supplemented, the
"Base Indenture"), as supplemented by a Third Supplemental Indenture dated as
of March 19, 1997, between the Company and the Trustee (the Base Indenture as
so supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the Holders of the Securities. By the terms of the
Indenture, the Securities are issuable in series that may vary as to amount,
date of maturity, rate of interest and in other respects as provided in the
Indenture. This series of Securities is limited in aggregate principal amount
as specified in said Third Supplemental Inden- ture.
The Debentures are not entitled to the benefit of any sinking fund.
The Holder of this Debenture, including the Institutional Trustee
or, if applicable, the Collateral Agent, shall have the right (the "Put
Option") to require the Company to repay all or a portion (which portion must
be $50 or any integral multiple thereof) of this Debenture on May 16, 2000, the
Purchase Contract Settlement Date (the "Put Option Exercise Date") at a
repayment price equal to 100% of the principal amount thereof plus any accrued
but unpaid interest, including Additional Interest, if any, to the date of such
repayment (the "Debentures Repayment Price"). In order for the Debentures to
be repaid on the Put Option Exercise Date, the Company must receive at the
Corporate Trust Office of the Trustee in the City of Detroit, Michigan, not
less than 10 nor more than 30 days prior to the Put Option Exercise Date, the
Debentures to be repaid with the form entitled "Option to Elect repayment"
hereon duly completed. Any such notice received by the Company shall be
irrevocable. All questions as to the validity, eligibility (including time of
receipt) and accep-
20
<PAGE> 24
tance of the Debentures for repayment shall be determined by the Company, whose
determination shall be final and binding. Notwithstanding the foregoing, so
long as the Holder is the Institutional Trustee or the Collateral Agent, and
assuming prior notice to the Trustee, this Debenture may be received at the
Corporate Trust Office (as defined in the Declaration) of the Institutional
Trustee at any time prior to 11:00 a.m., New York City time, on the Put Option
Exercise Date in the form and manner as may be designated by the Institutional
Trustee or the Collateral Agent and acceptable to the Trustee.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the
time outstanding, as defined in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Debentures; provided, however, that no such supplemental indenture shall
(i) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Debentures of any series or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any premium payable upon the redemption thereof,
without the consent of the Holder of each Debenture so affected, or (ii) reduce
the aforesaid percentage of Debentures, the Holders of which are required to
consent to any such supplemental indenture, without the consent of the Holders
of each Debenture then outstanding and affected thereby. The Indenture also
contains provisions permitting the Holders of a majority in aggregate principal
amount of the Securities of any series at the time outstanding affected
thereby, on behalf of all of the Holders of the Debentures of such series, to
waive any Default or Event of Default with respect to such series, and its
consequences, except a Default or Event of Default in the payment of the
principal of or premium, if any, or interest
21
<PAGE> 25
on any of the Securities of such series. Any such consent or waiver by the
registered Holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Debenture and of any Debenture issued in exchange
therefor or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at
the rate and in the money herein prescribed.
So long as the Company is not in default in the payment of interest
on the Debentures, the Company shall have the right at any time during the term
of the Debentures and from time to time to extend the interest payment period
of such Debentures for a period not exceeding beyond the maturity date of the
Debentures (an "Extended Interest Payment Period"), at the end of which period
the Company shall pay all interest then accrued and unpaid (together with the
interest thereon at the rate specified for the Debentures to the extent that
payment of such interest is enforceable under applicable law). In the event
that the Company exercises this right, then (a) the Company shall not declare
or pay dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock (other than (i) purchases or acquisitions of shares of its Common Stock
in connection with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase shares of the Company's Common Stock, (ii) as
a result of a reclassification 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 or (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged) or make any guarantee payments with respect to the
foregoing), (b) the Company shall not make any payment
22
<PAGE> 26
of interest, principal or premium, if any, on or repay, repurchase or redeem
any debt securities (including guarantees) issued by the Company that rank pari
passu with or junior to such Debentures and (c) the Company shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Preferred Securities Guarantee). Prior to the termination of any such Extended
Interest Payment Period, the Company may further extend the interest payment
period; provided, however, that such Extended Interest Payment Period, together
with all such previous and further extensions thereof, may not exceed beyond
the maturity date of the Debentures.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered Holder
hereof on the Security Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Trustee
in the City of Detroit and State of Michigan accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or
the Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Debentures of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and the Security
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Security Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator,
23
<PAGE> 27
stockholder, officer or director, past, present or future, as such, of the
Company or of any predecessor or successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Indenture imposes certain limitations on the ability of the
Company to, among other things, merge or consolidate with any other Person or
sell, assign, transfer or lease all or substantially all of its properties or
assets. All such covenants and limitations are subject to a number of
important qualifications and exceptions. The Company must report periodically
to the Trustee on compliance with the covenants in the Indenture.
The Debentures of this series are issuable only in registered form
without coupons in denominations of $50 and any integral multiple thereof.
This Global Debenture is exchangeable for Debentures in definitive form only
under certain limited circumstances set forth in the Indenture. Debentures of
this series so issued are issuable only in registered form without coupons in
denominations of $50 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Debentures of
this series so issued are exchangeable for a like aggregate principal amount of
Debentures of this series of a different authorized denomination, as requested
by the Holder surrendering the same.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
ARTICLE VII
ORIGINAL ISSUE OF DEBENTURES
SECTION 7.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of $136,340,250 may,
upon execution of this Third Supplemental Indenture, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Debentures to or upon the written order
of the Company, signed by its Chairman, its
24
<PAGE> 28
Vice Chairman, its President, or any Vice President and its Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary, without any further
action by the Company.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Ratification of Indenture.
The Indenture, as supplemented by this Third Supplemental Indenture,
is in all respects ratified and confirmed, and this Third Supplemental
Indenture shall be deemed part of the Indenture in the manner and to the extent
herein and therein provided.
SECTION 8.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
Third Supplemental Indenture.
SECTION 8.3. Governing Law.
This Third Supplemental Indenture and each Debenture shall be deemed
to be a contract made under the internal laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of said State.
SECTION 8.4. Separability.
In case any one or more of the provisions contained in this Third
Supplemental Indenture or in the Debentures shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Third
Supplemental Indenture or of the Debentures, but this Third Supplemental
Indenture and the Debentures shall be construed as if such invalid or illegal
or unenforceable provision had never been contained herein or therein.
25
<PAGE> 29
SECTION 8.5. Counterparts.
This Third Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
26
<PAGE> 30
IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, on the date or dates indicated in
the acknowledgements and as of the day and year first above written.
MCN CORPORATION
By /s/ Sebastian Coppola
----------------------------
Name: Sebastian Coppola
Title: Senior Vice President
and Treasurer
Attest:
By: /s/ Daniel L. Schiffer
--------------------------
Daniel L. Schiffer
Senior Vice President,
General Counsel and Secretary
NBD BANK
as Trustee
By /s/ James D. Khami
---------------------------
Name: James D. Khami
Title: Trust Officer
Attest:
By: /s/ Daniel T. Lis
------------------------
Daniel T. Lis
<PAGE> 1
EXHIBIT 5.4
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
MCN Financing III
Dated as of March 19, 1997
====================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
<S> <C> <C>
SECTION 1.1 Definitions and Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.3 Reports by the Preferred Guarantee
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustees . . . . . . . . . . . . . . . . . . . . 12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
<S> <C> <C>
SECTION 6.1 Limitation of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.2 Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9.4 Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
ii
<PAGE> 4
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of March 19, 1997, is executed and delivered by MCN Corporation, a
Michigan corporation doing business as MCN Energy Group Inc. (the "Guarantor"),
and Wilmington Trust Company, as trustee (the "Preferred Guarantee Trustee"),
for the benefit of the Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of MCN Financing III, a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of March 19, 1997, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof 2,645,000 preferred securities, liquidation
amount $50 per preferred security, having an aggregate liquidation amount of
$132,250,000 designated the 7 1/4% Trust Originated Preferred Securities (the
"Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth
herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
<PAGE> 5
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred
Securities Guarantee as modified, supplemented or amended
from time to time;
(d) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Preferred Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Preferred Securities Guarantee,
unless otherwise defined in this Preferred Securities
Guarantee or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Business Day" means any day other than a day on which banking
institutions in the City of New York, New York are authorized or required by
any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
2
<PAGE> 6
"Corporate Trust Office" means the office of the Preferred
Guarantee Trustee at which the corporate trust business of the Preferred
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Agreement is located at
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attention: Corporate Trust Administration.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt
securities of the Guarantor designated the 7 1/4% Junior Subordinated
Debentures due 2002 held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by the Issuer: (i) any accrued and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Preferred
Securities to the extent the Issuer shall have funds available therefor, (ii)
the repayment price, including all accrued and unpaid Distributions to the date
of repayment (the "Repayment Price") to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities presented for
repayment by the Holders, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with the distribution of Debentures to the Holders in exchange for Preferred
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, to the extent the Issuer shall
have funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer
(in either case, the "Liquidation Distribution"). If an event of default under
the Indenture has occurred and is continuing, the rights of holders of the
Common Securities to receive payments under the Common Securities Guarantee
Agreement are subordinated to the rights of Holders of Preferred Securities to
receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
3
<PAGE> 7
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of September 1, 1994,
among the Guarantor (the "Debenture Issuer") and NBD Bank, N.A., as trustee,
and any indenture supplemental thereto pursuant to which certain subordinated
debt securities of the Debenture Issuer are to be issued to the Institutional
Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
4
<PAGE> 8
"Preferred Guarantee Trustee" means Wilmington Trust Company, until
a Successor Preferred Guarantee Trustee has been appointed and has accepted
such appointment pursuant to the terms of this Preferred Securities Guarantee
and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred
Guarantee Trustee, any officer within the Corporate Trust Office of the
Preferred Guarantee Trustee, including any vice-president, any assistant
vice-president, any assistant secretary, the treasurer, any assistant treasurer
or other officer of the Corporate Trust Office of the Preferred Guarantee
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee
with a list, in such form as the Preferred Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the Preferred Securities
("List of Holders") as of such date, (i) within 1 Business Day after January 1
and July 1 of each year, and (ii) at any other time within 30 days of receipt
by the Guarantor of a written request for a List of Holders as of a date no
more than 14 days before such List of Holders is given to the Preferred
Guarantee Trustee provided, that the
5
<PAGE> 9
Guarantor shall not be obligated to provide such List of Holders at any time
the List of Holders does not differ from the most recent List of Holders given
to the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities such reports
as are required by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture Act. The
Preferred Guarantee Trustee shall also comply with the requirements of Section
313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
6
<PAGE> 10
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the
Preferred Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the
Preferred Guarantee Trustee charged with the administration of the Declaration
shall have obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in
this Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee
shall automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Preferred Guarantee Trustee has occurred and
7
<PAGE> 11
is continuing, the Preferred Guarantee Trustee shall enforce this Preferred
Securities Guarantee for the benefit of the Holders of the Preferred
Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred
Securities Guarantee, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of
this Preferred Securities Guarantee, and the Preferred Guarantee
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Preferred Securities Guarantee, and no implied covenants or
obligations shall be read into this Preferred Securities Guarantee
against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Preferred Guarantee
Trustee and conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to
be furnished to the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall be under a duty to examine the same to
determine
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whether or not they conform to the requirements of this Preferred
Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the performance of any
of its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured
to it under the terms of this Preferred Securities Guarantee or
indemnity, reasonably satisfactory to the Preferred Guarantee Trustee,
against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by a
Direction or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established
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before taking, suffering or omitting any action hereunder, the Preferred
Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel, and
the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of
its employees. The Preferred Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this
Preferred Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred
Guarantee Trustee, against the costs, expenses (including attorneys' fees
and expenses and the expenses of the Preferred Guarantee Trustee's
agents, nominees or custodians) and liabilities that might be incurred by
it in complying with such request or direction, including such reasonable
advances as may be requested by the Preferred Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
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<PAGE> 14
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys, and
the Preferred Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone
shall be sufficient and effective to perform any such action. No third
party shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which
shall be conclusively evidenced by the Preferred Guarantee Trustee's or
its agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i)
may request instructions from the Holders of a Majority in liquidation
amount of the Preferred Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively relying on or
acting in accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not
assume any responsibility for their correctness. The Preferred Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Preferred Securities Guarantee.
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ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Guarantee Trustee and delivered to the
Guarantor.
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(c) The Preferred Guarantee Trustee appointed to office shall
hold office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such
appointment by instrument in writing executed by such Successor Preferred
Guarantee Trustee and delivered to the Guarantor and the resigning Preferred
Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts accrued to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any
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right to require a proceeding first against the Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities to
be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Repayment Price, Liquidation Distribution or
any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising
out of, or in connection with, the Preferred Securities (other than an
extension of time for payment of Distributions, Repayment Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Debentures or any extension of the maturity date
of the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of
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<PAGE> 18
a guarantor, it being the intent of this Section 5.3 that the obligations of
the Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this
Preferred Securities Guarantee, any Holder of Preferred Securities may
institute a legal proceeding directly against the Guarantor to enforce its
rights under this Preferred Securities Guarantee, without first instituting a
legal proceeding against the Issuer, the Preferred Guarantee Trustee or any
other Person. Notwithstanding the foregoing, if the Guarantor has failed to
make a Guarantee Payment, a holder of Preferred Securities may directly
institute a proceeding against the Guarantor for enforcement of the Preferred
Security Guarantee for such payment. The Guarantor waives any right or remedy
to require that any action on this Preferred Securities Guarantee be brought
first against the Issuer or any other person or entity before proceeding
directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities
Guarantee; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Preferred Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Preferred Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
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<PAGE> 19
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there
shall have occurred an Event of Default or an event of default under the
Declaration, then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of its common stock in connection with the
satisfaction by the Guarantor of its obligations under any employee benefit
plans or the satisfaction by the Guarantor of its obligations pursuant to any
contract or security outstanding on the date of such event requiring the
Guarantor to purchase shares of its common stock, (ii) as a result of a
reclassification of its capital stock or the exchange or conversion of one
class or series of its capital stock for another class or series of its capital
stock or, (iii) the purchase of fractional interests in shares of its capital
stock pursuant to the conversion or exchange provisions of such capital stock
or security being converted or exchanged) or make any guarantee payment with
respect thereto, (b) the Guarantor shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Guarantor which rank pari passu with or junior to the
Debentures or any other junior subordinated debentures issued by the Guarantor
and the Guarantor shall not make any guarantee payments with respect to the
foregoing (other than the Guaranty Payments).
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right
of payment to all other liabilities of the Guarantor except those liabilities
of the Guarantor made pari passu or subordinate by their terms, (ii) pari passu
with the
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most senior preferred or preference stock now or hereafter issued by the
Guarantor and with any guarantee now or hereafter entered into by the Guarantor
in respect of any preferred or preference stock of any Affiliate of the
Guarantor, and (iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Repayment Price of all Preferred Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the Preferred
Securities or (iii) upon full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing,
this Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except
that an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts perti-
17
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nent to the existence and amount of assets from which Distributions to Holders
of Preferred Securities might properly be paid.
SECTION 8.2 Indemnification
(a) To the fullest extent permitted by applicable law, the
Guarantor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by reason
of any act or omission performed or omitted by such Indemnified Person in good
faith in accordance with this Guarantee Agreement and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Guarantee Agreement, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, reasonable
expenses (including legal fees) incurred by an Indemnified person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Guarantor of an undertaking by
or on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 8.2(a).
(c) The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of the Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred
Securities Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount (including the stated
amount that would be paid on redemption, liquidation or other-
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wise, plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all the outstanding Preferred Securities. The
provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders of the Preferred Securities):
MCN Energy Group Inc.
500 Griswold Street
Detroit, MI 48226
Attention: Office of Treasurer
(c) If given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of
the Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
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SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
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<PAGE> 24
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
MCN CORPORATION, as Guarantor
By: /s/ Sebastian Coppola
------------------------------
Name: Sebastian Coppola
Title: Senior Vice President
and Treasurer
WILMINGTON TRUST COMPANY,
as Preferred Guarantee Trustee
By: /s/ Denise M. Geran
-------------------------------
Name: Denise M. Geran
Title: Financial Services
Officer
<PAGE> 1
EXHIBIT 5.5
------------------------------------------------------
------------------------------------------------------
MCN CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS PURCHASE CONTRACT AGENT
---------------------
PURCHASE CONTRACT AGREEMENT
---------------------
DATED AS OF MARCH 25, 1997
-----------------------------------------------------
-----------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
Definitions and Other Provisions
of General Applications . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Compliance Certificates and Opinions . . . . . . . . . . . . 12
Section 1.3. Form of Documents Delivered to Agent . . . . . . . . . . . . 13
Section 1.4. Acts of Holders; Record Dates . . . . . . . . . . . . . . . 14
Section 1.5. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.6. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . 17
Section 1.7. Effect of Headings and Table of Contents . . . . . . . . . . 18
Section 1.8. Successors and Assigns . . . . . . . . . . . . . . . . . . . 18
Section 1.9. Separability Clause . . . . . . . . . . . . . . . . . . . . 18
Section 1.10. Benefits of Agreement . . . . . . . . . . . . . . . . . . . 18
Section 1.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1.13. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1.14. Inspection of Agreement . . . . . . . . . . . . . . . . . . 20
ARTICLE II
Certificate Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
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<TABLE>
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<S> <C> <C>
Section 2.1. Forms of Certificates Generally . . . . . . . . . . . . . . 20
Section 2.2. Form of Agent's Certificate of Authentication . . . . . . . 21
ARTICLE III
The Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.1. Title and Terms; Denominations . . . . . . . . . . . . . . . 21
Section 3.2. Rights and Obligations Evidenced by the Certificates . . . . 22
Section 3.3. Execution, Authentication, Delivery and Dating . . . . . . . 23
Section 3.4. Temporary Certificates . . . . . . . . . . . . . . . . . . . 24
Section 3.5. Registration; Registration of Transfer and Exchange . . . . 25
Section 3.6. Book-Entry Interests . . . . . . . . . . . . . . . . . . . . 27
Section 3.7. Notices to Holders . . . . . . . . . . . . . . . . . . . . . 28
Section 3.8. Appointment of Successor Clearing Agency . . . . . . . . . . 28
Section 3.9. Definitive Certificates . . . . . . . . . . . . . . . . . . 28
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates . . . . . 29
Section 3.11. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . 30
Section 3.12. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.13. Substitution of Securities . . . . . . . . . . . . . . . . . 31
Section 3.14. Reestablishment of Income PRIDES . . . . . . . . . . . . . . 33
Section 3.15. Transfer of Collateral upon Occurrence
of Termination Event . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
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Section 3.16. No Consent to Assumption . . . . . . . . . . . . . . . . . . 35
ARTICLE IV
The Preferred Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 4.1. Payment of Distribution; Rights to Distributions Preserved . 35
Section 4.2. Notice and Voting . . . . . . . . . . . . . . . . . . . . . 37
Section 4.3. Tax Event; Investment Company Event . . . . . . . . . . . . 37
ARTICLE V
The Purchase Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.1. Purchase of Shares of Common Stock . . . . . . . . . . . . . 38
Section 5.2. Contract Adjustment Payments . . . . . . . . . . . . . . . . 40
Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments . 42
Section 5.4. Payment of Purchase Price . . . . . . . . . . . . . . . . . 43
Section 5.5. Issuance of Shares of Common Stock . . . . . . . . . . . . . 46
Section 5.6. Adjustment of Settlement Rate . . . . . . . . . . . . . . . 47
Section 5.7. Notice of Adjustments and Certain Other Events . . . . . . . 54
Section 5.8. Termination Event; Notice . . . . . . . . . . . . . . . . . 55
Section 5.9. Early Settlement . . . . . . . . . . . . . . . . . . . . . . 55
Section 5.10. No Fractional Shares . . . . . . . . . . . . . . . . . . . . 58
Section 5.11. Charges and Taxes . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE VI
Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
</TABLE>
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Section 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock . . . . . 59
Section 6.2. Restoration of Rights and Remedies . . . . . . . . . . . . . 60
Section 6.3. Rights and Remedies Cumulative . . . . . . . . . . . . . . . 60
Section 6.4. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . 60
Section 6.5. Undertaking for Costs . . . . . . . . . . . . . . . . . . . 60
Section 6.6. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . 61
ARTICLE VII
The Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 7.1. Certain Duties and Responsibilities . . . . . . . . . . . . 61
Section 7.2. Notice of Default . . . . . . . . . . . . . . . . . . . . . 63
Section 7.3. Certain Rights of Agent . . . . . . . . . . . . . . . . . . 63
Section 7.4. Not Responsible for Recitals or Issuance of Securities . . . 64
Section 7.5. May Hold Securities . . . . . . . . . . . . . . . . . . . . 64
Section 7.6. Money Held in Custody . . . . . . . . . . . . . . . . . . . 64
Section 7.7. Compensation and Reimbursement . . . . . . . . . . . . . . . 65
Section 7.8. Corporate Agent Required;
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.9. Resignation and Removal; Appointment of Successor . . . . . 66
Section 7.10. Acceptance of Appointment by
Successor . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.11. Merger, Conversion, Consolidation
or Succession to Business . . . . . . . . . . . . . . . . . 68
</TABLE>
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Section 7.12. Preservation of Information; Communications to Holders . . . 68
Section 7.13. No Obligations of Agent . . . . . . . . . . . . . . . . . . 69
Section 7.14. Tax Compliance . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE VII
Supplemental Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.1. Supplemental Agreements Without Consent of Holders . . . . . 70
Section 8.2. Supplemental Agreements with Consent of Holders . . . . . . 71
Section 8.3. Execution of Supplemental Agreements . . . . . . . . . . . . 72
Section 8.4. Effect of Supplemental Agreements . . . . . . . . . . . . . 73
Section 8.5. Reference to Supplemental Agreements . . . . . . . . . . . . 73
ARTICLE IX
Consolidation, Merger, Sale or Conveyance . . . . . . . . . . . . . . . . . . 73
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions . . . . . . . . . 73
Section 9.2. Rights and Duties of Successor Corporation . . . . . . . . . 74
Section 9.3. Opinion of Counsel to Agent . . . . . . . . . . . . . . . . 75
ARTICLE X
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 10.1. Performance Under Purchase Contracts . . . . . . . . . . . . 75
Section 10.2. Maintenance of Office or Agency . . . . . . . . . . . . . . 75
Section 10.3. Company to Reserve Common Stock . . . . . . . . . . . . . . 76
</TABLE>
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Section 10.4. Covenants as to Common Stock . . . . . . . . . . . . . . . . 76
Section 10.5. Statements of Officers of the Company as to Default . . . . 76
</TABLE>
EXHIBIT A Form of Income PRIDES Certificate
EXHIBIT B Form of Growth PRIDES Certificate
EXHIBIT C Instruction to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
vi
<PAGE> 8
PURCHASE CONTRACT AGREEMENT, dated as of March 25, 1997, between MCN
Corporation, a Michigan corporation, doing business as MCN Energy Group Inc.
(the "Company"), and The First National Bank of Chicago, a national banking
association, acting as purchase contract agent for the Holders of Securities
from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, 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
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
<PAGE> 9
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) 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;
(d) the following terms have the meanings given to them in the
Declaration: (i) Indenture, (ii) Investment Company Event; (iii) Liquidation
Distribution; and (iv) Tax Event; and
(e) the following terms have the meanings given to them in this
Section 1.1(e).
"Act" when used with respect to any Holder, has the meaning specified
in Section 1.4.
"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" with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means the Person named as the "Agent" in the first paragraph
of this instrument until a successor Agent shall have become such pursuant to
the applicable provisions of this Agreement, and thereafter "Agent" shall mean
such Person.
"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 Market Value" has the meaning specified in Section 5.1.
2
<PAGE> 10
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person, who is the beneficial owner of such Book-Entry Interest, as reflected
on the books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"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 Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day which is not a Saturday or Sunday or a
day on which banking institutions in New York City (in the State of New York)
are permitted or required by any applicable law to close.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth PRIDES
Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name or in the name of a nominee of
that organization, shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Securities.
3
<PAGE> 11
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Price" has the meaning specified in Section 3.13.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means The 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.
"Collateral Substitution" has the meaning specified in Section 3.13.
"Common Stock" means the Common Stock, par value $.01 per share, of
the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
"Contract Adjustment Payments" means the fee payable by the Company in
respect of each Purchase Contract, equal to 3/4% per annum of the Stated
Amount, computed on the basis of a 360 day year of twelve 30 day months, plus
any Deferred Contract Adjustment Payments accrued pursuant to Section 5.2.
"Corporate Trust Office" means the principal corporate trust office of
the Agent at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at One First
National Plaza, Suite 0126, Chicago, Illinois 60670- 0126, Attention: Corporate
Trust Services Division, except that for purposes of Section 10.2, such term
shall mean the office or agency of the Agent in the Borough of Manhattan, the
City of New York, which office at the date
4
<PAGE> 12
hereof is located at 14 Wall Street, Eighth Floor, New York, New York 10005.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Declaration" means the Amended and Restated Declaration of Trust of
MCN Financing III, dated March 19, 1997, among the Company, as the sponsor, the
trustees named therein and the holders from time to time of individual
beneficial interests in the assets of the Trust.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC until another Clearing Agency
becomes its successor.
"DTC" means the Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Global Certificate" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Depositary or a nominee
thereof.
5
<PAGE> 13
"Global Preferred Security Certificate" means a certificate evidencing
the rights and obligations of a holder in respect of the number of Preferred
Securities specified on such certificate and which is registered in the name of
a Clearing Agency or a nominee thereof.
"Growth PRIDES" means, following the substitution of one or more
Treasury Securities for Preferred Securities as collateral to secure a holder's
obligations under a Purchase Contract, the collective rights and obligations of
a holder of a Growth PRIDES Certificate in respect of such Treasury Securities,
subject to the Pledge thereof, and the related Purchase Contract.
"Growth PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth PRIDES specified
on such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Holder," when used with respect to a Security, means a Person in
whose name the Security evidenced by an Income PRIDES Certificate and/or a
Growth PRIDES Certificate is registered in the related Income PRIDES Register
and/or the Growth PRIDES Register, as the case may be.
"Income PRIDES" means the collective rights and obligations of a
Holder of an Income PRIDES Certificate in respect of a Preferred Security,
subject to the Pledge thereof, and a related Purchase Contract.
"Income PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Income PRIDES specified
on such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Indenture" has the meaning set forth in Section 1.1 of the
Declaration.
6
<PAGE> 14
"Indenture Trustee" means NBD Bank, N.A. (now known as NBD Bank), a
Michigan Banking Corporation, as trustee under the Indenture, or any successor
thereto.
"Institutional Trustee" means Wilmington Trust Company, as
institutional trustee under the Declaration, or any successor thereto that is a
financial institution unaffiliated with the Company.
"Investment Company Event" has the meaning set forth in Annex I of the
Declaration.
"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 Agent.
"Junior Subordinated Debentures" means the series of junior
subordinated debentures of the Company designated the 7-1/4% Junior
Subordinated Debentures due May 16, 2002, to be issued under the Indenture as
of the date hereof.
"Liquidation Distribution" has the meaning set forth in Annex I of the
Declaration.
"NYSE" has the meaning specified in Section 5.1.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, any Vice Chairman of the Board, 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 Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company and who shall be
reasonably acceptable to the Agent.
"Outstanding Securities," with respect to any Income PRIDES and/or
Growth PRIDES, means, as of the date of determination, all Income PRIDES and/or
Growth PRIDES evidenced by Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
7
<PAGE> 15
(i) If a Termination Event has occurred, (A) Growth PRIDES
and (B) Income PRIDES for which the Stated Amount of the underlying
Preferred Security or a Liquidation Distribution in respect of such
Preferred Security has been theretofore deposited with the Agent in
trust for the Holders of such Income PRIDES;
(ii) Income PRIDES and Growth PRIDES evidenced by
Certificates theretofore cancelled by the Agent or delivered to the
Agent for cancellation or deemed cancelled pursuant to the provisions
of this Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced by
Certificates in exchange for or in lieu of which other Certificates
have been authenticated, executed on behalf of the Holder and
delivered pursuant to this Agreement, other than any such Certificate
in respect of which there shall have been presented to the Agent proof
satisfactory to it that such Certificate is held by a bona fide
purchaser in whose hands the Income PRIDES or Growth PRIDES evidenced
by such Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Income PRIDES or Growth PRIDES have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Income PRIDES or
Growth PRIDES 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 Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Income PRIDES or
Growth PRIDES which a Responsible Officer of the Agent knows to be so owned
shall be so disregarded. Income PRIDES or Growth PRIDES so owned which have
been pledged in good faith may be regarded as Outstanding Securities if the
pledgee establishes to the satisfaction of the Agent the pledgee's right so to
act with respect to such Income PRIDES or Growth PRIDES and that the pledgee is
not the Company or any Affiliate of the Company.
"Payment Date" means each March 31, June 30, September 30, and
December 31, commencing June 30, 1997.
8
<PAGE> 16
"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.
"Permitted Investments" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Pledge" means the pledge under the Pledge Agreement of the Preferred
Securities or the Treasury Securities, in each case constituting a part of the
Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent and the Agent, on its
own behalf and as attorney-in-fact for the Holders from time to time of the
Securities.
"Predecessor Certificate" means a Predecessor Income PRIDES
Certificate or a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth
PRIDES Certificate means every previous Growth PRIDES Certificate evidencing
all or a portion of the rights and obligations of the Company and the Holder
under the Growth PRIDES evidenced thereby; and, for the purposes of this
definition, any Growth PRIDES Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Growth PRIDES Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated, destroyed, lost
or stolen Growth PRIDES Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income
PRIDES Certificate means every previous Income PRIDES Certificate evidencing
all or a portion of the rights and obligations of the Company and the Holder
under the Income PRIDES evidenced thereby; and, for the purposes of this
definition, any Income PRIDES Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Income PRIDES Certificate shall be deemed to evidence the same rights
and obligations of the Company
9
<PAGE> 17
and the Holder as the mutilated, destroyed, lost or stolen Income PRIDES
Certificate.
"Preferred Securities" means the 7-1/4% Trust Originated Preferred
Securities of the Trust, each having a liquidation amount of $50, representing
preferred undivided beneficial interests in the assets of the Trust.
"Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Purchase Contract," when used with respect to any Security, means the
contract obligating the Company to (i) sell and the Holder of such Security to
purchase Common Stock and (ii) pay the Holder Contract Adjustment Payments, on
the terms and subject to the conditions set forth in Article Five hereof.
"Purchase Contract Settlement Date" means May 16, 2000.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Record Date" for the distribution and Contract Adjustment Payments
payable on any Payment Date means, as to any Global Certificate, the Business
Day next preceding such Payment Date, and as to any other Certificate, the 15th
day of the month preceding such Payment Date.
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
"Registrar" means the Income PRIDES Registrar and the Growth PRIDES
Registrar.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"Repayment Price" means, with respect to a Preferred Security, the
Stated Amount plus any accrued and unpaid
10
<PAGE> 18
distributions thereon to the date of repayment (subject to the rights of
holders of record on the relevant record date to receive distributions due on a
Payment Date).
"Responsible Officer," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"Security" means an Income PRIDES or a Growth PRIDES.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $50.
"Tax Event" has the meaning set forth in Annex I of the Declaration.
"Termination Date" means the date, if any, on which a Termination
Event occurs.
"Termination Event" means the occurrence of any of the following
events: (i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Company
or any other similar applicable Federal or State law, and, unless such
judgment, decree or order shall have been entered within 60 days prior to the
Purchase Contract Settlement Date, such decree or order shall have continued
undischarged and unstayed for a period of 60 days; or (ii) a judgment, decree
or court order 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 judgment, decree or order shall have been entered within 60 days
prior to the Purchase Contract Settlement Date, such judgment, decree or order
shall have continued undischarged and unstayed for a period of 60 days, or
(iii) at any time on or prior to the Purchase Contract Settlement Date the
Company shall file a petition for relief under the Bankruptcy Code, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file a
peti-
11
<PAGE> 19
tion or answer or consent seeking reorganization or liquidation under the
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
5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Security" means a zero-coupon U.S. Treasury Security due May
15, 2000 (Cusip Number 912820 AW7) which is the principal strip of the 8.875%
U.S. Treasury Security which matures on May 15, 2000.
"Trust" means MCN Financing III, a statutory business trust formed
under the laws of the State of Delaware.
"Underwriting Agreement" means the Underwriting Agreement dated March
19, 1997 between the Company and the Trust, on the one hand, and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, Salomon Brothers Inc, Smith Barney Inc., and Ladenburg Thalmann &
Co. Inc., as representatives of the several Underwriters named therein, on the
other hand.
"Vice President" means any vice president, whether or not designated
by a number or a word or words added before or after the title "vice
president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent an
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<PAGE> 20
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Agreement relating to the proposed action have been complied with
and 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:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) 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;
(3) 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
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.3. Form of Documents Delivered to 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
13
<PAGE> 21
Person may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the 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 7.1) conclusive in favor of the Agent
and the Company, if made in the manner provided in this Section.
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(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the Income
PRIDES Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate
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
Agent or the Company in reliance thereon, whether or not notation of such
action is made upon such Certificate.
(e) The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities 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 Securities. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities 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 Securities 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
cancelled 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 Securities 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 Agent in writing and to each
Holder of Securities in the manner set forth in Section 1.6.
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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 Agent in writing, and to each Holder of Securities in the
manner set forth in Section 1.6, on or prior to the existing Expiration Date.
If an Expiration Date is not designated with respect to any record date set
pursuant to this Section, the Company shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Section 1.5. Notices.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with,
(1) the 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 Agent at One First National Plaza, Suite 0126, Chicago, Illinois
60670-0126, Attention: Corporate Trust Services Division, or at any
other address previously furnished in writing by the Agent to the
Holders and the Company, or
(2) the Company by the 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 500 Griswold Street, Detroit, Michigan 48226,
Attention: Treasurer, or at any other address previously furnished in
writing to the Agent by the Company.
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(3) the Collateral Agent by the Agent, the Company or 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, addressed to the Collateral Agent at The Chase
Manhattan Bank, 450 W. 33rd Street, 15th Floor, New York, New York
10001, Attention: Corporate Trust Trustee Administration, or at any
other address previously furnished in writing by the Collateral Agent
to the Agent, the Company and the Holders; or
(4) the Institutional Trustee 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, addressed
to the Institutional Trustee at Rodney Sq. North, 1100 N. Market
Street, Wilmington, Delaware 19890, Attention: Corporate Trustee
Administration, or at any other address previously furnished in
writing by the Institutional Trustee to the Company; or
(5) the Indenture Trustee 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, addressed to the
Indenture Trustee at NBD Bank, 611 Woodward Avenue, Detroit, MI 48226,
Attention: Corporate Trust Administration, or at any other address
previously furnished in writing by the Indenture Trustee to the
Company.
Section 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable 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
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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 Agent, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Agent
shall constitute a sufficient notification for every purpose hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities 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 Securities, 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
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shall be bound by all of the terms and conditions hereof and of the Securities
evidenced by their Certificates by their acceptance of delivery of such
Certificates.
Section 1.11. Governing Law.
This Agreement and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Income PRIDES
Certificates or the Growth PRIDES Certificates) payment of the Contract
Adjustment Payments shall not be made on such date, but such payments shall be
made on the next succeeding Business Day with the same force and effect as if
made on such Payment Date, provided that no interest shall accrue or be payable
by the Company or any Holder for the period from and after any such Payment
Date, except that, if such next succeeding Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such
Payment Date.
In any case where any Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Income PRIDES Certificates or the Growth PRIDES Certificates), the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the next preceding Business Day with the same force and effect
as if performed on such Purchase Contract Settlement Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
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Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by
any Holder.
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally.
The Income PRIDES Certificates (including the form of Purchase
Contracts forming part of the Income PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit A 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 Income PRIDES are listed or
any depositary therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Income PRIDES Certificates, as evidenced
by their execution of the Income PRIDES Certificates.
The definitive Income PRIDES 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
Income PRIDES evidenced by such Income PRIDES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
The Growth PRIDES Certificates (including the form of Purchase
Contracts forming part of the Growth PRIDES evidenced thereby) shall be in
substantially the form set forth in 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 Growth PRIDES may be listed
or any depositary therefor, or as may, consistently herewith, be determined by
the officers of the Company executing such Growth PRIDES Certificates, as
evidenced by their execution of the Growth PRIDES Certificates.
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The definitive Growth PRIDES 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
Growth PRIDES evidenced by such Growth PRIDES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS CERTIFICATE
MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED,
AND NO TRANSFER OF THIS 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
PURCHASE CONTRACT AGREEMENT.
Section 2.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the Income
PRIDES shall be in substantially the form set forth on the form of the Income
PRIDES Certificates.
The form of the Agent's certificate of authentication of the Growth
PRIDES shall be in substantially the form set forth on the form of the Growth
PRIDES Certificates.
ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations.
The aggregate number of Income PRIDES evidenced by Certificates
authenticated, executed on behalf of the
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Holders and delivered hereunder is limited to 2,645,000 except for
Certificates authenticated, executed and delivered upon registration of
transfer of, in exchange for, or in lieu of, other Certificates pursuant to
Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Income PRIDES or Growth PRIDES and any integral
multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the Certificates.
Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing the
ownership by the Holder thereof of a beneficial interest in Preferred Security
with a principal amount equal to the Stated Amount, subject to the Pledge of
such Preferred Security by such Holder pursuant to the Pledge Agreement, and
the rights and obligations of the Holder thereof and the Company under one
Purchase Contract. The Agent as attorney-in-fact for, and on behalf of, each
Holder of Income PRIDES shall pledge, pursuant to the Pledge Agreement, the
Preferred Security forming a part of such Holder's Income PRIDES, to the
Collateral Agent and grant to the Collateral Agent a security interest in the
right, title, and interest of such Holder in such Preferred Security, for the
benefit of the Company, to secure the obligation of the Holder under the
Purchase Contracts to purchase the Common Stock of the Company. Prior to the
purchase of shares of Common Stock under the Purchase Contracts, such Purchase
Contracts shall not entitle the Holders of Income PRIDES Certificates to any of
the rights of a holder of shares of Common Stock, including, without
limitation, the right to vote or receive any dividends or other payments 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, or any other rights whatsoever as stockholders of the Company.
Each Growth PRIDES Certificate shall evidence the number of Growth
PRIDES specified therein, with each such Growth PRIDES representing the
ownership by the Holder thereof of a beneficial interest in Treasury Security
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with a principal amount equal to the aggregate Stated Amount of the Preferred
Securities for which such Treasury Security is being substituted, subject to
the Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and the rights and obligations of the Holder thereof and the Company
under one Purchase Contract. Prior to the purchase, if any, of shares of
Common Stock under the Purchase Contracts, such Growth PRIDES Certificates
shall not entitle the Holders of Growth PRIDES Certificates to any of the
rights of a holder of shares of Common Stock, including, without limitation,
the right to vote or receive any dividends or other payments 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, or any
other rights whatsoever as stockholders of the Company.
Section 3.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Certificates, and the
Agent in accordance with such Issuer Order shall authenticate, execute on
behalf of the Holder and deliver such Certificates.
The 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 Certificates may be manual or facsimile.
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 Certificates or did
not hold such offices at the date of such Certificates.
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No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement
or be valid or obligatory for any purpose unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by an authorized signatory of the Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the form set forth in Exhibit
A or Exhibit B hereto, as the case may be, 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 Income PRIDES or Growth PRIDES are listed,
or as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office, at the expense of the Company and
without charge to the
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Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, one or more definitive Certificates of like tenor authorized
denominations and evidencing a like number of Income PRIDES or Growth PRIDES,
as the case may be, as the temporary Certificate or Certificates so
surrendered. Until so exchanged, the temporary Certificates shall in all
respects evidence the same benefits and the same obligations with respect to
the Income PRIDES or Growth PRIDES, as the case may be, evidenced thereby as
definitive Certificates.
Section 3.5. Registration; Registration of Transfer and Exchange.
The Agent shall keep at the Corporate Trust Office a register (the
"Income PRIDES Register") in which, subject to such reasonable regulations as
it may prescribe, the Agent shall provide for the registration of Income PRIDES
Certificates and of transfers of Income PRIDES Certificates (the Agent, in such
capacity, the "Income PRIDES Registrar") and a Register (the "Growth PRIDES
Register") in which, subject to such reasonable regulations as it may
prescribe, the Agent shall provide for the registration of the Growth PRIDES
Certificates following Collateral Substitutions and transfers of Growth PRIDES
Certificates (the Agent, in such capacity, the "Growth PRIDES Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Agent, and
the 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 Certificates of any authorized denominations, like
tenor, and evidencing a like number of Income PRIDES or Growth PRIDES, as the
case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surren-
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dered for exchange, the Company shall execute and deliver to the Agent, and the
Agent shall authenticate, execute on behalf of the Holder, and deliver the
Certificates which the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Income
PRIDES or Growth PRIDES, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the
Income PRIDES or Growth PRIDES, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Agent) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the 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 Certificate, but the Company and the 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 Certificates, other than any exchanges pursuant to Sections 3.6 and
8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder and deliver any Certificate
presented or surrendered for registration of transfer or for exchange on or
after the Purchase Contract Settlement Date or the Termination Date. In lieu
of delivery of a new Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Agent shall (i) if
the Purchase Contract Settlement Date has occurred, deliver the shares of
Common Stock issuable in respect of the Purchase Contracts forming a part of
the Securities evidenced by such Certificate, (ii) in the case of Income
PRIDES, if a
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Termination Event shall have occurred prior to the Purchase Contract Settlement
Date, transfer the aggregate Stated Amount of the Preferred Securities
evidenced thereby, or (iii) in the case of Growth PRIDES, if a Termination
Event shall have occurred prior to the Purchase Contract Settlement Date,
transfer the Treasury Securities evidenced thereby, in each case subject to the
applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
Section 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of
one or more, fully registered Global Certificates, to be delivered to the
Depositary by, or on behalf of, the Company. Such Global Certificate shall
initially be registered on the books and records of the Company in the name of
Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive
a definitive Certificate representing such Beneficial Owner's interest in such
Global Certificate, except as provided in Section 3.9. The Agent shall enter
into an agreement with the Depositary if so requested by the Company. Unless
and until definitive, fully registered Certificates have been issued to
Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full
force and effect;
(b) the Company shall be entitled to deal with the
Clearing Agency for all purposes of this Agreement (including the payment of
Contract Adjustment Payments and receiving approvals, votes or consents
hereunder) as the Holder of the Securities and the sole holder of the Global
Certificate(s) and shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 3.6
conflict with any other provisions of this Agreement, the provisions of this
Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Beneficial Owners and the
Clearing Agency
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and/or the Clearing Agency Participants. The Clearing Agency will make book
entry transfers among Clearing Agency Participants and receive and transmit
payments of Contract Adjustment Payments to such Clearing Agency Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any
Securities registered in the name of a Clearing Agency or the nominee of a
Clearing Agency, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities, the Company may, in its
sole discretion, appoint a successor Clearing Agency with respect to the
Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 3.8, (ii) the Company elects to terminate the book-entry system through
the Clearing Agency with respect to the Securities, or (iii) there shall have
occurred and be continuing a default by the Company in respect of its
obligations under one or more Purchase Contracts, then upon surrender of the
Global Certificates representing the Book-Entry Interests with respect to the
Securities by the Clearing Agency, accompanied by registration instructions,
the Company shall cause definitive Certificates to be delivered to Beneficial
Owners in accordance with the instructions of the Clearing Agency. The Company
shall not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be protected in relying on, such instructions.
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Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Agent, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new
Certificate, evidencing the same number of Income PRIDES or Growth PRIDES, as
the case may be, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity as may be required by them to hold each of them
and any agent of any of them harmless, then, in the absence of notice to the
Company or the Agent that such Certificate has been acquired by a bona fide
purchaser, the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver to the Holder,
in lieu of any such destroyed, lost or stolen Certificate, a new Certificate,
evidencing the same number of Income PRIDES or Growth PRIDES, 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 Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Purchase Contract Settlement Date or the
Termination Date. In lieu of delivery of a new Certificate, upon satisfaction
of the applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the Agent
shall (i) if the Purchase Contract Settlement Date has occurred, deliver the
shares of Common Stock issuable in respect of the Purchase Contracts forming a
part of the Securities evidenced by such Certificate, or (ii) if a Termination
Event shall have occurred prior to the Purchase Contract Settlement Date,
transfer the Preferred Securities or the Treasury Securities, as the case may
be, evidenced thereby, in each case subject to the applicable conditions and in
accordance with the applicable provisions of Article Five hereof.
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Upon the issuance of any new Certificate under this Section, the
Company and the 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 Agent)
connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other 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 payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of
transfer, the Company and the Agent, and any agent of the Company or the Agent,
may treat the Person in whose name such Certificate is registered as the owner
of the Income PRIDES or Growth PRIDES evidenced thereby, for the purpose of
receiving distributions on the Preferred Securities, receiving payments of
Contract Adjustment Payments, performance of the Purchase Contracts and for all
other purposes whatsoever, whether or not any distributions on the Preferred
Securities or the Contract Adjustment Payments payable in respect of the
Purchase Contracts constituting a part of the Income PRIDES or Growth PRIDES
evidenced thereby shall be overdue and notwithstanding any notice to the
contrary, and neither the Company nor the Agent, nor any agent of the Company
or the Agent, shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or the Agent, from giving effect to any written certification,
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proxy or other authorization furnished by any Clearing Agency (or its nominee),
as a Holder, with respect to such Global Certificate or impair, as between such
Clearing Agency and owners of beneficial interests in such Global Certificate,
the operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date, upon the transfer of Preferred
Securities or Treasury Securities, as the case may be, after the occurrence of
a Termination Event or pursuant to an Early Settlement, or upon the
registration of a transfer or exchange of a Security, or a Collateral
Substitution or the re-establishment of an Income PRIDES shall, if surrendered
to any Person other than the Agent, be delivered to the Agent and, if not
already cancelled, shall be promptly cancelled by it. The Company may at any
time deliver to the Agent for cancellation any Certificates previously
authenticated, executed and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Certificates so delivered shall,
upon Issuer Order, be promptly cancelled by the Agent. No Certificates shall
be authenticated, executed on behalf of the Holder and delivered in lieu of or
in exchange for any Certificates cancelled as provided in this Section, except
as expressly permitted by this Agreement. All cancelled Certificates held by
the Agent shall be destroyed by the Agent unless otherwise directed by Issuer
Order.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
Section 3.13. Substitution of Securities.
A Holder may separate Preferred Securities from the related Purchase
Contracts in respect of an Income PRIDES by substituting for such Preferred
Securities, Treasury Securities in an aggregate principal amount equal to the
aggregate Stated Amount of such Preferred Securities (a "Collateral
Substitution") at any time from and after the
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date of this Agreement and on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date by (a) depositing with the
Collateral Agent Treasury Securities having an aggregate principal amount equal
to the aggregate Stated Amount of the Preferred Securities comprising part of
such Income PRIDES and (b) transferring the related Income PRIDES to the Agent
accompanied by a notice to the Agent, substantially in the form of Exhibit D
hereto, stating that the Holder has transferred the relevant amount of Treasury
Securities to the Collateral Agent and requesting that the Agent instruct the
Collateral Agent to release the Preferred Securities underlying such Income
PRIDES, whereupon the Agent shall promptly give such instruction to the
Collateral Agent, substantially in the form of Exhibit C hereto. Upon receipt
of the Treasury Securities described in clause (a) above and the instruction
described in clause (b) above, in accordance with the terms of the Pledge
Agreement, the Collateral Agent will release to the Agent, on behalf of the
Holder, Preferred Securities having a corresponding aggregate Stated Amount
from the Pledge, free and clear of the Company's security interest therein, and
upon receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
(ii) transfer the Preferred Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Growth PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Income PRIDES
Certificates.
Holders who elect to separate the Preferred Security from the related
Purchase Contract and to substitute Treasury Securities for such Preferred
Securities shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such fees or
expenses.
Holders may make Collateral Substitutions only in integral multiples
of 20 Income PRIDES.
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In the event a Holder making a Collateral Substitution pursuant to
this Section 3.13 fails to effect a book-entry transfer of the Income PRIDES or
fails to deliver an Income PRIDES Certificate(s) to the Agent after depositing
Treasury Securities with the Collateral Agent, the Preferred Security
constituting a part of such Income PRIDES, and any distributions on such
Preferred Security, shall be held in the name of the Agent or its nominee in
trust for the benefit of such Holder, until such Income PRIDES is so
transferred or the Income PRIDES Certificate is so delivered, as the case may
be, or, with respect to an Income PRIDES Certificate, such Holder provides
satisfactory evidence that such Income PRIDES Certificate has been destroyed,
lost or stolen, together with any indemnity that may be required by the Agent
and the Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES
shall not be separable into its constituent parts, and the rights and
obligations of the Holder in respect of the Preferred Security and Purchase
Contract comprising such Income PRIDES may be acquired, and may be transferred
and exchanged, only as an Income PRIDES.
Section 3.14. Reestablishment of Income PRIDES.
A Holder of a Growth PRIDES may at any time on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date,
recreate Income PRIDES by (a) depositing with the Collateral Agent Preferred
Securities having an aggregate Stated Amount equal to the aggregate principal
amount of the Treasury Securities comprising part of the Growth PRIDES to the
Collateral Agent and (b) transferring the related Growth PRIDES to the Agent
accompanied by a notice to the Agent, substantially in the form of Exhibit D
hereto, stating that the Holder has transferred the relevant amount of
Preferred Securities to the Collateral Agent and requesting that the Agent
instruct the Collateral Agent to release the Treasury Securities underlying
such Growth PRIDES, whereupon the Agent shall promptly give such instruction to
the Collateral Agent, substantially in the form of Exhibit C hereto. Upon
receipt of the Preferred Securities described in clause (a) above and the
instruction described in clause (b) above, in accordance with the
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<PAGE> 41
terms of the Pledge Agreement, the Collateral Agent will effect the release of
the Treasury Securities having a corresponding aggregate principal amount from
the Pledge to the Agent free and clear of the Company's security interest
therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Growth PRIDES;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver an Income PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Growth PRIDES.
Holders of Growth PRIDES may reestablish Income PRIDES only in
integral multiples of 20 Income PRIDES for each Growth PRIDES.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Growth PRIDES remains in effect, such Growth PRIDES shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Growth PRIDES in respect of the Treasury Security and
Purchase Contract comprising such Growth PRIDES may be acquired, and may be
transferred and exchanged only as a Growth PRIDES.
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Preferred Securities or the Treasury Securities, as the case may
be, underlying the Income PRIDES and the Growth PRIDES, respectively, pursuant
to the terms of the Pledge Agreement, the Agent shall request transfer
instructions with respect to such Preferred Securities and/or Treasury
Securities, as the case may be, from each Holder by written request mailed to
such Holder at its address as it appears in the Income PRIDES Register or the
Growth PRIDES Register, as the case may be. Upon book-entry transfer of the
Income PRIDES or Growth PRIDES or delivery of an Income PRIDES Certificate or
Growth PRIDES Certificate to the Agent
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with such transfer instructions, the Agent shall transfer the Preferred
Securities or Treasury Securities underlying such Income PRIDES or Growth
PRIDES, as the case may be, to such Holder by book-entry transfer, or other
appropriate procedures, in accordance with such instructions. In the event a
Holder of Income PRIDES or Growth PRIDES fails to effect such transfer or
delivery, the Preferred Securities or Treasury Securities underlying such
Income PRIDES or Growth PRIDES, as the case may be, and any distributions
thereon, shall be held in the name of the Agent or its nominee in trust for the
benefit of such Holder, until such Income PRIDES or Growth PRIDES are
transferred or the Income PRIDES Certificate or Growth PRIDES Certificate is
surrendered or such Holder provides satisfactory evidence that such Income
PRIDES Certificate or Growth PRIDES Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and the
Company.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company or
its trustee in the event that the Company becomes the debtor under the
Bankruptcy Code.
ARTICLE IV
The Preferred Securities
Section 4.1. Payment of Distribution; Rights to Distributions Preserved.
A distribution on any Preferred Security which is paid on any Payment
Date shall, subject to receipt thereof by the Agent from the Collateral Agent
as provided by the terms of the Pledge Agreement, be paid to the Person in
whose name the Income PRIDES Certificate (or one or more Predecessor Income
PRIDES Certificates) of which such Preferred Security is a part is registered
at the close of business on the Record Date for such Payment Date.
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Each Income PRIDES Certificate evidencing Preferred Securities
delivered under this Agreement upon registration of transfer of or in exchange
for or in lieu of any other Income PRIDES Certificate shall carry the rights to
distributions accrued and unpaid, and to accrue distributions, which were
carried by the Preferred Securities underlying such other Income PRIDES
Certificate.
In the case of any Income PRIDES with respect to which Cash Settlement
of the underlying Purchase Contract is effected on a Purchase Contract
Settlement Date, or with respect to which Early Settlement of the underlying
Purchase Contract is effected on an Early Settlement Date, or with respect to
which a Collateral Substitution is effected on a date, after any Record Date
and on or prior to the next succeeding Payment Date, distributions on the
Preferred Securities underlying such Income PRIDES otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Cash
Settlement or Early Settlement or Collateral Substitution, and such
distributions shall, subject to receipt thereof by the Agent, be paid to the
Person in whose name the Income PRIDES Certificate (or one or more Predecessor
Income PRIDES Certificates) is registered at the close of business on the
Record Date. Except as otherwise expressly provided in the immediately
preceding sentence, in the case of any Income PRIDES with respect to which Cash
Settlement or Early Settlement of the underlying Purchase Contract is effected
on a Purchase Contract Settlement Date or an Early Settlement Date, as the case
may be, or with respect to which a Collateral Substitution has been effected,
distributions on the related Preferred Securities that would otherwise be
payable after the Purchase Contract Settlement Date or Early Settlement Date
shall not be payable hereunder to the Holder of such Income PRIDES; provided,
however, that to the extent that such Holder continues to hold the separated
Preferred Securities that formerly comprised a part of such Holder's Income
PRIDES, such Holder shall be entitled to receive the distributions on such
separated Preferred Securities.
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Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Preferred
Securities pledged with the Collateral Agent but only to the extent instructed
by the Holders as described below. Upon receipt of notice of any meeting at
which holders of Preferred Securities are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Preferred
Securities, the Agent shall, as soon as practicable thereafter, mail to the
Holders a notice (a) containing such information as is contained in the notice
or solicitation, (b) stating that each Holder on the record date set by the
Agent therefor (which, to the extent possible, shall be the same date as the
record date for determining the holders of Preferred Securities entitled to
vote) shall be entitled to instruct the Agent as to the exercise of the voting
rights pertaining to the Preferred Securities underlying their Income PRIDES
and (c) stating the manner in which such instructions may be given. Upon the
written request of the Holders on such record date, the Agent shall endeavor
insofar as practicable to vote or cause to be voted, in accordance with the
instructions set forth in such requests, the maximum number of Preferred
Securities as to which any particular voting instructions are received. In the
absence of specific instructions from the Holder of an Income PRIDES, the Agent
shall abstain from voting the Preferred Security underlying such Income PRIDES.
The Company hereby agrees, if applicable, to solicit Holders to timely instruct
the Agent in order to enable the Agent to vote such Preferred Securities or to
cause such Preferred Securities to be voted, and the Trust shall covenant in
the Declaration to take all action which may be deemed necessary by the Agent
in order to enable the Agent to vote such Preferred Securities or to cause such
Preferred Securities to be voted.
Section 4.3. Tax Event; Investment Company Event.
Upon the occurrence of a Tax Event or an Investment Company Event or a
liquidation of the Trust, a principal amount of Junior Subordinated Debentures
constituting the assets of the Trust and underlying the Preferred Securities
equal to the aggregate Stated Amount of the Pledged Preferred Securities shall
be delivered to the Collateral
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Agent in exchange for the Pledged Preferred Securities. Thereafter, the Junior
Subordinated Debentures will be held by the Collateral Agent in accordance with
the terms of the Pledge Agreement to secure the obligations of each Holder of
an Income PRIDES to purchase the Common Stock of the Company under the Purchase
Contracts constituting a part of such Income PRIDES. Following the occurrence
of a Tax Event, an Investment Company Event or a liquidation of the Trust, the
Holders and the Collateral Agent shall have such security interests, rights and
obligations with respect to the Junior Subordinated Debentures as the Holders
and the Collateral Agent had in respect of the Preferred Securities subject to
the Pledge thereof as provided in Articles II, III, IV, V and VI of the Pledge
Agreement, and any reference herein to the Preferred Securities shall be deemed
to be a reference to the Junior Subordinated Debentures. The Company may cause
to be made in any Income PRIDES Certificates thereafter to be issued such
change in phraseology and form (but not in substance) as may be appropriate to
reflect the liquidation of the Trust and the substitution of Junior
Subordinated Debentures for Preferred Securities as Collateral.
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall obligate the Holder of the related
Security to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of shares of Common Stock equal to the Settlement Rate, unless, on or
prior to the Purchase Contract Settlement Date, there shall have occurred a
Termination Event, Cash Settlement or an Early Settlement with respect to the
Security of which such Purchase Contract is a part. The "Settlement Rate" is
equal to (a) if the Applicable Market Value (as defined below) is equal to or
greater than $35.38 (the "Threshold Appreciation Price"), 1.4132 shares of
Common Stock per Purchase Contract, (b) if the Applicable Market Value is less
than the Threshold Appreciation Price, but is greater than $29, the number of
shares of Common Stock equal to the Stated Amount
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divided by the Applicable Market Value and (c) if the Applicable Market Value
is less than or equal to $29, 1.7241 shares of Common Stock per Purchase
Contract, in each case subject to adjustment as provided in Section 5.6 (and in
each case rounded upward or downward to the nearest 1/10,000th of a share). As
provided in Section 5.10, 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 second Trading Day immediately preceding the Purchase Contract
Settlement 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 independent 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 an Income PRIDES or a Growth PRIDES, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact, agrees to be bound by
the terms and provisions thereof, covenants and agrees to perform its
obligations under such Purchase Contracts, and consents to the provisions
hereof, irrevo-
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cably authorizes the Agent as its attorney-in-fact to enter into and perform
the Pledge Agreement on its behalf as its attorney-in-fact, and consents to and
agrees to be bound by the Pledge of the Preferred Securities or the Treasury
Securities pursuant to the Pledge Agreement; provided that upon a Termination
Event, the rights of the Holder of such Security under the Purchase Contract
may be enforced without regard to any other rights or obligations. Each Holder
of an Income PRIDES or a Growth PRIDES, by its acceptance thereof, further
covenants and agrees, that, to the extent and in the manner provided in Section
5.4 and the Pledge Agreement, but subject to the terms thereof, payments in
respect of the Stated Amount of the Preferred Securities or the Proceeds of the
Treasury Securities on the Purchase Contract Settlement 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 Certificate, the transferee shall
be bound (without the necessity of any other action on the part of such
transferee), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor shall
be released from the obligations under this Agreement, the Purchase Contracts
underlying the Certificates so transferred and the Pledge Agreement. The
Company covenants and agrees, and each Holder of a Certificate, by its
acceptance thereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
Section 5.2. Contract Adjustment Payments.
Subject to Section 5.3, the Company shall pay, on each Payment Date,
the Contract Adjustment Payments payable in respect of each Purchase Contract
to the Person in whose name a Certificate (or one or more Predecessor
Certificates) is registered at the close of business on the Record Date next
preceding such Payment Date. The Contract Adjustment Payments will be payable
at the office of the 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 Person's address as it appears on the Income PRIDES
Register or Growth PRIDES Register.
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Upon the occurrence of a Termination Event, Contract Adjustment
Payments shall cease to accrue in respect of any period from and after the date
of such Termination Event (unless the Company defaults in the payment of
accrued Contract Adjustment Payments). The Company's obligations to pay any
accrued Contract Adjustment Payments shall be deemed to be fulfilled if the
Company deposits with the Agent funds necessary to pay accrued Contract
Adjustment Payments, in trust with irrevocable instructions and authorization
that such funds shall be delivered to the Holders.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the re-establishment of an Income PRIDES) any other
Certificate shall carry the rights to Contract Adjustment Payments accrued and
unpaid, and to accrue Contract Adjustment Payments, which were carried by the
Purchase Contracts underlying such other Certificates.
In the case of any Security with respect to which Early Settlement of
the underlying Purchase Contract is effected on an Early Settlement Date, after
any Record Date and on or prior to the next succeeding Payment Date, Contract
Adjustment Payments otherwise payable on such Payment Date shall be payable on
such Payment Date notwithstanding such Early Settlement, and such Contract
Adjustment Payments shall be paid to the Person in whose name the Certificate
evidencing such Security (or one or more Predecessor Certificates) is
registered at the close of business on such Record Date. Except as otherwise
expressly provided in the immediately preceding sentence, in the case of any
Security with respect to which Early Settlement of the underlying Purchase
Contract is effected on an Early Settlement Date, Contract Adjustment Payments
that would otherwise be payable after the Early Settlement Date with respect to
such Purchase Contract shall not be payable.
The Company's obligations with respect to Contract Adjustment Payments
are subordinate and junior in right of payment to all liabilities of the
Company, other than the Yield Enhancement Payments payable by the Company in
respect of its 8 3/4% PRIDES and the Company's guarantee of its subordinated
debentures with which they rank pari passu.
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Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) at least ten Business
Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the
date the Company is required to give notice of the Record Date or Payment Date
with respect to payment of such Contract Adjustment Payments to the New York
Stock Exchange or other applicable self-regulatory organization or to Holders
of the Securities, but in any event not less than two Business Days prior to
such Record Date. Any Contract Adjustment Payments so deferred shall bear
additional Contract Adjustment Payments thereon at the rate of 8% per annum
(computed on the basis of 360 day year of twelve 30 day months), compounding on
each succeeding Payment Date, until paid in full (such deferred installments of
Contract Adjustment Payments together with the additional Contract Adjustment
Payments accrued thereon, being referred to herein as the "Deferred Contract
Adjustment Payments"). Deferred Contract Adjustment Payments shall be due on
the next succeeding Payment Date except to the extent that payment is deferred
pursuant to this Section. No Contract Adjustment Payments may be deferred to a
date that is after the Purchase Contract Settlement Date or, with respect to
any particular Purchase Contract, Early Settlement thereof. If the Purchase
Contracts are terminated (upon the occurrence of a Termination Event, the
Holder's right to receive Contract Adjustment Payments and Deferred Contract
Adjustment Payments will terminate.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder will receive on the Purchase Contract Settlement
Date, in lieu of a cash payment, a number of shares of Common Stock (in
addition to a number of shares of Common Stock equal to the Settlement Rate)
equal to (x) the aggregate amount of Deferred Contract Adjustment Payments
payable to a Holder divided by (y) the Applicable Market Value.
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No fractional shares of Common Stock will be issued by the Company
with respect to the payment of Deferred Contract Adjustment Payments on the
Purchase Contract Settlement Date. In lieu of fractional shares otherwise
issuable with respect to such payment of Deferred Contract Adjustment Payments,
the Holder will be entitled to receive an amount in cash as provided in Section
5.10.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been made, (a) the Company shall not declare or pay dividends on,
make distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plans
or the satisfaction by the Company of its obligations pursuant to any contract
or security outstanding on the date of such event requiring the Company to
purchase shares of Common Stock, (ii) as a result of a reclassification 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 or (iii) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged) or make any
guarantee payments with respect to the foregoing), (b) the Company shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by the
Company that rank pari passu with such Contract Adjustment Payments and (c) the
Company shall not make any guarantee payments with respect to the foregoing.
Section 5.4. Payment of Purchase Price.
(a) Unless a Holder settles the underlying Purchase Contract either
through the early delivery of cash to the Purchase Contract Agent in the manner
described in Section 5.9 or otherwise, the Purchase Price for the shares of
Common Stock purchased pursuant to a Purchase Contract shall be paid by
application of payments received by the Company on the Purchase Contract
Settlement Date from the Collateral Agent pursuant to the Pledge Agreement,
pay-
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able at the office of the Collateral Agent in the City of New York maintained
for such purpose, as follows:
(i) A Holder may effect a "Cash Settlement" of a Purchase
Contract by (A) providing the Agent with notice of its election to
effect a Cash Settlement on or prior to 5:00 p.m., New York City time,
on the second Business Day immediately preceding the Purchase Contract
Settlement Date (B) concurrently making a payment of the Purchase
Price to the Collateral Agent prior to 9:00 a.m., New York City time,
on the Business Day immediately preceding the Purchase Contract
Settlement Date in lawful money of the United States by certified or
cashiers' check or wire transfer in immediately available funds
payable to or upon the order of the Company. Upon receipt of notice
from a Holder electing a Cash Settlement, the Agent promptly shall
notify the Collateral Agent of such Holder's election. Any cash
received by the Collateral Agent will be invested promptly by the
Collateral Agent in Permitted Investments and paid to the Company on
the Purchase Contract Settlement Date in settlement of the Purchase
Contract in accordance with the terms of the Pledge Agreement. Any
funds received by the Collateral Agent in respect of the investment
earnings from the investment in such Permitted Investments, will be
distributed to the Agent when received for payment to the Holder.
(ii) A Holder of Income PRIDES who does not make an effective
Cash Settlement or an Early Settlement under Section 5.9 hereof shall
be deemed to have elected to pay for the shares of Common Stock to be
issued under the related Purchase Contract from the proceeds of the
related Preferred Securities underlying its Income PRIDES, which will
be applied automatically by the Collateral Agent to pay the Purchase
Price for the Purchase Contract to the Company on the Purchase
Contract Settlement Date as provided in subparagraph (a)(i); and
(iii) A Holder of Growth PRIDES shall pay for the shares of
Common Stock to be issued under the Purchase Contract from the
Proceeds of the related Pledged Treasury Securities held by the
Collateral Agent, which will be applied automatically by the
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Collateral Agent to pay the Purchase Price for the Purchase Contract
to the Company on the Purchase Contract Settlement Date without
receiving any instruction from the Holder. Upon the maturity of the
Pledged Treasury Notes held by the Collateral Agent on the day
immediately prior to the Purchase Contract Settlement Date, the
principal amount of the Treasury Securities received by the Collateral
Agent will be invested promptly in Permitted Investments. In the
event the sum of the proceeds from the related Pledged Treasury
Securities and the investment earnings earned from such investments is
in excess of the aggregate Purchase Price of the Purchase Contracts
being settled thereby, the Collateral Agent will distribute such
excess to the Agent for the benefit of the Holder of the related
Growth PRIDES when received.
Any distribution to Holders of excess funds and interest described in
subparagraph (i), (ii) or (iii) above, shall be payable at the office of the
Agent in The City of New York maintained for that purpose or, at the option of
the Holder, by check mailed to the address of the Person entitled thereto at
such address as it appears on the Register.
(b) The Company shall not be obligated to issue any
shares of Common Stock in respect of a Purchase Contract or deliver any
certificate therefor to the Holder unless it shall have received payment in
full of the Purchase Price for the shares of Common Stock to be purchased
thereunder in the manner herein set forth.
(c) Upon Cash Settlement of any Purchase Contract, (i)
the Collateral Agent will in accordance with the terms of the Pledge Agreement
cause the Pledged Preferred Securities underlying the relevant Security to be
released from the Pledge by the Collateral Agent free and clear of any security
interest of the Company and transferred to the Agent for delivery to the Holder
thereof or its designee as soon as practicable and (ii) subject to the receipt
thereof from the Collateral Agent, the Agent shall, by book-entry transfer, or
other appropriate procedures, in accordance with instructions provided by the
Holder thereof, transfer the Pledged Preferred Security or the Pledged Treasury
Securities (or, if no such instructions are given to the Agent by the Holder,
the
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Agent shall hold the Pledged Preferred Security or the Pledged Treasury
Securities, and any distributions thereon, in the name of the Agent or its
nominee in trust for the benefit of such Holder).
Section 5.5. Issuance of Shares of Common Stock.
Unless a Termination Event shall have occurred on or prior to the
Purchase Contract Settlement Date, on the Purchase Contract Settlement Date,
upon its receipt of payment in full of the Purchase Price for the shares of
Common Stock purchased by the Holders pursuant to the foregoing provisions of
this Article, and in payment of Deferred Contract Adjustment Payments, if any,
owed by the Company to the Holders and subject to Section 5.6(b), the Company
shall issue and deposit with the Agent, for the benefit of the Holders of the
Outstanding Securities, one or more certificates representing the new shares of
Common Stock registered in the name of the 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 Certificate
to the Agent on or after the Purchase Contract Settlement Date, together with
settlement instructions thereon duly completed and executed, the Holder of such
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 Securities then held by such Holder) together with cash
in lieu of fractional shares as provided in Section 5.10 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 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
settlement instructions provided by the Holder to the Agent. If any shares of
Common Stock issued in respect of a Purchase Contract and in payment of any
Deferred Contract Adjustment Payments are to be registered to a Person other
than the Person in whose name the Certificate evidencing such Purchase Contract
is registered, no such registration shall be made unless the Person re-
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questing 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 Certificate evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.
Section 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on any class of Common Stock of the Company in Common Stock, the
Settlement Rate in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be increased by dividing such Settlement
Rate by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other distribution,
such increase to become effective immediately after the 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 Securities upon settlement of the Purchase Contracts underlying
such Securities) 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
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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 or
split 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 or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding 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,
split 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
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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 adjusted 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 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, (I) 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 5.6(b) applies or as
part of a distribution referred to in paragraph (4) of this Section) in an
aggregate amount that, combined together with (II) 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 and in
respect of which no adjustment pursuant to this paragraph (5) or paragraph (6)
of this Section has been made and (III) the aggregate of any cash plus the fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution) of consideration
payable 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 concluded within the 12
months preceding the date of payment of the distribution described in clause
(I) above and in respect of which no adjustment pursuant to this paragraph (5)
or paragraph (6) of this Section has been made, exceeds 15% of the product of
the Current Market Price per share of the
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Common Stock on the date for the determination of holders of shares of Common
Stock entitled to receive such distribution times the number of shares of
Common Stock outstanding on such date, then, and in each such case, immediately
after the close of business on such date for determination, 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 determination of the stockholders entitled to receive such
distribution by a fraction (i) the numerator of which shall be equal to the
Current Market Price per share of the Common Stock on the date fixed for such
determination less an amount equal to the quotient of (x) the combined amount
distributed or payable in the transactions described in clauses (I), (II) and
(III) above and (y) the number of shares of Common Stock outstanding on such
date for determination and (ii) the denominator of which shall be equal to the
Current Market Price per share of the Common Stock on such date for
determination.
(6) In case (I) a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares) of an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) that combined together with (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 expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer, by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph (5)
of this Section or this paragraph (6) has been made and (III) the aggregate
amount of any distributions to all holders of the Company's Common Stock made
exclusively in cash within the 12 months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment
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pursuant to paragraph (5) of this Section or this paragraph (6) has been made,
exceeds 15% of the product of the Current Market Price per share of the Common
Stock as of the last time (the "Expiration Time") tenders could have been made
pursuant to such tender or exchange offer (as it may be amended) times the
number of shares of Common Stock outstanding (including any tendered shares) on
the Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Settlement Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate immediately prior to the close of
business on the date of the Expiration Time by a fraction (i) the numerator of
which shall be equal to (A) the product of (I) the Current Market Price per
share of the Common Stock on the date of the Expiration Time and (II) the
number of shares of Common Stock outstanding (including any tendered shares) on
the Expiration Time less (B) the amount of cash plus the fair market value
(determined as aforesaid) of the aggregate consideration payable to
stockholders based on the transactions described in clauses (I), (II) and (III)
above (assuming in the case of clause (I) the acceptance, up to any maximum
specified in the terms of the tender or exchange offer, of Purchased Shares),
and (ii) the denominator of which shall be equal to the product of (A) the
Current Market Price per share of the Common Stock as of the Expiration Time
and (B) the number of shares of Common Stock outstanding (including any
tendered shares) as of the Expiration Time less the number of all shares
validly tendered and not withdrawn as of the Expiration Time (the shares deemed
so accepted, up to any such maximum, being referred to as the "Purchased
Shares").
(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 5.6(b) applies) shall be deemed to
involve (a) 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 (b) a subdivision,
split or combination, as the case may be, of the number of shares of Common
Stock outstanding immediately prior
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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 or split becomes
effective" or "the day upon which such combination becomes effective", as the
case may be, and "the day upon which such subdivision, split or combination
becomes effective" within the meaning of paragraph (3) of this Section).
(8) The "Current Market Price" per share of Common Stock on any day
means the average of the daily Closing Prices for the 5 consecutive Trading
Days selected by the Company commencing not more than 20 Trading Days before,
and ending not later than, the earlier of the day in question and the day
before the "ex date" with respect to the issuance or distribution requiring
such computation. For purposes of this paragraph, the term "ex date", when
used with respect to any issuance or distribution, shall mean the first date on
which the Common Stock trades regular way on such exchange or in such market
without the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated to the
nearest 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share to the next lower 1/10,000th of a share). No adjustment
in the Settlement Rate shall be required unless such adjustment would require
an increase or decrease of at least one percent therein; provided, however,
that any adjustments which by reason of this subparagraph are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. If an adjustment is made to the Settlement Rate pursuant to
paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(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 5.1 will apply on the Purchase Contract Settlement 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 5.6(a) and the denominator shall be the Settlement Rate
immediately before such adjustment.
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(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 other than as a result of or after the occurrence
of a Termination Event (any such event, a "Reorganization Event"), the
Settlement Rate will be adjusted to provide that each Holder of Securities will
receive on the Purchase Contract Settlement Date with respect to each Purchase
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 Purchase Contract Settlement Date had occurred immediately prior to such
Reorganization Event, assuming such Holder of Common Stock is not a Person with
which the Company consolidated or into which the Company merged or which merged
into the Company or to which such sale or transfer was made, as the case may be
("Constituent Person"), or an Affiliate of a constituent Person, and failed to
exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such Reorganization Event
(provided that if the kind or amount of securities, cash and other property
receivable upon such Reorganization 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
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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 Agent an agreement supplemental hereto providing
that the Holders of each Outstanding Security shall have the rights provided by
this Section 5.6. Such supplemental agreement shall provide for adjustments
which, for events subsequent to the effective date of such supplemental
agreement, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section. The above provisions of this Section
shall similarly apply to successive Reorganization Events.
Section 5.7. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided,
the Company shall:
(i) forthwith compute the adjusted Settlement Rate in
accordance with Section 5.6 and prepare and transmit to the 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 5.6 (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 Securities of the occurrence of
such event and a statement in reasonable detail setting forth the
method by which the adjustment to the Settlement
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Rate was determined and setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any holder of Securities 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 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
Agent makes no representation with respect thereto. The Agent shall not be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock pursuant to a Purchase Contract or to comply with any of
the duties, responsibilities or covenants of the Company contained in this
Article.
Section 5.8. Termination Event; Notice.
The Purchase Contracts and the obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Agent or the Company, if,
on or prior to the Purchase Contract Settlement Date, a Termination Event shall
have occurred. Upon and after the occurrence of a Termination Event, the
Securities shall thereafter represent the right to receive the Preferred
Securities forming a part of such Securities in the case of Income PRIDES, or
Treasury Securities in the case of Growth PRIDES, in accordance with the
provisions of Section 4.2 and the Pledge Agreement, as applicable. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Register.
Section 5.9. Early Settlement.
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(a) Subject to and upon compliance with the provisions of this
Section 5.9, at the option of the Holder thereof, Purchase Contracts underlying
Securities, having an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof, may be settled early ("Early Settlement") as provided herein.
In order to exercise the right to effect Early Settlement with respect to any
Purchase Contracts, the Holder of the Certificate evidencing such Purchase
Contracts shall deliver such Certificate to the Agent at the Corporate Trust
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early on the reverse thereof duly completed and accompanied
by payment in the form of a certified or cashier's check payable to the order
of the Company in an amount (the "Early Settlement Amount") equal to (i) the
product of (A) the Stated Amount times (B) the number of Purchase Contracts
with respect to which the Holder has elected to effect Early Settlement plus
(ii) if such delivery is made with respect to any Purchase Contracts during the
period from the close of business on any Record Date next preceding any Payment
Date to the opening of business on such Payment Date, an amount equal to the
sum of (x) the Contract Adjustment Payments payable on such Payment Date with
respect to such Purchase Contracts plus (y) in the case of Income PRIDES
Certificate, the distributions on the related Preferred Securities payable on
such Payment Date. Except as provided in the immediately preceding sentence
and subject to the second to last paragraph of Section 5.2, no payment or
adjustment shall be made upon Early Settlement of any Purchase Contract on
account of any Contract Adjustment Payments accrued on such Purchase Contract
or on account of any dividends on the Common Stock issued upon such Early
Settlement. If the foregoing requirements are first satisfied with respect to
Purchase Contracts underlying any Securities at or prior to 5:00 p.m., New York
City time, on a Business Day, such day shall be the "Early Settlement Date"
with respect to such Securities and if such requirements are first satisfied
after 5:00 p.m., New York City time, on a Business Day or on a day that is not
a Business Day, the "Early Settlement Date" with respect to such Securities
shall be the next succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder shall be entitled
to receive, a
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number of new shares of Common Stock on account of each Purchase Contract as to
which Early Settlement is effected equal to the Early Settlement Rate;
provided, however, that upon the Early Settlement of the Purchase Contracts,
the Holder of such related Securities will forfeit the right to receive any
Deferred Contract Adjustment Payments. The Early Settlement Rate shall
initially be equal to and shall be adjusted in the same manner and at the same
time as the Settlement Rate is adjusted. As promptly as practicable after
Early Settlement of Purchase Contracts in accordance with the provisions of
this Section 5.9, the Company shall issue and shall deliver to the Agent at the
Corporate Trust Office a certificate or certificates for the full number of
shares of Common Stock issuable upon such Early Settlement together with
payment in lieu of any fraction of a share, as provided in Section 5.10.
(c) The Company shall cause the shares of Common Stock issuable
upon Early Settlement of Purchase Contracts, and the related Preferred
Securities, in the case of Income PRIDES, or the related Treasury Securities,
in the case of Growth PRIDES, deliverable, to be issued and delivered, in the
case of such shares of Common Stock, and released from the Pledge by the
Collateral Agent and transferred, in the case of such Preferred Securities or
Treasury Securities, to the Agent, for delivery to the Holder thereof or its
designee, no later than the third Business Day after the applicable Early
Settlement Date.
(d) Upon Early Settlement of any Purchase Contracts, and subject
to receipt of shares of Common Stock from the Company and Preferred Securities
or Treasury Securities, as the case may be, from the Collateral Agent, as
applicable, the Agent shall, in accordance with the instructions provided by
the Holder thereof on the applicable form of Election to Settle Early on the
reverse of the Certificate evidencing the related Securities, (i) transfer to
the Holder the Preferred Securities or Treasury Securities, as the case may be,
forming a part of such Securities, and (ii) deliver to the Holder a certificate
or certificates for the full number of shares of Common Stock issuable upon
such Early Settlement together with payment in lieu of any fraction of a share,
as provided in Section 5.10.
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(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
(f) Holders may settle Securities early only in integral multiples
of 20 Income PRIDES or one GROWTH PRIDES.
Section 5.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts or with
respect to the payment of Deferred Contract Adjustment Payments, if any, on the
Purchase Contract Settlement Date. If 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 Certificates so surrendered. Instead of any
fractional share of Common Stock which would otherwise be deliverable upon
settlement of any Purchase Contracts on the Purchase Contract Settlement Date
or upon Early Settlement or with respect to the payment of any Deferred
Contract Adjustment Payments, the Company, through the Agent, shall make a cash
payment in respect of such fractional interest in an amount equal to the value
of such fractional shares times the Applicable Market Value. The Company shall
provide the Agent from time to time with sufficient funds to permit the Agent
to make all cash payments required by this Section 5.10 in a timely manner.
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Section 5.11. 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 and in payment of any Deferred Contract Adjustment
Payments; 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 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 Certificate surrendered in respect of the Purchase Contracts evidenced
thereby, other than in the name of the Agent, as custodian for such Holder, and
the Company shall not be required to issue or deliver such share certificates
or Certificates unless or until the Person or Persons requesting the transfer
or issuance thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has
been paid.
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive Contract Adjustment
Payments and to Purchase Common Stock.
The Holder of any Income PRIDES or Growth PRIDES shall have the right,
which is absolute and unconditional (subject to the right of the Company to
defer payment thereof pursuant to Section 5.3 and subject to the forfeiture of
any Deferred Contract Adjustment Payments upon Early Settlement pursuant to
Section 5.9(b) or upon the occurrence of a Termination Event), to receive
payment of each installment of the Contract Adjustment Payments with respect to
the Purchase Contract constituting a part of such Security on the respective
Payment Date for such Security and to purchase Common Stock pursuant to such
Purchase Contract and, in each such case, to institute suit for the enforcement
of any such payment and right to purchase Common Stock, and such rights shall
not be impaired without the consent of such Holder.
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Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such
Holder shall continue as though no such proceeding had been instituted.
Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of Section 3.10, no right or remedy herein conferred upon or reserved
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy
upon a default shall impair any such right or remedy or constitute a waiver of
any such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Income PRIDES
or Growth PRIDES, by its acceptance of such Income PRIDES or Growth PRIDES
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 Agent for any action taken, suffered or omitted by it
as
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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 Agent, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of distributions on
any Preferred Securities or Contract Adjustment Payments on any Purchase
Contract on or after the respective Payment Date therefor in respect of any
Security held by such Holder, or for enforcement of the right to purchase
shares of Common Stock under the Purchase Contracts constituting part of any
Security held by such Holder.
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Agreement; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the 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 Agent
Section 7.1. Certain Duties and Responsibilities.
(a)(1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically set
forth in this Agree-
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ment and the Pledge Agreement, and no implied covenants or obligations
shall be read into this Agreement against the Agent; and
(2) in the absence of bad faith or negligence on its part, the
Agent may, with respect to the Securities, conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the
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 Agent, the Agent shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Agreement.
(b) No provision of this Agreement shall be construed to relieve
the Agent from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the 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 Agent was negligent in ascertaining the pertinent facts;
and
(3) no provision of this Agreement shall require the 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 adequate indemnity is not
provided 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 Agent shall be subject to the provisions of this
Section.
(d) The Agent is authorized to execute and deliver the Pledge
Agreement in its capacity as Agent.
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Section 7.2. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder, of which a Responsible Officer of the Agent has actual knowledge,
the Agent shall transmit by mail to the Company and the Holders of Securities,
as their names and addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
Section 7.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(a) the 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;
(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 Agent
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the 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 Agent may consult with counsel and the written 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 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,
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debenture, note, other evidence of indebtedness or other paper or document, but
the Agent, in its discretion, may make reasonable further inquiry or
investigation into such facts or matters related to the execution, delivery and
performance of the Purchase Contracts as it may see fit, and, if the Agent
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney; and
(f) the Agent may execute any of the powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed with
due care by it hereunder.
Section 7.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken
as the statements of the Company and the Agent assumes no responsibility for
their accuracy. The Agent makes no representations as to the validity or
sufficiency of either this Agreement or of the Securities, or of the Pledge
Agreement or the Pledge. The Agent shall not be accountable for the use or
application by the Company of the proceeds in respect of the Purchase
Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be segregated
from the other funds except to the extent required by law. The Agent shall be
under no obligation to invest or pay interest on any money re-
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ceived by it hereunder except as otherwise agreed in writing with the Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the 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
(3) to indemnify the Agent and any predecessor Agent for, and
to hold it harmless against, any loss, liability or expense 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.
Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an 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 (or being a member of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having
a 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,
pursu-
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ant 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 Agent
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
Section 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The 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 Agent required by Section 7.10
shall not have been delivered to the Agent within 30 days after the giving of
such notice of resignation, the resigning Agent may petition any court of
competent jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of
a majority in number of the Outstanding Securities delivered to the Agent and
the Company.
(d) if at any time
(1) the Agent fails to comply with Section 310(b) of the TIA,
as if the 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 Security for at least six
months, or
(2) the Agent shall cease to be eligible under Section 7.8
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
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(3) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a Security 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 Agent and
the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of Section 7.10. If no successor
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 Security 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 Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their names and addresses
appear in the applicable Register. Each notice shall include the name of the
successor Agent and the address of its Corporate Trust Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent,
every such successor Agent so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Agent an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Agent
shall become effective and such successor Agent, without any further act, deed
or convey-
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ance, shall become vested with all the rights, powers, agencies and duties of
the retiring Agent; but, on the request of the Company or the successor Agent,
such retiring Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and deliver to
such successor Agent all property and money held by such retiring Agent
hereunder.
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the
time of such acceptance such successor Agent shall be qualified and eligible
under this Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the 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 Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the 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 Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation to
such Agent may adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Securities.
Section 7.12. Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of
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Holders received by the Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof that
each such applicant has owned a Security 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 Securities and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the 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 Agent in accordance with Section 7.12(a).
(c) Every Holder agrees with the Company and the Agent that none
of the Company, the 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 Agent.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligations and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees, and
each Holder of a Certificate, by his acceptance thereof, shall be deemed to
have agreed, that the Agent's execution of the Certificates on behalf of the
Holders shall be solely as agent and attorney-in-fact for the Holders, and that
the Agent shall have no obligation to perform such Purchase Contracts on behalf
of the Holders, except to the extent expressly provided in Article Five hereof.
Section 7.14. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the Company,
will comply with all applicable certification, information reporting and
withholding (including
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"backup" withholding) requirements imposed by applicable tax laws, regulations
or administrative practice with respect to (i) any payments made with respect
to the Securities or (ii) the issuance, delivery, holding, transfer, redemption
or exercise of rights under the Securities. 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 Agent shall comply with any written 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 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any
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right or power herein conferred upon the Company; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.6(b); or
(5) except as provided for in Section 5.6, to cure any
ambiguity, to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein, or to make any other
provisions with respect to such matters or questions arising under
this Agreement, provided such action shall not adversely affect the
interests of the Holders.
Section 8.2. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than 66 2/3% of the
outstanding Purchase Contracts voting together as one Class, by Act of said
Holders delivered to the Company and the Agent, the Company when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts, or the Pledge Agent provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided, however, that no
such supplemental agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's Obligations under the Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral (except for the rights of
Holders of Income PRIDES to substitute the Treasury Securities for the
Pledge Preferred Securities or the rights of holders of Growth PRIDES
to substitute Preferred Securities for the Pledged Treasury
Securities) or otherwise adversely affect
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the Holder's rights in or to such Collateral or adversely alter the
rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments or any Deferred
Contract Adjustment Payment, or change any place where, or the coin or
currency in which, any Contract Adjustment Payments is payable;
(4) impair the right to institute suit for the enforcement of
any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price to
purchase shares of Common Stock upon settlement of any Purchase
Contract, change the Purchase Contract Settlement Date or otherwise
adversely affect the Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
provided, that if any amendment or proposal referred to above would adversely
affect only the Income PRIDES or the Growth PRIDES, then only the affected
class of Holder will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the consent of Holders
of not less than 66 2/3% of such class.
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.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby
of the agencies created by this Agreement, the Agent shall be entitled to
receive and (subject to Section 7.1) 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 Agent may, but shall not be
obligated to, enter into any such
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supplemental agreement which affects the Agent's own rights, duties or
immunities under this Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every
Holder of Certificates theretofore or thereafter authenticated, executed on
behalf of the Holders and delivered hereunder shall be bound thereby.
Section 8.5. Reference to Supplemental Agreements.
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 Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as
to conform, in the opinion of the 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 Agent in
exchange for Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions.
The Company covenants that it will not merge or consolidate with any
other Person or sell, assign, transfer, lease or convey all or substantially
all of its properties and assets to any Person or group of affiliated Persons
in one transaction or a series of related transactions, unless (i) either the
Company shall be the continuing corporation, or the successor (if other than
the Company) shall be a corporation organized and exist-
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ing under the laws of the United States of America or a State thereof or the
District of Columbia and such corporation shall expressly assume all the
obligations of the Company under the Purchase Contracts, this Agreement and the
Pledge Agreement by one or more supplemental agreements in form satisfactory to
the Agent and the Collateral Agent, executed and delivered to the Agent and the
Collateral Agent by such corporation, and (ii) the Company or such successor
corporation, as the case may be, shall not, immediately after such merger or
consolidation, or such sale, assignment, transfer, lease or conveyance, be in
default in the performance of any covenant or condition hereunder, under any of
the Securities or under the Pledge Agreement.
Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by the successor corporation
in accordance with Section 9.1, such successor corporation shall succeed to and
be substituted for the Company with the same effect as if it had been named
herein 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 MCN Corporation,
any or all of the Certificates evidencing Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
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 Agent shall authenticate and execute on behalf of the
Holders and deliver any Certificates which previously shall have been signed
and delivered by the officers of the Company to the Agent for authentication
and execution, and any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Agent for
that purpose. All the Certificates so issued shall in all respects have the
same legal rank and benefit under this Agreement as the Certificates
theretofore or thereafter issued in accordance with the terms of this Agreement
as though all of such Certificates had been issued at the date of the execution
hereof.
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In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued
as may be appropriate.
Section 9.3. Opinion of Counsel to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion
of Counsel as conclusive evidence that any such consolidation, merger, sale,
assignment, transfer, lease or conveyance, and any such assumption, complies
with the provisions of this Article and that all conditions precedent to the
consummation of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance have been met.
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New
York an office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement of the Purchase Contracts
or Early Settlement and for transfer of Collateral upon occurrence of a
Termination Event, where Certificates may be surrendered for registration of
transfer or exchange, for a Collateral Substitution or re-establishment of an
Income PRIDES and where notices and demands to or upon the Company in respect
of the Securities and this Agreement may be served. The Company will give
prompt written notice to the Agent of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
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maintain any such required office or agency or shall fail to furnish the 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 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 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 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 Securities the
Corporate Trust Office and appoints the Agent at its Corporate Trust Office as
paying agent in such city.
Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable (x) against tender of payment in respect of all Purchase
Contracts constituting a part of the Securities evidenced by Outstanding
Certificates and (y) in payment of Deferred Contract Adjustment Payments, if
any, owed by the Company to the Holders.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities and in payment of any
Deferred Contract Adjustment Payments will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable.
Section 10.5. Statements of Officers of the Company as to Default.
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The Company will deliver to the 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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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
MCN CORPORATION
Attested by
/s/ Daniel L. Schiffer By: /s/ Sebastian Coppola
- ------------------------- --------------------------------
Senior Vice President, Name: Sebastian Coppola
General Counsel and Title: Senior Vice President and
Secretary Treasurer
THE FIRST NATIONAL BANK OF
CHICAGO
Attested by
/s/ R.D. Manella By: /s/ R. Tarnas
- ------------------------- --------------------------------
Vice President and Name: R. Tarnas
Senior Counsel Title: Vice President
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EXHIBIT A
This Certificate is a Global Certificate within the meaning of the
Purchase Contract Agreement (as hereinafter defined) and is registered in the
name of the Clearing Agency or a nominee thereof. This Certificate may not be
exchanged in whole or in part for a Certificate registered, and no transfer of
this Certificate in whole or in part may be registered, in the name of any
person other than such Clearing Agency or a nominee thereof, except in the
limited circumstances described in the Purchase Contract Agreement.
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.
No. _____ Number of Income PRIDES ___ Cusip No. ______
Form of Face of Income PRIDES Certificate
_____% Income PRIDES
This Income PRIDES Certificate certifies that ___________ is the
registered Holder of the number of Income PRIDES set forth above. Each Income
PRIDES represents (i) beneficial ownership by the Holder of one __% Trust
Originated Preferred Security (the "Preferred Security") of MCN Financing III,
a Delaware statutory business trust (the "Trust"), having a liquidation amount
of $50, subject to the Pledge of such Preferred Security by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract with MCN Corporation, a Michigan
corporation, doing business as MCN Energy Group Inc. (the "Company"). All
capitalized terms used herein which are defined in the Purchase Contract
Agreement have the meaning set forth therein.
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Pursuant to the Pledge Agreement, the Preferred Securities
constituting part of each Income PRIDES evidenced hereby have been pledged to
the Collateral Agent, for the benefit of the Company, to secure the obligations
of the Holder under the Purchase Contract comprising a portion of such Income
PRIDES.
The Pledge Agreement provides that all payments of the Stated Amount
of, or cash distributions on, any Pledged Preferred Securities (as defined in
the Pledge Agreement) constituting part of the Income PRIDES received by the
Collateral Agent shall be paid by the Collateral Agent by wire transfer in same
day funds (i) in the case of (A) cash distributions with respect to Pledged
Preferred Securities and (B) any payments of the Stated Amount with respect to
any Preferred Securities that have been released from the Pledge pursuant to
the Pledge Agreement, to the Agent to the account designated by the Agent, no
later than 2:00 p.m., New York City time, on the Business Day such payment is
received by the Collateral Agent (provided that in the event such payment is
received by the Collateral Agent on a day that is not a Business Day or after
12:30 p.m., New York City time, on a Business Day, then such payment shall be
made no later than 10:30 a.m., New York City time, on the next succeeding
Business Day) and (ii) in the case of payments of the Stated Amount of any
Pledged Preferred Securities, to the Company on the relevant Payment Date (as
defined herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Income PRIDES
of which such Pledged Preferred Securities are a part under the Purchase
Contracts forming a part of such Income PRIDES. Distributions on any Preferred
Security forming part of an Income PRIDES evidenced hereby which are payable
quarterly in arrears on March 31, June 30, September 30 and December 31 each
year, commencing June 30, 1997 (a "Payment Date"), shall, subject to receipt
thereof by the Agent from the Collateral Agent, be paid to the Person in whose
name this Income PRIDES Certificate (or a Predecessor Income PRIDES
Certificate) is registered at the close of business on the Record Date for such
Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on May 16, 2000
(the "Purchase Contract Settlement Date"), at a price equal to $50 (the
A-2
<PAGE> 88
"Stated Amount"), a number of shares of Common Stock, par value $.01 per share
("Common Stock"), of the Company, equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event, a Cash Settlement or an Early Settlement with respect to the
Income PRIDES of which such Purchase Contract is a part, all as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof.
The purchase price (the "Purchase Price") for the shares of Common Stock
purchased pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date by application
of payment received in respect of the Stated Amount of the Pledged Preferred
Securities pledged to secure the obligations under such Purchase Contract of
the Holder of the Income PRIDES of which such Purchase Contract is a part. A
Holder may cause the Preferred Security pledged to secure the obligations under
the Purchase Contract of the Holder of the Income PRIDES of which such Purchase
Contract is a part to be repaid and the proceeds therefrom to be used to pay
the Purchase Price of the shares of Common Stock of the Company.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of an Income PRIDES evidenced hereby an amount
(the "Contract Adjustment Payments") equal to 3/4% per annum of the Stated
Amount, computed on the basis of a 360 day year of twelve 30 day months,
subject to deferral at the option of the Company as provided in the Purchase
Contract Agreement and more fully described on the reverse hereof. Such
Contract Adjustment Payments shall be payable to the Person in whose name this
Income PRIDES Certificate (or a Predecessor Income PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment Date.
Distributions on the Preferred Securities and Contract Adjustment
Payments will be payable at the office of the Agent in The City of New York or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto as such address appears on the Income PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions
A-3
<PAGE> 89
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Income PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
A-4
<PAGE> 90
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
MCN CORPORATION
By:
----------------------------------
Name: Sebastian Coppola
Title: Senior Vice President and
Treasurer
By:
----------------------------------
Name: Daniel L. Schiffer
Title: Senior Vice President,
General Counsel and Secretary
Attest:
- ------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE FIRST NATIONAL BANK OF CHICAGO, not
individually but solely as
Attorney-in-Fact of such Holder
By:
----------------------------------
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK
OF CHICAGO as Agent
By:
----------------------------------
Authorized Officer
A-5
<PAGE> 91
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of March __, 1997 (as supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and The First
National Bank of Chicago, as Purchase Contract Agent (herein called the
"Agent"), to which Purchase Contract Agreement and supplemental agreements
thereto reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company, and the Holders and of the terms upon which the Income
PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount, a number of
shares of Common Stock of the Company equal to the Settlement Rate, unless, on
or prior to the Purchase Contract Settlement Date, there shall have occurred a
Termination Event, a Cash Settlement or an Early Settlement with respect to the
Security of which such Purchase Contract is a part. The "Settlement Rate" is
equal to (a) if the Applicable Market Value (as defined below) is equal to or
greater than $35.38 (the "Threshold Appreciation Price"), 1.4132 shares of
Common Stock per Purchase Contract, (b) if the Applicable Market Value is less
than the Threshold Appreciation Price but is greater than $29, the number of
shares of Common Stock per Purchase Contract equal to the Stated Amount divided
by the Applicable Market Value and (c) if the Applicable Market Amount is less
than or equal to $29, 1.7241 shares of Common Stock per Purchase Contract, in
each case subject to adjustment as provided in the Purchase Contract Agreement.
No fractional shares of Common Stock will be issued upon settlement of Purchase
Contracts, as provided in the Purchase Contract Agreement.
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 second Trading Day immediately preceding the Purchase Contract
Settlement 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
A-6
<PAGE> 92
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 independent
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.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Income PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement on the Purchase Contract Settlement Date
or an Early Settlement. A Holder of an Income PRIDES who fails to make an
effective Cash Settlement or an Early Settlement in respect of a Purchase
Contract prior to a Purchase Contract Settlement Date will be deemed to have
elected to have requested the Trust to deliver to the Company a principal
amount of the Junior Subordinated Debenture, underlying the Preferred Security
equal to the Stated Amount of the Purchase Contract for application to the
Purchase Price of the Common Stock.
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 unless it 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.
Each Purchase Contract evidenced hereby and the obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred.
A-7
<PAGE> 93
Upon the occurrence of a Termination Event, the Company shall give written
notice to the Agent and to the Holders, at their addresses as they appear in
the Income PRIDES Register. Upon and after the occurrence of a Termination
Event, the Collateral Agent shall release the Pledged Preferred Security (as
defined in the Pledge Agreement) forming a part of each Income PRIDES, or the
Liquidation Distribution received in respect of such Pledged Preferred
Security, from the Pledge. An Income PRIDES shall thereafter represent the
right to receive the Preferred Security forming a part of such Income PRIDES,
or the Liquidation Distribution received in respect of such Preferred Security,
and any accrued Contract Adjustment Payments on the Purchase Contract forming a
part of such Income PRIDES in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement. Contract Adjustment Payments
shall cease to accrue in respect of any period from and after the date of a
Termination Event.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Preferred Securities. Upon receipt of notice of any meeting at which holders
of Preferred Securities are entitled to vote or solicitation of consents,
waivers or proxies of holders of Preferred Securities, the Agent shall, as soon
as practicable thereafter, mail to the Income PRIDES holders a notice (a)
containing such information as is contained in the notice or solicitation, (b)
stating that each Income PRIDES holder on the record date set by the Agent
therefor (which, to the extent possible, shall be the same date as the record
date for determining the holders of Preferred Securities entitled to vote)
shall be entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Preferred Securities constituting a part of such holder's
Income PRIDES and (c) stating the manner in which such instructions may be
given. Upon the written request of the Income PRIDES holders on such record
date, the Agent shall endeavor insofar as practicable to vote or cause to be
voted, in accordance with the instructions set forth in such requests, the
maximum number of Preferred Securities as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of an Income PRIDES, the Agent shall abstain from voting the Preferred
Security evidenced by such Income PRIDES.
Upon the occurrence of a Tax Event, Investment Company Event or
liquidation of the Trust, a principal amount of the
A-8
<PAGE> 94
Junior Subordinated Debentures constituting the assets of the Trust and
underlying the Preferred Securities equal to the aggregate Stated Amount of the
Pledged Preferred Securities shall be delivered to the Collateral Agent in
exchange for Pledged Preferred Securities. Thereafter, the Junior Subordinated
Debentures shall be held by the Collateral Agent to secure the obligations of
each Holder of Income PRIDES to purchase shares of Common Stock under the
Purchase Contracts constituting a part of such Income PRIDES. Following the
liquidation of the Trust, the Holders and the Collateral Agent shall have such
security interests, rights and obligations with respect to the Junior
Subordinated Debentures as the Holders and the Collateral Agent had in respect
of the Pledged Preferred Securities, and any reference in the Purchase Contract
Agreement or Pledge Agreement to the Preferred Securities shall be deemed to be
a reference to the Junior Subordinated Debentures.
The Income PRIDES Certificates are issuable only in registered form
and only in denominations of a single Income PRIDES and any integral multiple
thereof. The transfer of any Income PRIDES Certificate will be registered and
Income PRIDES Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Income PRIDES Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A holder who elects to
substitute a Treasury Security for Preferred Securities, thereby creating
Growth PRIDES, shall be responsible for any fees or expenses payable in
connection therewith. Except as provided in the Purchase Contract Agreement,
for so long as the Purchase Contract underlying an Income PRIDES remains in
effect, such Income PRIDES shall not be separable into its constituent parts,
and the rights and obligations of the Holder of such Income PRIDES in respect
of the Preferred Security and Purchase Contract constituting such Income PRIDES
may be transferred and exchanged only as an Income PRIDES. The holder of an
Income PRIDES may substitute for the Pledged Preferred Securities securing its
obligation under the related Purchase Contract Treasury Securities in an
aggregate principal amount equal to the aggregate Stated Amount of the Pledged
Preferred Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after
A-9
<PAGE> 95
such Collateral Substitution, the Security for which such Pledged Treasury
Securities secures the holder's obligation under the Purchase Contract shall be
referred to as a "Growth PRIDES." A Holder may make such Collateral
Substitution only in integral multiples of 20 Income PRIDES for each Growth
PRIDES. Such Collateral Substitution may cause the aggregate principal amount
of this Certificate to be increased or decreased; provided, however, the
aggregate principal amount outstanding under this Income PRIDES Certificate
shall not exceed $_____. All such adjustments to the aggregate principal
amount of this Income PRIDES Certificate shall be duly recorded by placing an
appropriate notation on the Schedule attached hereto.
A Holder of a Growth PRIDES may recreate Income PRIDES by delivering
to the Collateral Agent Preferred Securities with a Stated Amount equal to the
aggregate principal amount of the Pledged Treasury Securities in exchange for
the release of such Pledged Treasury Securities in accordance with the terms of
the Purchase Contract Agreement and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments payable in respect of each
Purchase Contract to the Person in whose name the Income PRIDES Certificate
evidencing such Purchase Contract is registered at the close of business on the
Record Date for such Payment Date. Contract Adjustment Payments will be
payable at the office of the Agent in The City of New York 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 Income PRIDES Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred
shall bear additional Contract Adjustment Payments thereon at the rate of 8%
per annum (computed on the basis of a 360 day year of twelve 30 day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments together with the additional
Contract Adjustment Payments accrued thereon, are referred to herein as the
A-10
<PAGE> 96
"Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments shall be due on the next succeeding Payment Date except to the extent
that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Income PRIDES Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of Common Stock (in addition to a number of shares of Common Stock equal
to the Settlement Rate) equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of the Income PRIDES Certificate of
Securities divided by (y) the Applicable Market Value. No fractional shares of
Common Stock will be issued with respect to the payment of Deferred Contract
Adjustment Payments on the Purchase Contract Settlement Date, as provided in
the Purchase Contract Agreement.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, (a) the Company shall not declare or pay dividends on,
make distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchase or acquisitions of shares of Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plans
or the satisfaction by the Company of its obligations pursuant to any contract
or security outstanding on the date of such event requiring the Company to
purchase shares of Common Stock, (ii) as a result of a reclassification 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 or (iii) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged) or make any
guarantee payments with respect to the foregoing), (b) the Company shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by the
Company that rank pari passu with such Contract
A-11
<PAGE> 97
Adjustment Payments and (c) the Company shall not make any guarantee payments
with respect to the foregoing.
The Purchase Contracts and the obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
after two business days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Income PRIDES Register. Upon and after the occurrence of a Termination Event,
the Collateral Agent shall release the Preferred Securities from the Pledge in
accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this
Income PRIDES Certificate, the Holder of this Income PRIDES Certificate shall
deliver this Income PRIDES Certificate to the Agent at the Corporate Trust
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early set forth below duly completed and accompanied by
payment in the form of a certified or cashier's check payable to the order of
the Company in an amount (the "Early Settlement Amount") equal to (i) the
product of (A) the Stated Amount times (B) the number of Purchase Contracts
with respect to which the Holder has elected to effect Early Settlement, plus
(ii) if such delivery is made with respect to any Purchase Contracts during the
period from the close of business on any Record Date for any Payment Date to
the opening of business on such Payment Date, an amount equal to the sum of (x)
the Contract Adjustment Payments payable on such Payment Date with respect to
such Purchase Contracts plus from the period from, but not including the Early
Settlement Date, to the Payment Date (y) the distributions with respect to the
relat-
A-12
<PAGE> 98
ed Pledged Preferred Securities payable on such Payment Date from the period
from, but not including the Early Settlement Date, to the Payment Date. Upon
Early Settlement of Purchase Contracts by a Holder of the related Securities,
the Pledged Preferred Securities underlying such Securities shall be released
from the Pledge as provided in the Pledge Agreement and the Holder shall be
entitled to receive, a number of shares of Common Stock on account of each
Purchase Contract forming part of a Income PRIDES as to which Early Settlement
is effected equal to the Early Settlement Rate; provided however, that upon the
Early Settlement of the Purchase Contracts, the Holder thereof will forfeit the
right to receive any Deferred Contract Adjustment Payments on such Purchase
Contracts. The Early Settlement Rate shall initially be equal to 1.4132 shares
of Common Stocks and shall be adjusted in the same manner and at the same time
as the Settlement Rate is adjusted as provided in the Purchase Contract
Agreement.
Upon registration of transfer of this Income PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract
Agreement and the Purchase Contracts evidenced hereby and the transferor shall
be released from the obligations under the Purchase Contracts evidenced by this
Income PRIDES Certificate. 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 Income PRIDES Certificate, by his acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Income PRIDES evidenced hereby on his behalf as
his attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the
event that the Company becomes the subject of a case under the Bankruptcy Code,
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 Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on his behalf as his attorney-in-fact,
and consents to the Pledge of the Preferred Securities underlying this Income
PRIDES Certificate pursuant to the Pledge Agreement. The Holder further
covenants and
A-13
<PAGE> 99
agrees, that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect to the Stated Amount of the Pledged Preferred Securities on the
Purchase Contract Settlement 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.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of at least 66 2/3% of
the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Income PRIDES Certificate
is registered as the owner of the Income PRIDES evidenced hereby for the
purpose of receiving payments of distributions payable quarterly on the
Preferred Securities, receiving payments of Contract Adjustment Payments and
any Deferred Contract Adjustment Payments, performance of 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 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.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
A-14
<PAGE> 100
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
---------------------------------------------------------
- ------------------------------------------------------------------------------
Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee
------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Please Print or Type Name and Address Including Postal Zip Code
- ------------------------------------------------------------------------------
of Assignee the within Income PRIDES Certificates and all rights
- ------------------------------------------------------------------------------
thereunder, hereby irrevocably constituting and appointing
- ------------------------------------------------------------------------------
attorney to transfer said Income PRIDES Certificates on the books of MCN
Corporation with full power of substitution in the premises.
Dated:
----------------------- --------------------------------------
Signature
NOTICE: The signature to this
assignment must correspond with the name
as it appears upon the face of the
within Income PRIDES Certificates in
every particular, without alteration or
enlargement or any change whatsoever.
A-15
<PAGE> 101
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Income PRIDES evidenced
by this Income PRIDES 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 name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please print such Person's name
and address:
Please print name and address of
Registered Holder:
- ------------------------ -------------------------------------
Name Name
- ------------------------ -------------------------------------
Address Address
- ---------------------------------- -------------------------------------
- ---------------------------------- -------------------------------------
- ---------------------------------- -------------------------------------
Social Security or other
Taxpayer Identification
Number, if any -------------------------------------
A-16
<PAGE> 102
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Income PRIDES evidenced by this Income
PRIDES Certificate specified below. The option to effect Early Settlement may
be exercised only with respect to Purchase Contracts underlying Income PRIDES
with an aggregate Stated Amount equal to $1,000 or an integral multiple
thereof. The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon such Early Settlement be registered in the name
of, and delivered, together with a check in payment for any fractional share
and any Income PRIDES Certificate representing any Income PRIDES evidenced
hereby as to which Early Settlement of the related Purchase Contracts is not
effected, to the undersigned at the address indicated below unless a different
name and address have been indicated below. Pledged Preferred Securities
deliverable upon such Early Settlement will be transferred in accordance with
the transfer instructions set forth 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
A-17
<PAGE> 103
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock REGISTERED HOLDER
or Income PRIDES Certificates
are to be registered in the name of
and delivered to and Pledged
Preferred Securities are to be
transferred to a Person other than
the Holder, please print such Person's
name and address:
Please print name and address of
Registered Holder:
- ------------------------------- ---------------------------------
Name Name
- ------------------------------- ---------------------------------
Address Address
- ------------------------------- ---------------------------------
- ------------------------------- ---------------------------------
Social Security or other
Taxpayer Identification
Number, if any ---------------------------------
Transfer Instructions for Pledged Preferred Securities Transferable Upon Early
Settlement or a Termination Event:
- ---------------------------------------------------
- ---------------------------------------------------
- ---------------------------------------------------
A-18
<PAGE> 104
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OF DECREASED IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of Amount of of this Global
decrease in Principal increase in Principal Certificate Signature of authorized
Amount of this Global Amount of this Global following such officer of Trustee or
Date Certificate Certificate decrease or increase Securities Custodian
<S> <C> <C> <C> <C>
</TABLE>
EXHIBIT B
This Certificate is a Global Certificate within the meaning of the
Purchase Contract Agreement (as hereinafter defined) and is registered in the
name of the Clearing Agency or a nominee thereof. This Certificate may not be
exchanged in whole or in part for a Certificate registered, and no transfer of
this Certificate in whole or in part may be registered, in the name of any
person other than such Clearing Agency or a nominee thereof,
A-1
<PAGE> 105
except in the limited circumstances described in the Purchase Contract
Agreement.
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.
No. ______ Number of Growth PRIDES _______ Cusip No. _______
Form of Face of Growth PRIDES Certificate
This Growth PRIDES Certificate certifies that __________ is the
registered Holder of the number of Growth PRIDES set forth above. Each Growth
PRIDES represents (i) beneficial ownership, of a Treasury Security having a
principal amount at maturity equal to $1,000, subject to the Pledge of such
Preferred security by such Holder pursuant to the Pledge Agreement, and (ii)
the rights and obligations of the Holder under 20 Purchase Contracts with MCN
Corporation, a Michigan Corporation, doing business as MCN Energy Group Inc.
(the "Company"). All capitalized terms used herein which are defined in the
Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell, on May 16,
2000 (the "Purchase Contract Settlement Date"), at a price equal to $50 (the
"Stated Amount"), a number of shares of Common stock, par value $.01 per share
("Common Stock"), of the Company equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Growth PRIDES of
which such Purchase Contract is a part, all as provided in the Purchase
Contract Agreement and more fully described on the reverse hereof. The
purchase price for the shares of Common Stock purchased pursuant to each
Purchase
B-2
<PAGE> 106
Contract evidenced hereby will be paid by application of the Proceeds from the
Treasury Securities pledged to secure the obligations under such Purchase
Contract in accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each
Purchase Contract evidenced hereby an amount (the "Contract Adjustment
Payments") equal to 3/4% per annum of the Stated Amount, computed on the basis
of the actual number of days elapsed in a year of 360 day year of twelve 30 day
months, as the case may be, subject to deferral at the option of the Company as
provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. Such Contract Adjustment Payments shall be payable to the
Person in whose name this Growth PRIDES Certificate (or a Predecessor Growth
PRIDES Certificate) is registered at the close of business on the Record Date
for such Payment Date.
Contract Adjustment Payments will be payable at the office of the
Agent in The City of New York or, at the option of the Company, by check mailed
to the address of the Person entitled thereto as such address appears on the
Growth PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Growth PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-3
<PAGE> 107
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
MCN CORPORATION
By:
----------------------------------
Name: Daniel L. Schiffer
Title: Senior Vice President,
General Counsel and Secretary
By:
----------------------------------
Name: Sebastian Coppola
Title: Senior Vice President and
Treasurer
Attest:
- ----------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE FIRST NATIONAL BANK OF CHICAGO
not individually but solely as
Attorney-in-Fact of such Holder
By:
----------------------------------
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the within-mentioned
Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK
OF CHICAGO as Agent
By:
----------------------------------
Authorized Officer
B-4
<PAGE> 108
(Form of Reverse of
Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of March 25, 1997 (as supplemented from time to
time, the "Purchase Contract Agreement") between the Company and The First
National Bank of Chicago, as Purchase Contract Agent (including its successors
thereunder, herein called the "Agent"), to which the Purchase Contract
Agreement and supplemental agreements thereto reference is hereby made for a
description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Agent, the Company and the Holders and
of the terms upon which the Growth PRIDES Certificates are, and are to be,
executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount, a number of
shares of Common Stock of the Company equal to the Settlement Rate, unless, on
or prior to the Purchase Contract Settlement Date, there shall have occurred a
Termination Event or an Early Settlement with respect to the Security of which
such Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the
Applicable Market Value (as defined below) is equal to or greater than $35.38
(the "Threshold Appreciation Price"), 1.4132 shares of Common Stock per
Purchase Contract, (b) if the Applicable Market Value is less than the
Threshold Appreciation Price but is greater than $29, _____ shares of Common
Stock per Purchase Contract equal to the Stated Amount divided by the
Applicable Market Value and (c) if the Applicable Market Amount is less than or
equal to $29, 1.7241 shares of Common Stock per Purchase Contract, in each case
subject to adjustment as provided in the Purchase Contract Agreement. No
fractional shares of Common Stock will be issued upon settlement of Purchase
Contracts, as provided in the Purchase Contract Agreement.
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 second Trading Day immediately preceding the Purchase Contract
Settlement 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
B-5
<PAGE> 109
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 independent 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.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Growth PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting either an Early Settlement of each such Purchase Contract
or by applying a principal amount of the Pledged Treasury Securities underlying
such Holder's Growth PRIDES equal to the Stated Amount of such Purchase
Contract to the purchase of the Common Stock.
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 unless it 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.
Each Purchase Contract evidenced hereby and the obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses
as they appear in the Growth PRIDES Register. Upon and after the occurrence of
a Termination Event, the Collateral Agent shall release the Pledged Treasury
Securities (as defined in the Pledge Agreement) forming a part of each Growth
PRIDES. A Growth PRIDES shall thereafter represent the right to receive any
accrued Contract Adjustment Payments on the Purchase Contract forming a part of
such Growth PRIDES in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. Contract Adjustment Payments shall cease
to accrue in respect of any period from and after the date of a Termination
Event.
B-6
<PAGE> 110
The Growth PRIDES Certificates are issuable only in registered form
and only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered and
Growth PRIDES Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Growth PRIDES Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A holder who elects to
substitute Preferred Securities for a Treasury Security, thereby creating
Income PRIDES, shall be responsible for any fees or expenses associated
therewith. Except as provided in the Purchase Contract Agreement, for so long
as the Purchase Contract underlying a Growth PRIDES remains in effect, such
Growth PRIDES shall not be separable into its constituent parts, and the rights
and obligations of the Holder of such Growth PRIDES in respect of the Treasury
Security and Purchase Contract constituting such Growth PRIDES may be
transferred and exchanged only as a Growth PRIDES. The holder of a Growth
PRIDES may substitute for the Pledged Treasury Securities securing its
obligations under the related Purchase Contract Preferred Securities with an
aggregate Stated Amount equal to the aggregate principal amount of the Pledged
Treasury Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such substitution, the
Holder's Security shall be referred to as an "Income PRIDES." Such
substitution may cause the aggregate principal amount of this Certificate to be
increased or decreased; provided, however, the aggregate principal amount
outstanding under this Growth PRIDES Certificate shall not exceed $______. All
such adjustments to the aggregate principal amount of this Growth PRIDES
Certificate shall be duly recorded by placing an appropriate notation on the
Schedule attached hereto.
A Holder of an Income PRIDES may recreate a Growth PRIDES by
delivering to the Collateral Agent Treasury Securities in an aggregate
principal amount equal to the aggregate Stated Amount of the Pledged Preferred
Securities in exchange for the release of such Pledged Preferred Securities in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. Any such recreation of a Growth PRIDES may be effected only in
multiples of 20 Income PRIDES for each Growth PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments payable in respect of each
Purchase Contract to the Person in whose name the Growth PRIDES Certificate
evidencing such Purchase
B-7
<PAGE> 111
Contract is registered at the close of business on the Record Date for such
Payment Date. Contract Adjustment Payments will be payable at the office of
the Agent in The City of New York 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 Growth PRIDES Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred
shall bear additional Contract Adjustment Payments thereon at the rate of ____%
per annum (computed on the basis of a 360 day year of twelve 30 day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments together with the additional
Contract Adjustment Payments accrued thereon, are referred to herein as the
"Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments shall be due on the next succeeding Payment Date except to the extent
that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Growth PRIDES Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of Common Stock (in addition to a number of shares of Common Stock equal
to the Settlement Rate) equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of the Growth PRIDES Certificate of
Securities divided by (y) the Applicable Market Value. No fractional shares of
Common Stock will be issued with respect to the payment of Deferred Contract
Adjustment Payments on the Purchase Contract Settlement Date, as provided in
the Purchase Contract Agreement.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, (a) the Company shall not declare or pay dividends on,
make distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchase or acquisitions of shares of Common Stock in connection with the
satisfaction by the Company of its obligations under any
B-8
<PAGE> 112
employee benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase shares of Common Stock, (ii) as a result of a
reclassification 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 or (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged) or make any guarantee payments with respect to the foregoing), (b)
the Company shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities (including
guarantees) issued by the Company that rank pari passu with or junior to such
Contract Adjustment Payments and (c) the Company shall not make any guarantee
payments with respect to the foregoing.
The Purchase Contracts and the obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
after two business days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Growth PRIDES Register. Upon and after the occurrence of a Termination Event,
the Collateral Agent shall release the Treasury Securities from the Pledge in
accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this
Growth PRIDES Certificate, the Holder of this Growth PRIDES Certificate shall
deliver this Growth PRIDES Certificate to the Agent at the Corporate Trust
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early set forth below duly completed and accompanied by
payment in the form of a certified or cashier's check payable to the order of
the Company in an amount (the "Early Settlement
B-9
<PAGE> 113
Amount") equal to (i) the product of (A) the Stated Amount times (B) the number
of Purchase Contracts with respect to which the Holder has elected to effect
Early Settlement, plus (ii) if such delivery is made with respect to any
Purchase Contracts during the period from the close of business on any Record
Date for any Payment Date to the opening of business on such Payment Date, an
amount equal to the Contract Adjustment Payments payable on such Payment Date
with respect to such Purchase Contracts from the period from, but not including
the Early Settlement Date, to the Payment Date. Upon Early Settlement of
Purchase Contracts by a Holder of the related Securities, the Pledged Treasury
Securities underlying such Securities shall be released from the Pledge as
provided in the Pledge Agreement and the Holder shall be entitled to receive, a
number of shares of Common Stock on account of each Purchase Contract forming
part of a Growth PRIDES as to which Early Settlement is effected equal to the
Early Settlement Rate; provided however, that upon the Early Settlement of the
Purchase Contracts, the Holder thereof will forfeit the right to receive any
Deferred Contract Adjustment Payments on such Purchase Contracts. The Early
Settlement Rate shall initially be equal to 28.2646 shares of Common Stock per
Growth PRIDES and shall be adjusted in the same manner and at the same time as
the Settlement Rate is adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract
Agreement and the Purchase Contracts evidenced hereby and the transferor shall
be released from the obligations under the Purchase Contracts evidenced by this
Growth PRIDES Certificate. 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 Growth PRIDES Certificate, by his acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Growth PRIDES evidenced hereby on his behalf as
his attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the
event that the Company becomes the subject of a case under the Bankruptcy Code,
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 Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on his behalf as his attorney-
B-10
<PAGE> 114
in-fact, and consents to the Pledge of the Treasury Securities underlying this
Growth PRIDES Certificate pursuant to the Pledge Agreement. The Holder further
covenants and agrees, that, to the extent and in the manner provided in the
Purchase Contract Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect to the Stated Amount of the Pledged Treasury
Securities on the Purchase Contract Settlement 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.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of at least 66 2/3% of
the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Growth PRIDES Certificate
is registered as the owner of the Growth PRIDES evidenced hereby for the
purpose of receiving payments of interest on the Treasury Securities, receiving
payments of Contract Adjustment Payments and any Deferred Contract Adjustment
Payments, performance of 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 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.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
B-11
<PAGE> 115
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
---------------------------------------------------------
- ------------------------------------------------------------------------------
Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee
------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Please Print or Type Name and Address Including Postal Zip Code
- ------------------------------------------------------------------------------
of Assignee the within Growth PRIDES Certificates and all rights
- ------------------------------------------------------------------------------
thereunder, hereby irrevocably constituting and appointing
- ------------------------------------------------------------------------------
attorney to transfer said Growth PRIDES Certificates on the books of MCN
Corporation with full power of substitution in the premises.
Dated:
----------------------- --------------------------------------
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of the
within Growth PRIDES Certificates in
every particular, without alteration or
enlargement or any change whatsoever.
B-12
<PAGE> 116
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Growth PRIDES evidenced
by this Growth PRIDES 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 name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please print such Person's name
and address:
Please print name and address of
Registered Holder:
- ---------------------------------- -------------------------------------
Name Name
- ---------------------------------- -------------------------------------
Address Address
- ---------------------------------- -------------------------------------
- ---------------------------------- -------------------------------------
Social Security or other
Taxpayer Identification
Number, if any -------------------------------------
B-13
<PAGE> 117
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Growth PRIDES evidenced by this Growth
PRIDES Certificate specified below. The option to effect Early Settlement may
be exercised only with respect to Purchase Contracts underlying Growth PRIDES
with an aggregate Stated Amount equal to $1,000 or an integral multiple
thereof. The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon such Early Settlement be registered in the name
of, and delivered, together with a check in payment for any fractional share
and any Growth PRIDES Certificate representing any Growth PRIDES evidenced
hereby as to which Early Settlement of the related Purchase Contracts is not
effected, to the undersigned at the address indicated below unless a different
name and address have been indicated below. Pledged Treasury Securities
deliverable upon such Early Settlement will be transferred in accordance with
the transfer instructions set forth 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
B-14
<PAGE> 118
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock REGISTERED HOLDER
or Growth PRIDES Certifi-
cates are to be registered
in the name of and delivered
to and Pledged Treasury
Securities are to be
transferred to a Person
other than the Holder, please
print such Person's name and
address:
Please print name and address of
Registered Holder:
- ---------------------------------- -------------------------------------
Name Name
- ---------------------------------- -------------------------------------
Address Address
- ---------------------------------- -------------------------------------
- ---------------------------------- -------------------------------------
- ---------------------------------- -------------------------------------
Social Security or other
Taxpayer Identification
Number, if any -------------------------------------
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
- ----------------------------------------------------
- ----------------------------------------------------
- ----------------------------------------------------
B-15
<PAGE> 119
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of Amount of of this Global
decrease in Principal increase in Principal Certificate Signature of authorized
Amount of this Global Amount of this Global following such officer of Trustee or
Date Certificate Certificate decrease or increase Securities Custodian
<S> <C> <C> <C> <C>
</TABLE>
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Corporate Trust
Administration Department
B-1
<PAGE> 120
Re: FELINE PRIDES of MCN Corporation, doing business as
MCN Energy Group Inc. (the "Company"), and MCN
Financing III
We hereby notify you in accordance with Section 4.1 of the
Pledge Agreement, dated as of March 25, 1997, among the Company, yourselves, as
Collateral Agent, and ourselves, as Purchase Contract Agent and as
attorney-in-fact for the holders of [Income PRIDES] [Growth PRIDES] from time
to time, that the holder of securities listed below (the "Holder") has elected
to substitute [$_____ aggregate principal amount of Treasury Securities]
[$_______Stated Amount of Preferred Securities] in exchange for the [Pledged
Preferred Securities] [Pledged Treasury Securities] held by you in accordance
with the Pledge Agreement and has delivered to us a notice stating that the
Holder has Transferred [Treasury Securities] [Preferred Securities] to you, as
Collateral Agent. We hereby instruct you, upon receipt of such [Pledged
Treasury Securities] [Pledged Preferred Securities], to release the Preferred
Securities] [Treasury Securities] related to such [Income PRIDES] [Growth
PRIDES] to us in accordance with the Holder's instructions.
Date: THE FIRST NATIONAL BANK OF CHICAGO
--------------------
By:
------------------------------
Name:
Title:
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities] for the [Pledged Preferred
Securities] [Pledged Treasury Securities]:
- ------------------------------ ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- ------------------------------
Address
- ------------------------------
- ------------------------------
<PAGE> 121
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
One First National Plaza
Suite 6363
Chicago, IL 60670
Attention: Corporate Trust
Administration Department
Re: FELINE PRIDES of MCN Corporation, doing business as
MCN Energy Group Inc. (the "Company"), and MCN
Financing III
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent, $_______ aggregate
principal amount of [Treasury Securities] [Preferred Securities] in exchange
for the [Pledged Preferred Securities] [Pledged Treasury Securities] held by
the Collateral Agent, in accordance with Section 4.1 of the Pledge Agreement,
dated March 25, 1997, between you, the Company and the Collateral Agent. The
undersigned Holder hereby instructs you to instruct the Collateral Agent to
release to you on behalf of the undersigned Holder the [Pledged Preferred
Securities] [Pledged Treasury Securities] related to such [Income PRIDES]
[Growth PRIDES].
Dated:
----------------------- --------------------------------------
Signature
Please print name and address of Registered Holder:
- ------------------------------ ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- ------------------------------
Address
- ------------------------------
- ------------------------------
<PAGE> 1
EXHIBIT 5.6
MCN CORPORATION,
THE FIRST NATIONAL BANK
OF CHICAGO
AND
THE CHASE MANHATTAN BANK
PLEDGE AGREEMENT
Dated as of March 25, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Pledge; Control and Perfection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.1. The Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.2. Control and Perfection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3. Distributions on Pledged Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4. Substitution, Release, Repledge and Settlement of Preferred Securities . . . . . . . . . . . . . . . . . . . . 12
Section 4.1. Substitution of Preferred Securities and the Establishment of Growth PRIDES . . . . . . . . . . . . . . . . . . 12
Section 4.2. Pledge of Preferred Securities and Re-establishment of Income PRIDES . . . . . . . . . . . . . . . . . . . . . 12
Section 4.3. Termination Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.4. Cash Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.5. Early Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.6. Application of Proceeds Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5. Voting Rights -- Preferred Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6. Rights and Remedies; Investment Company Event; Tax Event etc. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.1. Rights and Remedies of the Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.2. Tax Event, Investment Company Event, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
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Section 7. Representation and Warranties; Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 7.1. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 7.2. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8. The Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.1. Appointment, Powers and Immunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.2. Instructions of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.3. Reliance by Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.4. Rights in Other Capacities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.5. Non-Reliance on Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.6. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.7. Failure to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.8. Resignation of Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.9. Right to Appoint Agent or Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.10. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.11. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 9. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 9.1. Amendment Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 9.2. Amendment with Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 9.3. Execution of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.4. Effect of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.5. Reference to Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>
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Section 10.1. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 10.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 10.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 10.4. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.7. Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.8. Security Interest Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
EXHIBIT A INSTRUCTION TO COLLATERAL AGENT
EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT
iii
<PAGE> 5
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of March 25, 1997 (this "Agreement"), among MCN
Corporation, a Michigan corporation, doing business as MCN Energy Group Inc.
(the "Company"), The Chase Manhattan Bank, a New York banking corporation, not
individually but solely as collateral agent (in such capacity, together with
its successors in such capacity, the "Collateral Agent"), and The First
National Bank of Chicago, not individually but solely as purchase contract
agent and as attorney-in-fact of the Holders (as defined in the Purchase
Contract Agreement) from time to time of the Securities (as hereinafter
defined) (in such capacity, together with its successors in such capacity, the
"Purchase Contract Agent") under the Purchase Contract Agreement (as
hereinafter defined) and The Chase Manhattan Bank in its capacity as a
"securities intermediary" as defined in Section 8-102(a)(14) of Revised Article
8 (as defined herein) (in such capacity, together with its successors in such
capacity, the "Securities Intermediary").
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement, dated as of the date hereof (as modified and supplemented
and in effect from time to time, the "Purchase Contract Agreement"), pursuant
to which there will be issued 2,300,000 FELINE PRIDES (the "Securities").
Each Security, at issuance, consists of a unit (the "Income PRIDES")
comprised of (a) one stock purchase contract (the "Purchase Contract") under
which (i) the Holder will purchase from the Company on May 16, 2000, for an
amount equal to the Stated Amount, a number of shares of Common Stock equal to
the Settlement Rate and (ii) the Company will pay the Holder Contract
Adjustment Payments, and (b) beneficial ownership of a 7-1/4% Trust Originated
Preferred Security (a "Preferred Security") issued by MCN Financing III (the
"Trust"), having a liquidation amount equal to $50 (the "Stated Amount") and
maturing on May 16, 2002, unless settled earlier.
Pursuant to the terms of the Purchase Contract Agreement and the Purchase
Contracts, the Holders, from time to time, of the Securities have irrevocably
autho-
<PAGE> 6
rized the Purchase Contract Agent, as attorney-in-fact of such Holders, among
other things, to execute and deliver this Agreement on behalf of such Holders
and to grant the pledge provided hereby of the Preferred Securities and any
Treasury Securities (as defined below) delivered in exchange therefor to secure
each Holder's obligations under the related Purchase Contract, as provided
herein and subject to the terms hereof. Upon such pledge the Preferred
Securities will be beneficially owned by the Holders but will be owned of
record by the Purchase Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent and the Purchase Contract
Agent, on its own behalf and as attorney-in-fact of the Holders from time to
time of the Securities, agree as follows:
Section 1. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in the
Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board Resolution,
(iv) Cash Settlement, (v) Certificate, (vi) Collateral Settlement, (vii)
Common Stock, (viii) Contract Adjustment Payments, (ix) Early Settlement,
(x) Early Settlement Amount, (xi) Early Settlement Date, (xii) Junior
Subordinated Debentures, (xiii) Opinion of Counsel, (xiv) Outstanding
Securities, (xv) Purchase Contract, (xvi) Purchase Contract Settlement
Date, (xvii) Purchase Price, (xviii) Repayment Price, (xix) Settlement
Rate, (xx) Termination Event, and (xxi) Underwriting Agreement;
(d) the following terms have the meanings assigned to them in the
Declaration: (i) Investment
2
<PAGE> 7
Company Event, (ii) Liquidation Distribution, (iii) Institutional Trustee,
and (iv) Tax Event.
"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.
"Bankruptcy Code" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday or any other
day on which banking institutions in The City of New York (in the State of New
York) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning set forth in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the trust account (number MB 9198919)
maintained at The Chase Manhattan Bank in the name "The First National Bank of
Chicago, as Purchase Contract Agent on behalf of the holders of certain
securities of MCN Corporation, Collateral Account subject to the security
interest of The Chase Manhattan Bank, as Collateral Agent, for the benefit of
MCN Corporation, as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this instrument.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such, and thereafter
"Company" shall mean such successor.
3
<PAGE> 8
"Declaration" means the Amended and Restated Declaration of Trust of the
Trust, dated as of the date hereof, among the Company as sponsor, the trustees
named therein and the holders from time to time of undivided beneficial
interests in the assets of the Trust.
"Growth PRIDES" means a Purchase Contract with respect to which Treasury
Securities have been substituted for Preferred Securities as collateral to
secure the Holder's obligations under such Purchase Contract.
"Holder" when used with respect to a Security, or a Purchase Contract
constituting a part thereof, means The Depository Trust Company (or its
nominee) as the registered holder of an Income PRIDES or a Growth PRIDES, as
the case may be.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Permitted Investments" means any one of the following which shall mature
on the next succeeding Business Day (i) any evidence of indebtedness with an
original maturity of 365 days or less issued or directly and fully guaranteed
or insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States of
America is pledged in support thereof or such indebtedness constitutes a
general obligation of it); (ii) deposits, certificates of deposit or
acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US$ 200.0 million at the time of
deposit; (iii) investments with a maturity of 365 days or less of any Person
that is fully and unconditionally guaranteed by a bank referred to in clause
(ii); (iv) repurchase agreements and reverse repurchase agreements relating to
marketable direct obligations issued or unconditionally guaranteed by the
United States Government or issued by any agency thereof and backed by the full
faith and credit of the United States Government; (v) investments in commercial
paper, other than commercial paper issued by the Company or its affiliates, of
any corporation incorporated under the laws of the United States or any State
thereof, which commercial paper has a rating at the
4
<PAGE> 9
time of purchase at least equal to "A-1" by Standard & Poor's Ratings Services
or at least equal to "P-1" by Moody's Investors Service, Inc.; and (vi)
investments in money market funds registered under the Investment Company Act
of 1940, as amended, which have net assets of at least $200.0 million and at
least 85.0% of whose assets consist of securities and other obligations of the
types described in clauses (i) through (v) above.
"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" has the meaning specified in Section 2.1 hereof.
"Pledged Preferred Securities" has the meaning specified in Section 2.1
hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Preferred Securities" has the meaning specified in the Recitals.
"Proceeds" means all interest, dividends, cash, instruments, securities,
financial assets (as defined in Section 8-102(a)(9) of Revised Article 8) and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the Collateral.
"Purchase Contract" has the meaning specified in the Recitals.
"Purchase Contract Agent" has the meaning specified in the first paragraph
of this instrument.
"Purchase Contract Agreement" has the meaning specified in the Recitals.
"Revised Article 8" means the 1994 Official Text of Revised Article 8 of
the Uniform Commercial Code, together with conforming and miscellaneous
amendments to Articles 1, 3, 4, 5, 9 and 10, 1994 Official Text, as adopted
5
<PAGE> 10
by the American Law Institute and the National Conference of Commissioners on
Uniform State Laws and approved by the American Bar Association on February 14,
1995.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the preamble to
this Agreement.
"Security Entitlement" has the meaning set forth in Section 8.102(a)(7) of
Revised Article 8.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.
"TRADES Regulations" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations
are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance with
the instructions of the Collateral Agent, the Purchase Contract Agent or the
Holder, as applicable:
(i) in the case of Collateral consisting of securities which
cannot be delivered by book-entry or which the parties agree
are to be delivered in physical form, delivery in
appropriate physical form to the recipient accompanied by
any duly executed instruments of transfer, assignments in
blank, transfer tax stamps and any other documents necessary
to constitute a legally valid transfer to the recipient;
(ii) in the case of Collateral consisting of securities
maintained in book-entry form by (A) causing such securities
to be credited to a book-entry securities account of the
recipient or an Intermediary and (B) causing such
6
<PAGE> 11
Intermediary, if any, (i) to send to the recipient
confirmation of the transfer of the relevant interest in such
Collateral to the recipient and (ii) to identify by
book-entry or otherwise such Collateral as subject to the
relevant interest in favor of the recipient or such other
method as may be effective under applicable law; and
(iii) in the case of Treasury Securities in book-entry form, by
causing a "securities intermediary" (as defined in Section
8-102(a)(14) of Revised Article 8) to (i) credit a
"securities entitlement" (as defined in Section 8-102(a)(17)
of Revised Article 8) with respect to such securities to a
securities account maintained by or on behalf of the
recipient; (ii) to issue a confirmation to the Collateral
Agent with respect to such credit and (iii) to make
appropriate notations in its books to reflect the security
interest of the Collateral Agent in such Treasury
Securities.
"Treasury Security" means a zero-coupon U.S. Treasury Security
maturing on May 15, 2000 (Cusip Number 912820 AW7) which are the principal
strips of the 8.875% U.S. Treasury Securities which mature on May 15, 2000.
"Trust" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means, as
to (i) a Preferred Security, the Stated Amount, (ii) Cash, the face amount
thereof and (iii) Treasury Securities, the aggregate principal amount thereof
at maturity.
Section 2. Pledge; Control and Perfection.
Section 2.1. The Pledge. The Holders from time to time acting through
the Purchase Contract Agent, as their attorney-in-fact, hereby pledge and grant
to the Collateral Agent, for the benefit of the Company, as collateral security
for the performance when due by such Holders of their respective obligations
under the related Purchase Contracts, a security interest in (i) all of the
right, title and interest of such Holders (a) in the Preferred
7
<PAGE> 12
Securities constituting a part of the securities and all Proceeds thereof
(including any Proceeds from the repayment of the Preferred Securities by the
Trust) and any Treasury Securities delivered in exchange for such Preferred
Securities in accordance with Section 4 hereof, in each case that have been
Transferred to or received by the Collateral Agent and not released by the
Collateral Agent to such Holders under the provisions of this Agreement (the
"Collateral"); (b) in payments made by Holders pursuant to Section 4.4; (c) in
the Collateral Account and all securities, financial assets and other property
credited thereto and all security entitlements related thereto; and (d) in any
Junior Subordinated Debentures delivered to the Collateral Agent upon the
occurrence of a Tax Event or an Investment Company Event or a liquidation of
the Trust as provided in Section 6.3. Prior to or concurrently with the
execution and delivery of this Agreement, the Purchase Contract Agent, on
behalf of the initial Holders of the Income PRIDES, shall cause the Preferred
Securities comprising a part of the Income PRIDES to be delivered to the
Collateral Agent for the benefit of the Company by physically delivering such
securities to the Securities Intermediary endorsed in blank and causing the
Securities Intermediary to credit the Collateral Account with such securities
and send the Collateral Agent a confirmation of the deposit of such securities.
In the event a Holder of Income PRIDES so elects, such Holder may Transfer
Treasury Securities to the Collateral Agent for the benefit of the Company in
exchange for the release by the Collateral Agent on behalf of the Company of
Preferred Securities to the Purchase Contract Agent on behalf of such Holder.
Treasury Securities shall be Transferred to the Collateral Account maintained
by the Collateral Agent at the Securities Intermediary by book-entry transfer
to the Collateral Account in accordance with the TRADES Regulations and by the
notation by the Securities Intermediary on its books that a Security
Entitlement with respect to such Treasury Securities has been credited to the
Collateral Account. For purposes of perfecting the Pledge under applicable
law, including, to the extent applicable, the TRADES Regulations, the Uniform
Commercial Code as adopted and in effect in any applicable jurisdiction or
Revised Article 8 as made applicable by the TRADES Regulations, the Collateral
Agent shall be the agent of the Company as provided herein. The pledge
provided in this Section 2.1 is herein referred to as the "Pledge" and the
Preferred
8
<PAGE> 13
Securities or Treasury Securities subject to the Pledge, excluding any
Preferred Securities or Treasury Securities released from the Pledge as
provided in Section 4 hereof, are hereinafter referred to as "Pledged Preferred
Securities" or the "Pledged Treasury Securities," respectively. Subject to the
Pledge and the provisions of Section 2.2 hereof, the Holders from time to time
shall have full beneficial ownership of the Collateral. Whenever directed by
the Collateral Agent acting on behalf of the Company, the Securities
Intermediary shall have the right to reregister the Preferred Securities or any
other securities held in physical form in its name.
Except as may be required in order to release Preferred Securities in
connection with a Holders election to convert its investment from an Income
Pride to a Growth Pride, or except as otherwise required to release securities
as specified herein, the Collateral Agent shall not relinquish physical
possession of any certificate evidencing a Preferred Security prior to the
termination of this Agreement. If it becomes necessary for the Collateral
Agent to relinquish physical possession of a certificate in order to release a
portion of the Preferred Securities evidenced thereby from the Pledge, the
Collateral Agent shall use its best efforts to obtain physical possession of a
replacement certificate evidencing any Preferred Securities remaining subject
to the Pledge hereunder registered to it or indorsed in blank within fifteen
days of the date it relinquished possession. The Collateral Agent shall
promptly notify the Company of its failure to obtain possession of any such
replacement certificate as required hereby.
Section 2.2. Control and Perfection. In connection with the Pledge
granted in Section 2.1, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, hereby authorize and direct the Securities Intermediary
(without the necessity of obtaining the further consent of the Purchase
Contract Agent or any of the Holders), to comply with and follow any
instructions and entitlement orders (as defined in Section 8-102(a)(8) of
Revised Article 8) that the Collateral Agent on behalf of the Company may give
in writing with respect to the Collateral Account, the Collateral credited
thereto and any security entitlements with respect to any thereof. Such
instructions and entitlement orders
9
<PAGE> 14
may, without limitation, direct the Securities Intermediary to transfer,
redeem, sell, liquidate, assign, deliver or otherwise dispose of the Preferred
Securities, the Treasury Securities and any security entitlements with respect
thereto and to pay and deliver any income, proceeds or other funds derived
therefrom to the Company. The Holders from time to time acting through the
Purchase Contract Agent hereby further authorize and direct the Collateral
Agent, as agent of the Company, to itself issue instructions and entitlement
orders, and to otherwise take action, with respect to the Collateral Account,
the Collateral credited thereto and any security entitlements with respect to
any thereof, pursuant to the terms and provisions hereof, all without the
necessity of obtaining the further consent of the Purchase Contract Agent or
any of the Holders. In addition, to further protect and perfect the Pledge,
the Securities Intermediary agrees that it will, until New York adopts Revised
Article 8, at all times mark its books with respect to the Collateral Account
to show that all securities credited thereto are subject to the Pledge in favor
of the Collateral Agent for the benefit of the Company. The Collateral Agent
shall be the Agent of the Company and shall act as directed in writing by the
Company. Without limiting the generality of the foregoing, the Collateral
Agent shall issue entitlement orders to the Securities Intermediary when and as
directed by the Company.
Section 3. Distributions on Pledged Collateral. So long as the
Purchase Contract Agent is the registered owner of the Pledged Preferred
Securities it shall receive all payments thereon. If the Pledged Preferred
Securities are reregistered such that the Collateral Agent becomes the
registered holder, all payments of the Stated Amount of, or cash distributions
on, any Pledged Preferred Securities and all payments of the principal of, or
cash distributions on, any Pledged Treasury Securities received by the
Collateral Agent and that are properly payable hereunder shall be paid by the
Collateral Agent by wire transfer in same day funds:
(i) In the case of (A) cash distributions with respect
to Pledged Preferred Securities and (B) any payments of the Stated
Amount with respect to any Preferred Securities that have been
released from the Pledge pursuant to Section 4.3 hereof, to the
Purchase Contract Agent, for the benefit of the
10
<PAGE> 15
relevant Holders of Securities, to the account designated by the
Purchase Contract Agent for such purpose, no later than 2:00 p.m., New
York City time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment is received
by the Collateral Agent on a day that is not a Business Day or after
12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the
next succeeding Business Day);
(ii) In the case of any principal payments with respect to
any Treasury Securities that have been released from the Pledge
pursuant to Section 4.3 hereof, to the Holders of the Growth PRIDES to
the accounts designated by them in writing for such purpose no later
than 2:00 p.m., New York City time, on the Business Day such payment
is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a
Business Day or after 12:30 p.m., New York City time, on a Business
Day, then such payment shall be made no later than 10:30 a.m., New
York City time, on the next succeeding Business Day); and
(iii) In the case of payments of the Stated Amount of any
Pledged Preferred Securities or the principal of any Pledged Treasury
Securities, to the Company on the relevant Payment Date in accordance
with the procedure set forth in Section 6.2(a) or 6.2(b) hereof, in
full satisfaction of the respective obligations of the Holders under
the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein shall
be applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount on account of
any Preferred Security that, at the time of such payment, is a Pledged
Preferred Security or a Holder of a Growth PRIDES shall receive any payments of
principal on account of any Treasury Securities that, at the time of such
payment, are Pledged Treasury Securities, the Purchase Contract Agent or such
Holder shall hold the same as trustee of an express trust
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for the benefit of the Company (and promptly deliver the same over to the
Company) for application to the obligations of the Holders under the related
Purchase Contracts, and the Holders shall acquire no right, title or interest
in any such payments of Stated Amount or principal so received.
Section 4. Substitution, Release, Repledge and Settlement of
Preferred Securities.
Section 4.1. Substitution of Preferred Securities and the
Establishment of Growth PRIDES. At any time on or prior to the second Business
Day immediately preceding the Purchase Contract Settlement Date, a Holder of
Income PRIDES shall have the right to substitute Treasury Securities for the
Pledged Preferred Securities securing such Holder's obligations under the
Purchase Contract(s) comprising a part of its Income PRIDES in integral
multiples of 20 Income PRIDES by (a) Transferring to the Collateral Agent
Treasury Securities having a Value equal to the Stated Amount of the Pledged
Preferred Securities to be released and (b) delivering the related Income
PRIDES to the Purchase Contract Agent, accompanied by a notice, substantially
in the form of Exhibit B hereto, to the Purchase Contract Agent stating that
such Holder has Transferred Treasury Securities to the Collateral Agent
pursuant to clause (a) above (stating the Value of the Treasury Securities
Transferred by such Holder) and requesting that the Purchase Contract Agent
instruct the Collateral Agent to release from the Pledge the Pledged Preferred
Securities related to such Income PRIDES. The Purchase Contract Agent shall
instruct the Collateral Agent in the form provided in Exhibit A. Upon receipt
of Treasury Securities from a Holder of Income PRIDES and the related
instruction from the Purchase Contract Agent, the Collateral Agent shall
release the Preferred Securities and shall promptly Transfer such Preferred
Securities, free and clear of any lien, pledge or security interest created
hereby, to the Purchase Contract Agent.
Section 4.2. Pledge of Preferred Securities and Re-establishment of
Income PRIDES. At any time on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, a Holder of Growth PRIDES
shall have the right to establish or reestablish Income PRIDES consisting of
the Purchase Contracts and Preferred Securities in integral multiples of 20
Income PRIDES by
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(a) Transferring to the Collateral Agent Preferred Securities having a Value
equal to the Stated Amount of the Pledged Treasury Securities to be released
and (b) delivering the related Growth PRIDES to the Purchase Contract Agent,
accompanied by a notice, substantially in the form of Exhibit B hereto, to the
Purchase Contract Agent stating that such Holder has Transferred Preferred
Securities to the Collateral Agent pursuant to clause (a) above and requesting
that the Purchase Contract Agent instruct the Collateral Agent to release from
the Pledge the Pledged Treasury Securities related to such Growth PRIDES. The
Purchase Contract Agent shall instruct the Collateral Agent in the form
provided in Exhibit A. Upon receipt of the Preferred Securities from such
Holder and the instruction from the Purchase Contract Agent, the Collateral
Agent shall release the Treasury Securities and shall promptly Transfer such
Treasury Securities, free and clear of any lien, pledge or security interest
created hereby, to the Purchase Contract Agent.
Section 4.3. Termination Event. Upon receipt by the Collateral Agent
of written notice from the Company or the Purchase Contract Agent that there
has occurred a Termination Event, the Collateral Agent shall release all
Collateral from the Pledge and shall promptly Transfer any Pledged Preferred
Securities and Pledged Treasury Securities to the Purchase Contract Agent for
the benefit of the Holders of the Income PRIDES and the Growth PRIDES,
respectively, free and clear of any lien, pledge or security interest created
hereby.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Preferred Securities or of the Pledged Treasury Securities, as the case may be,
as provided by this Section 4.3, the Purchase Contract Agent shall (i) use its
best efforts to obtain an opinion of a nationally recognized law firm
reasonably acceptable to the Collateral Agent to the effect that, as a result
of the Company's being the debtor in such a bankruptcy case, the Collateral
Agent will not be prohibited from releasing or Transferring the Collateral as
provided in this Section 4.3, and shall deliver such opinion to the Collateral
Agent within ten days after the occurrence of such Termination Event, and if
(y) the Purchase Contract Agent
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shall be unable to obtain such opinion within ten days after the occurrence of
such Termination Event or (z) the Collateral Agent shall continue, after
delivery of such opinion, to refuse to effectuate the release and Transfer of
all Pledged Preferred Securities or of the Pledged Treasury Securities, as the
case may be, as provided in this Section 4.3, then the Purchase Contract Agent
shall within fifteen days after the occurrence of such Termination Event
commence an action or proceeding in the court with jurisdiction of the
Company's case under the Bankruptcy Code seeking an order requiring the
Collateral Agent to effectuate the release and transfer of all Pledged
Preferred Securities or of the Pledged Treasury Securities, as the case may be,
as provided by this Section 4.3 or (ii) commence an action or proceeding like
that described in subsection (i)(z) hereof within ten days after the occurrence
of such Termination Event.
Section 4.4. Cash Settlement. Upon receipt by the Collateral Agent of
(a) notice from the Purchase Contract Agent prior to the Purchase Contract
Settlement Date, as provided in the Purchase Contract Agreement, that a Holder
elects to effect a Cash Settlement with respect to some or all of such Holder's
Purchase Contracts in accordance with the terms of the Purchase Contracts and
the Purchase Contract Agreement and (b) payment by such Holder prior to 9:00
a.m., New York City time, on the Business Day immediately preceding the
Purchase Contract Settlement Date, of the Purchase Price of such Purchase
Contracts by certified check payable to or upon the order of the Company, or
wire transfer in immediately available funds, then the Collateral Agent shall,
upon the written direction of the Purchase Contract Agent, promptly invest any
Cash received from a Holder in connection with a Cash Settlement in Permitted
Investments that will mature on the Purchase Contract Settlement Date. Upon
the receipt of any such funds, the Collateral Agent shall pay such funds to the
Company on the Purchase Contract Settlement Date and the Collateral Agent
shall, after payment of the Purchase Price to the Company on the Purchase
Contract Settlement Date, release from the Pledge and promptly Transfer to the
Purchase Contract Agent Pledged Preferred Securities or Pledged Treasury
Securities with a principal amount equal to the product of the Stated Amount
and the number of Purchase Contracts as to which such Holder has elected to
effect a Cash Settlement. The Collateral Agent shall distribute, when
received, any funds in re-
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spect of the interest earned from any such investment to the Purchase Contract
Agent, for payment to the relevant Holders.
Section 4.5. Early Settlement. Upon written notice to the Collateral
Agent by the Purchase Contract Agent that one or more Holders of Securities
have elected to effect Early Settlement of their respective obligations under
the Purchase Contracts forming a part of such Securities in accordance with the
terms of the Purchase Contracts and the Purchase Contract Agreement (setting
forth the number of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Preferred Securities in the case of a
holder of Income PRIDES or (b) Pledged Treasury Securities in the case of a
holder of Growth PRIDES, as the case may be, with a principal amount equal to
the product of (i) the Stated Amount times (ii) the number of such Purchase
Contracts as to which such Holders have elected to effect Early Settlement and
shall Transfer all such Pledged Preferred Securities or Pledged Treasury
Securities, as the case may be, free and clear of the Pledge created hereby, to
the Purchase Contract Agent for the benefit of the Holders.
Section 4.6. Application of Proceeds Settlement. (a) In the event a
Holder of Income PRIDES has not made an effective Cash Settlement or an Early
Settlement of the Purchase Contract(s), underlying its Income PRIDES, such
Holder shall be deemed to have elected to pay for the shares of Common Stock to
be issued under such Purchase Contract(s) from the Proceeds of the related
Pledged Preferred Securities. The Collateral Agent shall, by 10:00 a.m., New
York City time, on the Business Day immediately preceding the Purchase Contract
Settlement Date, without any instruction from such Holder of Income PRIDES,
present the related Preferred Securities to the Institutional Trustee for
repayment at the Repayment Price. The Collateral Agent shall, at the written
direction of the Purchase Contract Agent, promptly invest
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<PAGE> 20
any Cash received in respect of the repayment of the Pledged Preferred
Securities in overnight Permitted Investments. On the Purchase Contract
Settlement Date, the Collateral Agent shall apply the proceeds of any such
funds to pay to the Company an amount equal to the product of the Stated Amount
and the number of Preferred Securities repaid by the Institutional Trustee at
the Purchase Price. The Collateral Agent shall distribute any funds received
in respect of the investment earnings from such investment when received to the
Purchase Contract Agent for payment to the relevant Holders.
(b) In the event a holder of Growth PRIDES has not made an Early Settlement of
the Purchase Contract(s) underlying its Growth PRIDES, such holder shall be
deemed to have elected to pay for the shares of Common Stock to be issued under
such Purchase Contract(s) from the Proceeds of the related Pledged Treasury
Securities. On the Business Day immediately prior to the Purchase Contract
Settlement Date, the Collateral Agent shall, at the written direction of the
Purchase Contract Agent, invest the Cash proceeds of the maturing Pledged
Treasury Securities in overnight Permitted Investments. Without receiving any
instruction from the Holder of Growth PRIDES, the Collateral Agent shall apply
the Proceeds of the related Pledged Treasury Securities to the settlement of
such Purchase Contracts on the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities and the investment earnings from the investment in overnight
Permitted Investments is in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent shall distribute
such excess, when received, to the Purchase Contract Agent for the benefit of
the holder of the related Purchase Contracts.
Section 5. Voting Rights -- Preferred Securities. The Purchase
Contract Agent may exercise, or refrain from exercising, any and all voting and
other consensual rights pertaining to the Pledged Preferred Securities or any
part thereof for any purpose not inconsistent with the terms of this Agreement
and in accordance with the terms of the Purchase Contract Agreement; provided,
that the Purchase Contract Agent shall not exercise or, as the case may be,
shall not refrain from exercising such right
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<PAGE> 21
if, in the judgment of the Company, such action would impair or otherwise have
a material adverse effect on the value of all or any of the Pledged Preferred
Securities; and provided, further, that the Purchase Contract Agent shall give
the Company and the Collateral Agent at least five days' prior written notice
of the manner in which it intends to exercise, or its reasons for refraining
from exercising, any such right. Upon receipt of any notices and other
communications in respect of any Pledged Preferred Securities, including notice
of any meeting at which holders of Preferred Securities are entitled to vote or
solicitation of consents, waivers or proxies of holders of Preferred
Securities, the Collateral Agent shall use reasonable efforts to send promptly
to the Purchase Contract Agent such notice or communication, and as soon as
reasonably practicable after receipt or a written request therefor from the
Purchase Contract Agent, execute and deliver to the Purchase Contract Agent
such proxies and other instruments in respect of such Pledged Preferred
Securities (in form and substance satisfactory to the Collateral Agent) as are
prepared by the Purchase Contract Agent with respect to the Pledged Preferred
Securities.
Section 6. Rights and Remedies; Investment Company Event; Tax Event
etc.
Section 6.1. Rights and Remedies of the Collateral Agent. (a) The
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code as in effect in
the State of New York (the "Code") (whether or not the Code is in effect in the
jurisdiction where the rights and remedies are asserted), Revised Article 8 and
the TRADES Regulations and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction where
any rights and remedies hereunder may be asserted.
(b) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, in the event the Collateral Agent is
unable to make payments to the Company on account of principal payments of any
Pledged Treasury Securities as provided in Section 3 hereof in satisfaction of
the obligations of the Holder of the Securities of which such Pledged Treasury
Securities is a part under the related Purchase Contracts, the
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Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities and such obligations of such Holder, any and all of the
rights and remedies available to a secured party under the Code, Revised
Article 8 and the TRADES Regulations after default by a debtor, and as
otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, the Collateral Agent is hereby
irrevocably authorized to receive and collect all payments of (i) the Stated
Amount of, or cash distributions on, the Pledged Preferred Securities, or (ii)
the principal of the Pledged Treasury Securities, subject, in each case, to the
provisions of Section 3, and as otherwise granted herein.
(d) The Purchase Contract Agent and each Holder of Securities, in
the event such Holder becomes the holder of a Growth PRIDES, agrees that, from
time to time, upon the written request of the Collateral Agent, the Purchase
Contract Agent or such Holder shall execute and deliver such further documents
and do such other acts and things as the Collateral Agent may reasonably
request in order to maintain the Pledge, and the perfection and priority
thereof, and to confirm the rights of the Collateral Agent hereunder. The
Purchase Contract Agent shall have no liability to any Holder for executing any
documents or taking any such acts requested by the Collateral Agent hereunder,
except for liability for its own negligent act, its own negligent failure to
act or its own willful misconduct.
Section 6.2. Tax Event, Investment Company Event, etc. Upon the
occurrence of a Tax Event or an Investment Company Event or a liquidation of
the Trust, a principal amount of the Junior Subordinated Debentures
constituting the assets of the Trust and underlying the Preferred Securities
equal to the aggregated Stated Amount of the Pledged Preferred Securities shall
be delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. In the event the Collateral Agent receives such Junior
Subordinated Debentures in respect of Pledged Preferred Securities upon the
occurrence of a Tax Event, Investment Company Event or liquidation of the
Trust, the Collateral Agent shall Transfer the Junior Subordinated Debentures
to the Collateral Account in the manner speci-
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fied herein for Pledged Preferred Securities to secure the obligations of the
Holders of Income PRIDES to purchase the Company's Common Stock under the
related Purchase Contracts. Thereafter, the Collateral Agent shall have such
security interests, rights and obligations with respect to the Junior
Subordinated Debentures as it had in respect of the Pledged Preferred
Securities as provided in Articles II, III, IV, V and VI hereof.
Section 7. Representation and Warranties; Covenants.
Section 7.1. Representations and Warranties. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security
interest in and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the
Collateral and, in the case of Collateral delivered
in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or
has the right to Transfer, the Collateral it
Transfers to the Collateral Agent, free and clear of
any security interest, lien, encumbrance, calls,
liabilities to pay money or other restrictions other
than the security interest and lien granted under
Section 2 hereof;
(c) upon the Transfer of the Collateral to the
Collateral Account, the Collateral Agent, for the
benefit of the Company, will have a valid and
perfected first priority security interest therein
(assuming that any central clearing operation or any
Intermediary or other entity not within the control
of the Holder in-
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volved in the Transfer of the Collateral, including
the Collateral Agent, gives the notices and takes
the action required of it hereunder and under
applicable law for perfection of that interest and
assuming the establishment and exercise of control
pursuant to Section 2.2 hereof); and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result in
the creation of any security interest, lien or other
encumbrance on the Collateral other than the
security interest and lien granted under Section 2
hereof or violate any provision of any existing law
or regulation applicable to it or of any mortgage,
charge, pledge, indenture, contract or undertaking
to which it is a party or which is binding on it or
any of its assets.
Section 7.2. Covenants. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long
as the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders
will create or purport to create or allow to subsist
any mortgage, charge, lien, pledge or any other
security interest whatsoever over the Collateral or
any part of it other than pursuant to this
Agreement; and
(b) neither the Purchase Contract Agent nor such Holders
will sell or otherwise dispose (or attempt to
dispose) of the Collateral or any part of it except
for the beneficial interest therein, subject to the
pledge hereunder, transferred in connection with the
Transfer of the Securities.
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Section 8. The Collateral Agent. It is hereby agreed as follows:
Section 8.1. Appointment, Powers and Immunities. The Collateral Agent
shall act as agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this 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 for any
recitals contained in this Agreement, or in any certificate or other document
referred to or provided for in, or received by it under, this Agreement, the
Securities or the Purchase Contract Agreement, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
(other than as against the Collateral Agent), the Securities or the Purchase
Contract Agreement or any other document referred to or provided for herein or
therein or for any failure by the Company or any other Person (except the
Collateral Agent) to perform any of its obligations hereunder or thereunder or
for the perfection, priority or, except as expressly required hereby,
maintenance of any security interest created hereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder (except pursuant to directions furnished under Section 8.2 hereof,
subject to Section 8.6 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 or willful misconduct; 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 securities or other
property deposited hereunder. Subject to the foregoing, during the term of
this Agreement, the Collateral Agent shall take all reasonable action in
connection with the safekeeping and preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or
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<PAGE> 26
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 Collateral. Notwithstanding the foregoing, the
Collateral Agent and Securities Intermediary in its individual capacity hereby
waive any right of setoff, bankers lien, liens or perfection rights as
securities intermediary or any counterclaim with respect to any of the
Collateral.
Section 8.2. Instructions of the Company. The Company 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 the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral Agent,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement and (ii) the Collateral
Agent shall be adequately indemnified as provided herein. Nothing in this
Section 8.2 shall impair the right of the Collateral Agent in its discretion to
take any action or omit to take any action which it deems proper and which is
not inconsistent with such direction.
Section 8.3. Reliance by Collateral Agent. Each of the Securities
Intermediary and 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 or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent
and the Securities Intermediary. As to any matters not expressly provided for
by this Agreement, the Collateral Agent and the Securities Intermediary shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions given by the Company in accordance
with this Agreement.
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Section 8.4. Rights in Other Capacities. The Collateral Agent and the
Securities Intermediary and their affiliates may (without having to account
therefor to the Company) accept deposits from, lend money to, make their
investments in and generally engage in any kind of banking, trust or other
business with the Purchase Contract Agent and any Holder of Securities (and any
of their respective subsidiaries or affiliates) 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 Purchase Contract Agent and any Holder of
Securities without having to account for the same to the Company; provided that
each of the Securities Intermediary and the Collateral Agent covenants and
agrees with the Company that it shall not accept, receive or permit there to be
created in favor of itself and shall take no affirmative action to permit there
to be created in favor of any other person, any security interest, lien or
other encumbrance of any kind in or upon the Collateral.
Section 8.5. Non-Reliance on Collateral Agent. Neither the Securities
Intermediary nor the Collateral Agent shall be required to keep itself informed
as to the performance or observance by the Purchase Contract Agent or any
Holder of Securities of this Agreement, the Purchase Contract Agreement, the
Securities or any other document referred to or provided for herein or therein
or to inspect the properties or books of the Purchase Contract Agent or any
Holder of Securities. The Collateral Agent shall not have any duty or
responsibility to provide the Company or the Securities Intermediary with any
credit or other information concerning the affairs, financial condition or
business of the Purchase Contract Agent or any Holder of Securities (or any of
their respective affiliates) that may come into the possession of the
Collateral Agent or the Securities Intermediary or any of their respective
affiliates.
Section 8.6. Compensation and Indemnity. The Company agrees: (i) to
pay the Collateral Agent from time to time such compensation as shall be agreed
in writing between the Company and the Collateral Agent for all services
rendered by it hereunder and (ii) to indemnify the Collateral Agent and the
Securities Intermediary for, and to hold each of them harmless from and
against, any loss, liability or expense incurred without negligence, willful
misconduct or bad faith on its part, arising out of or in
23
<PAGE> 28
connection with the acceptance or administration of its powers and duties under
this Agreement, including the costs and expenses (including reasonable fees and
expenses of counsel) of defending itself against any claim or liability in
connection with the exercise or performance of such powers and duties.
Section 8.7. Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto and/or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent shall be entitled, after
prompt notice to the Company and the Purchase Contract Agent, 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 parties hereto 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 (i) 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 (ii) 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.
Section 8.8. Resignation of Collateral Agent. Subject to the
appointment and acceptance of a successor Collateral Agent as provided below,
(a) the Collateral Agent may resign at any time by giving notice thereof to the
Company and the Purchase Contract Agent as attorney-in-fact for the Holders of
Securities, (b) the Collateral
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Agent may be removed at any time by the Company 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 written notice of
such failure by the Purchase Contract Agent and such failure shall be
continuing, the Collateral Agent may be removed by the Purchase Contract Agent.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Collateral Agent pursuant to clause (c) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall have the
right to appoint a successor Collateral Agent. If no successor Collateral
Agent shall have been so appointed and shall have accepted such appointment
within 30 days after the retiring Collateral Agent's giving of notice of
resignation or 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 Collateral) to such successor Collateral Agent. The retiring
Collateral Agent shall, upon such succession, be discharged from its duties and
obligations as Collateral Agent hereunder. After any retiring Collateral
Agent's resignation hereunder as Collateral Agent, the provisions of this
Section 8 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Collateral Agent.
Section 8.9. Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of
its duties hereunder, and the Collateral Agent shall not be liable for any
action taken or omitted by, or in reliance upon the advice of, such agents or
advisors selected in good faith. The appointment of agents pursuant to this
Section 8.9 shall be subject to prior consent of the Company, which consent
shall not be unreasonably withheld.
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<PAGE> 30
Section 8.10. Survival. The provisions of this Section 8 shall
survive termination of this Agreement and the resignation or removal of the
Collateral Agent.
Section 8.11. Indemnity. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Collateral Agent or the Securities
Intermediary or their officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Collateral Agent or the
Securities Intermediary, or any of them, incurred without any act or deed that
is found to be attributable to gross negligence on the part of the Collateral
Agent or the Securities Intermediary.
Section 9. Amendment.
Section 9.1. Amendment Without Consent of Holders. Without the
consent of any Holders, the Company, the Collateral Agent and the Purchase
Contract Agent, at any time and from time to time, may amend this Agreement, in
form satisfactory to the Company, the Collateral Agent and the Purchase
Contract Agent, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company; 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 so long as such covenants or such surrender do not
adversely affect the validity, perfection or priority of the security
interests granted or created hereunder; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or
Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such
provisions herein, or to
26
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make any other provisions with respect to such matters or questions
arising under this Agreement, provided such action shall not adversely
affect the interests of the Holders.
Section 9.2. Amendment with Consent of Holders. With the consent of
the Holders of not less than 66-2/3% of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
authorized by a Board Resolution, the Purchase Contract Agent and the
Collateral Agent may amend this Agreement for the purpose of modifying in any
manner the provisions of this Agreement or the rights of the Holders in respect
of the Securities; provided, however, that no such supplemental agreement
shall, without the consent of the Holder of each Outstanding Security affected
thereby,
(1) change the amount or type of Collateral underlying a
Security (except for the rights of holders of Income PRIDES to
substitute the Treasury Securities for the Trust Preferred Securities
or the rights of holders of Growth PRIDES to substitute Trust
Preferred Securities for the Treasury Securities), impair the right of
the Holder of any Security to receive distributions on the underlying
Collateral or otherwise adversely affect the Holder's rights in or to
such Collateral; or
(2) otherwise effect any action that would require the consent
of the Holder of each Outstanding Security affected thereby pursuant
to the Purchase Contract Agreement if such action were effected by an
agreement supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment; or
(4) materially and adversely alter the rights of the holders
of Preferred Securities;
provided, that if any amendment or proposed referred to above would
adversely affect only the Income PRIDES or the Growth PRIDES, then only the
affected class of holder will be entitled to vote on such amendment or proposed
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and such amendment or proposal shall not be effective except with the consent
of 66-2/3% of such class. It shall not be necessary for any Act of Holders
under this Section to approve the particular form of any proposed amendment,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 9.3. Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent and the Purchase Contract Agent
shall be entitled to receive and (subject to Section 6.1 hereof, with respect
to the Collateral Agent, and Section 7.1 of the Purchase Contract Agreement,
with respect to the Purchase Contract Agent) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such amendment have been
satisfied.
Section 9.4. Effect of Amendments. Upon the execution of any
amendment under this Section, this Agreement shall be modified in accordance
therewith, and such amendment shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered under the
Purchase Contract Agreement shall be bound thereby.
Section 9.5. Reference to Amendments. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Section may, and shall if required
by the Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement in exchange for Outstanding
Security Certificates.
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<PAGE> 33
Section 10. Miscellaneous.
Section 10.1. 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.
Section 10.2. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without
limiting the foregoing, the above choice of law is expressly agreed to by the
Securities Intermediary, the Collateral Agent and the Holders from time to time
acting through the Agent, as their attorney-in-fact, in connection with the
establishment and maintenance of the Collateral Account. The Company, the
Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, hereby submit to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
Section 10.3. 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
29
<PAGE> 34
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have
been duly given when transmitted by telecopier or personally delivered or, in
the case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
Section 10.4. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Company, the Collateral Agent and the Purchase Contract Agent, and the
Holders from time to time of the Securities, by their acceptance of the same,
shall be deemed to have agreed to be bound by the provisions hereof and to have
ratified the agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.
Section 10.5. 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 10.6. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provision in any other
jurisdiction.
Section 10.7. Expenses, etc. The Company agrees to reimburse the
Collateral Agent for: (a) all reasonable out-of-pocket costs and expenses of
the Collateral Agent (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
30
<PAGE> 35
with (i) any enforcement or proceedings resulting or incurred in connection
with causing any Holder of Securities to satisfy its obligations under the
Purchase Contracts forming a part of the Securities and (ii) the enforcement of
this Section 10.7; 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.
Section 10.8. Security Interest Absolute. All rights of the
Collateral Agent and security interests hereunder, and all obligations of the
Holders from time to time hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any provision of
the Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
any other term of, or any increase in the amount of, all or any of the
obligations of Holders of Securities under the related Purchase
Contracts, or any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the Purchase
Contract Agreement or any Purchase Contract or any other agreement or
instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
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<PAGE> 36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
MCN CORPORATION
By: /s/ Sebastian Coppola
----------------------------
Name: Sebastian Coppola
Title: Senior Vice President
and Treasurer
Address for Notices:
MCN Energy Group Inc.
500 Griswold Street
Detroit, Michigan 48226
Attention: Treasurer
Telecopy: (313) 256-5871
The First National Bank of
Chicago as Purchase Contract
Agent and as attorney-in-fact
of the Holders from time to
time of the Securities
By: /s/ R.D. Manella
-----------------------------
Name: R.D. Manella
Title: Vice President
Address for Notices:
The First National Bank of
Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust
Services Division
Telecopy: (312) 407-1708
32
<PAGE> 37
The Chase Manhattan Bank
as Collateral Agent and as
Securities Intermediary
By: /s/ L. O'Brien
-----------------------------
Name: L. O'Brien
Title: Senior Trust Officer
Address for Notices:
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Corporate Trust
Administration
Department
Telecopy: (212) 946-8159
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<PAGE> 38
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Corporate Trust
Administration Department
Re: FELINE PRIDES of MCN Corporation, doing business as
MCN Energy Group Inc. (the "Company"), and MCN Financing III
We hereby notify you in accordance with Section 4.1 of the
Pledge Agreement, dated as of March 25, 1997, (the "Pledge Agreement") among
the Company, yourselves, as Collateral Agent, and ourselves, as Purchase
Contract Agent and as attorney-in-fact for the holders of [Income PRIDES]
[Growth PRIDES] from time to time, that the holder of securities listed below
(the "Holder") has elected to substitute [$_____ aggregate principal amount of
Treasury Securities] [$_______Stated Amount of Preferred Securities] in
exchange for an equal value of [Pledged Preferred Securities] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Preferred Securities] to you, as Collateral Agent. We hereby
instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged
Preferred Securities], to release the Preferred Securities] [Treasury
Securities] related to such [Income PRIDES] [Growth PRIDES] to us in accordance
with the Holder's instructions. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date: THE FIRST NATIONAL BANK OF CHICAGO
----------------
By:
-----------------------------
Name:
Title:
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities] for the [Pledged Preferred
Securities] [Pledged Treasury Securities]:
- ------------------------------- ------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
- -------------------------------
Address
- -------------------------------
- -------------------------------
A-1
<PAGE> 39
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
One First National Plaza
Suite 6363
Chicago, IL 60670
Attention: Corporate Trust
Administration Department
Re: FELINE PRIDES of MCN Corporation, doing business as
MCN Energy Group Inc. (the "Company"), and MCN Financing III
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent, $_______ aggregate
principal amount of [Treasury Securities] [Preferred Securities] in exchange
for an equal value of [Pledged Preferred Securities] [Pledged Treasury
Securities] held by the Collateral Agent (the "Pledge Agreement"), in
accordance with Section 4.1 of the Pledge Agreement, dated March 25, 1997,
between you, the Company and the Collateral Agent. The undersigned Holder
hereby instructs you to instruct the Collateral Agent to release to you on
behalf of the undersigned Holder the [Pledged Preferred Securities] [Pledged
Treasury Securities] related to such [Income PRIDES] [Growth PRIDES].
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Dated:
---------------------- ----------------------------------
Signature
Please print name and address of Registered Holder:
- ----------------------------- -----------------------------------
Name Social Security or other
Taxpayer Identification Number, if
any
- -----------------------------
Address
- -----------------------------
- -----------------------------
B-1
