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): December 12,
1994
FORD HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-18263 38-2890269
(Commission File Number) (IRS Employer Identification No.)
The American Road, Dearborn, Michigan 48121
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 313-322-3000
<PAGE>
Item 5. Other Events.
Pursuant to Registration Statement No. 33-56747, Ford
Holdings, Inc., a Delaware corporation (the "Company"),
registered under the Securities Act of 1933, as amended (the
"Act"), 5,000 shares of preferred stock and related depositary
shares. The preferred stock and depositary shares were
registered on Form S-3 to be offered on a delayed or continuous
basis pursuant to Rule 415 under the Act. In connection
therewith, the Company has created three series of preferred
stock designated as its Flexible Rate Auction Preferred Stock -
Series L ("Series L Preferred"), Flexible Rate Auction Preferred
Stock - Series M ("Series M Preferred") and Flexible Rate Auction
Preferred Stock - Series N ("Series N Preferred" and, together
with Series L Preferred and Series M Preferred, the "Preferred
Stock"), by the adoption on December 20, 1994 by a committee of
the Board of Directors of the Company of the Certificate of
Designations of the Preferred Stock (the "Certificate of
Designations") and the filing thereof with the Delaware Secretary
of State on December 21, 1994. The Certificate of Designations
is filed as an exhibit to this Report.
The Company entered into an underwriting agreement and a
pricing agreement each dated December 12, 1994 with Bear, Stearns
& Co. Inc., Goldman, Sachs & Co. and Lehman Brothers Inc. for the
sale of 2,150 shares of the Preferred Stock, consisting of 750
shares of Series L Preferred, 750 shares of Series M Preferred
and 650 shares of Series N Preferred. In connection therewith,
the Company entered into an Auction Agent Agreement with The Bank
of New York dated December 22, 1994 (the "Auction Agent
Agreement"), appointing The Bank of New York as the auction agent
of the Company to implement auction procedures in respect of the
Preferred Stock. It also provides for the issuance by the
Company of one certificate with respect to each series of
Preferred Stock. The Auction Agent Agreement and the form of the
stock certificate for the Preferred Stock are filed as exhibits
to this Report.
Pursuant to the Auction Agent Agreement, The Bank of New
York, as Auction Agent, has entered and may in the future enter
into Broker-Dealer Agreements with assorted broker-dealers (each
a "Broker-Dealer Agreement"). The form of the Broker-Dealer
Agreement is filed as an exhibit to this Report.
The Company also entered into a Term Selection Agent
Agreement dated December 22, 1994 with Bear, Stearns & Co. Inc.,
Goldman, Sachs & Co. and Lehman Brothers Inc. (the "Term
Selection Agent Agreement") whereby Bear, Stearns & Co. Inc.,
Goldman, Sachs & Co. and Lehman Brothers Inc. were appointed as
term selection agents of the Company for the purpose of
establishing dividend periods in respect of the Preferred Stock.
The Term Selection Agent Agreement is filed as an exhibit to this
Report.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
<TABLE>
<CAPTION>
EXHIBITS
Designation Description Method of Filing
<S> <C> <C>
Exhibit 4.1 Certificate of Designations of the Included as
Flexible Rate Auction Preferred part of Exhibit
Stock of Ford Holdings, Inc. 4.3 of this Report
Exhibit 4.2 Form of Stock Certificate for Filed with this
the Flexible Rate Auction Preferred Report
Stock of Ford Holdings, Inc.
Exhibit 4.3 Auction Agent Agreement dated December, Filed with this
22, 1994 between Ford Holdings, Inc. Report
and The Bank of New York
Exhibit 4.4 Form of Broker-Dealer Agreement Included as part
between The Bank of New York and of Exibit 4.3 of
broker-dealers this Report
Exhibit 4.5 Term Selection Agent Agreement Filed with this
dated December 22, 1994 Report
among Ford Holdings, Bear, Stearns
& Co. Inc., Goldman, Sachs & Co.
and Lehman Brothers Inc.
</TABLE>
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 thereunto duly authorized on the
date indicated.
FORD HOLDINGS, INC.
Date: January 3, 1995 By: /s/ P. J. Sherry, Jr.
-------------------------
P. J. Sherry, Jr.
Assistant Secretary
<PAGE>
EXHIBIT INDEX
Designation Description Page
Exhibit 4.1 Certificate of Designations of the
Flexible Rate Auction Preferred
Stock of Ford Holdings, Inc.
Exhibit 4.2 Form of Stock Certificate for the
Flexible Rate Auction Preferred
Stock of Ford Holdings, Inc.
Exhibit 4.3 Auction Agent Agreement dated December,
22, 1994 between Ford Holdings, Inc.
and The Bank of New York
Exhibit 4.4 Form of Broker-Dealer Agreement
between The Bank of New York and
broker-dealers
Exhibit 4.5 Term Selection Agent Agreement
dated December 22, 1994
among Ford Holdings, Bear, Stearns
& Co. Inc., Goldman, Sachs & Co.
and Lehman Brothers Inc.
j:\holdings\flexaps\form8-k
EXHIBIT 4.2
[Form of Face of Preferred Stock Certificate]
THIS IS A GLOBAL CERTIFICATE REPRESENTING ALL OF THE SHARES OF THIS
SERIES, AND THE BENEFICIAL OWNERS OF THE SHARES ARE NOT ENTITLED TO
RECEIVE ANY CERTIFICATE REPRESENTING SHARES BENEFICIALLY OWNED BY
THEM.
01
- ---------- ---------
Number Shares
INCORPORATED UNDER THE LAWS SEE REVERSE FOR CERTAIN
OF THE STATE OF DELAWARE DEFINITIONS
FORD HOLDINGS, INC.
CUSIP:
Flexible Rate Auction Preferred
Stock--Series [L][M][N] (Liquidation Preference
$100,000 Per Share)
This certifies that
CEDE & CO.
is the owner of ***
Fully Paid and Non-Assessable Shares of Flexible Rate Auction
Preferred Stock--Series [L][M][N]
of Ford Holdings, Inc. (the "Company") transferable on the books of
the Company only by the registered holder hereof, in person or by
a duly authorized attorney, upon surrender of this Certificate
properly endorsed. This certificate and the shares represented
hereby are issued and shall be held subject to all of the
provisions of the Company's Certificate of Incorporation, as
amended, and to the provisions of certain Resolutions of the Board
of Directors of the Company, copies of which are set forth in
Certificates of Designations, filed in the office of the Secretary
of the State of Delaware with respect to each class of Preferred
Stock of the Company, to all of which the holder by acceptance
hereof assents. Copies of such certificates are also on file with
the Company.
WITNESS the signatures of the
duly authorized officers of the
Company.
COUNTERSIGNED:
By: THE BANK OF NEW YORK ASSISTANT SECRETARY VICE PRESIDENT
AUCTION AGENT, TRANSFER - TREASURER
AGENT AND REGISTRAR
AUTHORIZED OFFICER DATED: December 22, 1994
<PAGE>
[Form of Reverse of Preferred Stock Certificate]
FORD HOLDINGS, INC.
The following abbreviations, when used in the inscription of the face
of this certificate, 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
------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts to Minors
JT TEN - as joint tenants with right
of survivorship and not as
tenants in common Act _________________
(State)
Additional abbreviations may also be used though not in the above list
-----------------------
The Company will furnish without charge to each stockholder who so requests,
the powers, designations, preferences and relative, participating, optional
or other special rights of each class of stock or series thereof of the
Company and the qualifications, limitations or restrictions of such
preferences and/or rights. Such request may be made to the Company or to
the Auction Agent.
For Value Received,_____________________ hereby sell, assign and
transfer unto
PLEASE INSSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________
________________________________________________________________________
________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
________________________________________________________________________
____________________________Shares of the capital stock represented by the
within Certificate, and do hereby irrevocably constitute and appoint
______________________Attorney to transfer the said stock on the books of
the within named corporation with full power of substitution in the
premises.
Dated:_______________
____________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the certificate in every particular, without
alteration or enlargement, or any change whatever.
EXHIBIT 4.3
AUCTION AGENT AGREEMENT, dated as of December 22, 1994,
between FORD HOLDINGS, INC., a Delaware corporation (the
"Company"), and THE BANK OF NEW YORK, a New York banking
corporation (the "Auction Agent").
The Company proposes to issue 2,150 shares of its Flexible
Rate Auction Preferred Stock in Series L, M and N (collectively,
the "Auction Preferred") pursuant to the Certificate of
Designations creating and establishing the Auction Preferred and
amending its Certificate of Incorporation. The Company desires
that the Auction Agent perform certain duties in connection with
each series of the Auction Preferred upon the terms and
conditions of this Agreement and hereby appoints the Auction
Agent to act in the capacities set forth in this Agreement.
NOW THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the Company and the Auction
Agent agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Terms Defined by Reference to Certificate of
Designations. Capitalized terms not defined herein shall have
the respective meanings specified in the Certificate of
Designations.
Section 1.2. Terms Defined Herein. As used herein and in
the Settlement Procedures, the following terms shall have the
following meanings, unless the context otherwise requires:
"Affiliate" shall mean any Person controlled by, in control
of, or under common control with the Company.
"Agent Member" of any Person shall mean a member of, or
participant in, the Securities Depository that will act on behalf
of such Person and is identified as such in such Person's
Purchaser's Letter.
"Auction" shall have the meaning specified in Section 2.1
hereof.
"Auction Preferred" shall have the meaning set forth in the
preamble to this Agreement.
"Auction Procedures" shall mean the Auction Procedures that
are set forth in paragraph 8 of the Certificate of Designations.
"Authorized Officer" shall mean each Senior Vice President,
Vice President, Assistant Vice President and Assistant Treasurer
of the Auction Agent assigned to its Corporate Trust Department
and every other officer or employee of the Auction Agent
designated as an "Authorized Officer" for purposes of this
Agreement in a communication to the Company.
"Broker-Dealer Agreement" shall mean each agreement between
the Auction Agent and a Broker-Dealer substantially in the form
attached hereto as Exhibit A.
"Certificate of Designations" shall mean the Certificate of
Designations creating and establishing the Auction Preferred and
amending the Certificate of Incorporation of the Company as filed
by the Company in the office of the Secretary of State of the
State of Delaware on December 21, 1994, a copy of which is
attached hereto as Exhibit B.
"Company Officer" shall mean the Chairman of the Board of
Directors, the President, each Vice President (whether or not
designated by a number or word or words added before or after the
title "Vice President"), the Secretary, the Treasurer, each
Assistant Secretary and each Assistant Treasurer of the Company
and every other officer or employee of the Company designated as
a "Company Officer" for purposes hereof in a notice to the
Auction Agent.
"Date of Original Issue" means the date on which the Company
originally issues shares of Auction Preferred.
"Holder" shall mean the holder of shares of Auction
Preferred, as his name appears on the Stock Books of the Company.
"Order" shall have the meaning assigned to such term in
paragraph 8(b)(i) of the Certificate of Designations and, for the
purposes hereof, shall be substantially in the form attached as
Exhibit D to the Broker-Dealer Agreement.
"Permitted Investments" shall mean Ford Motor Credit Company
Commercial paper or The Bank of New York Deposit Reserve.
"Purchaser's Letter" shall mean a purchaser's letter
substantially in the form attached hereto as Exhibit C.
"Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit D.
Section 1.3. Rules of Construction. Unless the context or
use indicates another or different meaning or intent, the
following rules shall apply to the construction of this
Agreement:
(a) Words importing the singular number shall include the
plural number and vice versa.
(b) The captions and headings herein are solely for
convenience of reference and shall not constitute a part of this
Agreement nor shall they affect the meaning, construction or
effect of any provision of this Agreement.
(c) The words "hereof," "herein," "hereto" and other words
of similar import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall
be to New York City time.
ARTICLE II
THE AUCTION
Section 2.1. Purpose; Incorporation by Reference of Auction
Procedures and Settlement Procedures. (a) The Certificate of
Designations provides that the Applicable Rate on the shares of
each series of the Auction Preferred for each Dividend Period for
such series after the initial Dividend Period therefor shall,
except under certain circumstances, be the rate per annum that a
bank or trust company appointed by the Company advises results
from the implementation of the Auction Procedures. The Board of
Directors of the Company has adopted a resolution appointing the
Auction Agent to implement the Auction Procedures and to act as
paying agent. The Auction Agent accepts such appointment and
agrees to follow the procedures set forth in this Article II and
the Auction Procedures for the purpose of determining the
Applicable Rate for each series of the Auction Preferred. Each
periodic operation of such procedures is hereinafter referred to
as an "Auction."
(b) All of the provisions contained in the Auction
Procedures and the Settlement Procedures are incorporated herein
by reference in their entirety and shall be deemed to be a part
hereof to the same extent as if such provisions were fully set
forth herein. In the event of any inconsistency between the
provisions hereof and the provisions of the Certificate of
Designations, the provisions of the Certificate of Designations
shall control.
Section 2.2. Preparation for Each Auction; Maintenance of
Registry of Beneficial Owners. (a) Not later than the Date of
Original Issue, the Company shall provide the Auction Agent with
a list of the Broker-Dealers and a manually signed copy of each
Broker-Dealer Agreement. The Auction Agent shall keep such list
current and accurate and shall indicate thereon, or on a separate
list, the identity of each Existing Holder, if any, whose most
recent Order was submitted by a Broker-Dealer on such list and
resulted in such Existing Holder continuing to hold or purchasing
shares of Auction Preferred. Not later than seven days prior to
any Auction Date for any series of Auction Preferred for which
any change in such list of Broker-Dealers is to be effective, the
Company shall notify the Auction Agent in writing of such change
and, if any such change is the addition of a Broker-Dealer to
such list, shall cause to be delivered to the Auction Agent for
execution by the Auction Agent, a Broker-Dealer Agreement
manually signed by such Broker-Dealer. The Auction Agent shall
have entered into a Broker-Dealer Agreement with a Broker-Dealer
prior to the participation of such Broker-Dealer in any Auction.
(b) In the event that the Auction Date for any Auction for
the Auction Preferred shall be changed after the Auction Agent
has given the notice pursuant to clause (vii) of paragraph (a) of
the Settlement Procedures for the Auction Preferred, or after the
Term Selection Agent has delivered a Notice of Long-Term Dividend
Period (as defined in Section 2.5(a) hereof), the Auction Agent,
by such means as the Auction Agent deems practicable, shall give
notice of such change to the Broker-Dealers no later than the
earlier of 9:15 a.m on the new Auction Date and 9:15 a.m. on the
old Auction Date.
(c) If the number of days comprising a Short-Term Dividend
Period is increased as provided in paragraph 3(b)(v) of the
Certificate of Designations as a result of a change in the
Minimum Holding Period, not later than 21 days prior to the first
day of the Dividend Period preceding the first Dividend Period
for any series of the Auction Preferred for which such change is
to be effective, the Company shall provide the Auction Agent with
a form of notice of such change to be sent to Existing Holders by
Broker-Dealers pursuant to Section 2.4(c) of the Broker-Dealer
Agreements. The Auction Agent shall promptly provide each
Broker-Dealer with such form of notice after receipt thereof from
the Company.
(d) (i) On each Auction Date (A) for any series of Auction
Preferred with respect to which the Dividend Period following
such Auction Date will be a Short-Term Dividend Period, the
Auction Agent shall determine the 60-day "AA" Composite
Commercial Paper Rate, and (B) for any series of Auction
Preferred with respect to which the Dividend Period following
such Auction Date will be a Long-Term Dividend Period, the
Auction Agent shall determine the Reference Rate and, in each
case, the Maximum Applicable Rate. If the 60-day "AA" Composite
Commercial Paper Rate or the Reference Rate is not quoted on an
interest basis but is quoted on a discount basis, the Auction
Agent shall convert the quoted rate to the interest equivalent
thereof as set forth in the respective definition in the case of
the 60-day "AA" Composite Commercial Paper Rate, the Applicable
"AA" Composite Commercial Paper Rate or the Applicable Treasury
Rate as set forth in the Certificate of Designations. If the
rate obtained by the Auction Agent is quoted on another basis,
the Auction Agent shall convert such quoted rate to its interest
equivalent after consultation with the Company as to the method
of such conversion. On the date of this Agreement, the
Applicable Percentage to be used for purposes of calculating the
Maximum Applicable Rate is 200%. If there is any change in the
credit rating of the Auction Preferred resulting in a change in
the Applicable Percentage, the Company shall notify the Auction
Agent in writing of such change in such credit rating and
Applicable Percentage prior to 12:00 noon on the Business Day
prior to the next Auction Date for any series of Auction
Preferred. In determining the Maximum Applicable Rate for any
series of Auction Preferred on any Auction Date, the Auction
Agent may rely on the last Applicable Percentage of which it has
received notice from the Company (or, in the absence of such
notice, the percentage set forth in the second preceding
sentence). Not later than 9:30 a.m. on each Auction Date the
Auction Agent shall notify the Company and the Broker-Dealers of
the 60-day "AA" Composite Commercial Paper Rate or the Reference
Rate, as the case may be, and the Maximum Applicable Rate.
(ii) If the 60-day "AA" Composite Commercial Paper Rate or
the Applicable "AA" Composite Commercial Paper Rate is to be
based on rates supplied by the Commercial Paper Dealers, and one
or more of the Commercial Paper Dealers shall fail to provide a
quotation or quotations for the determination of the 60-day "AA"
Composite Commercial Paper Rate or the Applicable "AA" Composite
Commercial Paper Rate, the Auction Agent shall immediately notify
the Company so that the Company can determine whether to select a
Substitute Commercial Paper Dealer or Substitute Commercial Paper
Dealers to provide the quotation or quotations not being supplied
by such Commercial Paper Dealer or Commercial Paper Dealers. The
Company shall promptly advise the Auction Agent of any such
selection.
(iii) If the Applicable Treasury Rate is to be based on
rates supplied by U.S. Government Securities Dealers and one or
more of the U.S. Government Securities Dealers shall not provide
a quotation for the determination of such Applicable Treasury
Rate, the Auction Agent shall immediately notify the Company so
that the Company can determine whether to select a Substitute
U.S. Government Securities Dealer or Substitute U.S. Government
Securities Dealers to provide the quotation or quotations not
being supplied by any U.S. Government Securities Dealer or U.S.
Government Securities Dealers. The Company shall promptly advise
the Auction Agent of any such selection.
(iv) In the event a Failure to Deposit occurs prior to the
beginning of a Dividend Period, the Auction Agent shall determine
LIBOR for the first day of each Dividend Period for which the
Applicable Rate is 200% of LIBOR until Auctions are resumed and
in the event a Failure to Deposit occurs during a Long-Term
Dividend Period, the Auction Agent shall determine LIBOR for the
day on which such Failure to Deposit occurs.
(v) If one or more of the Reference Banks shall not provide
a quotation for the determination of LIBOR, the Auction Agent
shall immediately notify the Company so that the Company can
determine whether to select a Substitute Reference Bank or
Substitute Reference Banks to provide the quotation or quotations
not being supplied by any Reference Bank or Reference Banks. The
Company shall promptly advise the Auction Agent of any such
selection.
(e) (i) The Auction Agent shall maintain a registry of the
Existing Holders of the shares of each series of the Auction
Preferred, who shall constitute Existing Holders for purposes of
Auctions for such series and shall indicate therein the identity
of each Existing Holder, if any, on whose behalf each
Broker-Dealer submitted the most recent Order in any Auction that
resulted in such Existing Holder's continuing to hold or
purchasing shares of such series of the Auction Preferred of such
series. Each Broker-Dealer shall provide the Auction Agent (not
later than the Date of Original Issue) with a list of the initial
Existing Holders of the shares of each series of Auction
Preferred and the respective Broker-Dealer of each such Existing
Holder through which such Existing Holder purchased such shares
of Auction Preferred. The Auction Agent shall use reasonable
efforts to keep such registry current and accurate. The Auction
Agent may rely upon, as evidence of the identities of the
Existing Holders, such list, the results of Auctions and notices
from the Broker-Dealer of each such Existing Holder with respect
to such Existing Holder's transfer of shares of the Auction
Preferred to another Person. Except as permitted by this Section
and Sections 2.2(f), 2.8 and 4.6, the Auction Agent shall not
disclose this information to any other Person.
(ii) The Auction Agent shall be required to register a
transfer of shares of the Auction Preferred from an Existing
Holder to another Person only if such transfer is made to a
Person that has delivered or caused to be delivered a signed
Purchaser's Letter to the Auction Agent and if (A) such transfer
is pursuant to an Auction or (B) the Auction Agent has been
notified in writing (I) in a notice substantially in the form of
Exhibit E to the Broker-Dealer Agreements by such Existing Holder
or the Broker-Dealer or the Agent Member of such Existing Holder
of such transfer and (II) in a notice substantially in the form
of Exhibit F to the Broker-Dealer Agreements by the Broker-Dealer
of any Person that purchased or sold such shares of the Auction
Preferred in an Auction of the failure of such shares of the
Auction Preferred to be transferred as a result of such Auction.
The Auction Agent is not required to accept any such notice for
an Auction unless it is received by the Auction Agent by 3:00
p.m. on the Business Day preceding such Auction Date.
(f) The Auction Agent may request the Broker-Dealers, as
set forth in the Broker-Dealer Agreements, to provide the Auction
Agent with a list of their respective customers that such
Broker-Dealers believe are Existing Holders of shares of any
series of the Auction Preferred. The Auction Agent shall provide
the Company with a copy of such list, as it is maintained, upon
the request of the Company. The Auction Agent shall keep
confidential such registry of Existing Holders and shall not
disclose the identities of the Existing Holders to any Person
other than the Company and the Broker-Dealer that provided such
information.
(g) The Auction Agent is not required to accept the
Purchaser's Letter of any Potential Holder who wishes to submit a
Bid for the first time in an Auction or an amendment to the
Purchaser's Letter of any Potential Holder or Existing Holder who
wishes to amend its Purchaser's Letter intending that such
amendment is to take effect with respect to an Auction, unless
such Purchaser's Letter or such amendment is received by the
Auction Agent by 3:00 p.m. on the Business Day preceding the
related Auction Date.
Section 2.3. Auction Schedule. The Auction Agent shall
conduct Auctions for each series of the Auction Preferred in
accordance with the schedule set forth below. Such schedule may
be changed by the Auction Agent with the consent of the Company,
which consent shall not be unreasonably withheld. The Auction
Agent shall give written notice of any such change to each
Broker-Dealer. Such notice shall be given prior to the close of
business on the Business Day next preceding the first Auction
Date on which any such change shall be effective.
Time on Auction Date Event
By 9:30 a.m Auction Agent advises the Company and
Broker-Dealers of 60-Day "AA" Composite
Commercial Paper Rate or the Reference
Rate, as the case may be, and the
applicable Maximum Applicable Rate
determined pursuant to Section 2.2(d)(i)
hereof.
Between 9:30 a.m. and Auction Agent assembles
12:30 p.m. information communicated to it by
Broker-Dealers as provided in paragraph
8(c) of the Certificate of Designations.
Submission Deadline is 12:30 p.m.
Not earlier than Auction Agent makes determinations
12:30 p.m. pursuant to paragraph 8(d)(i) of the
Certificate of Designations.
By approximately
3:00 p.m. Auction Agent advises Company of results
of Auction (including the term of the
next succeeding Dividend Period) as
provided in paragraph 8(d)(ii) of the
Certificate of Designations.
Submitted Bids and Submitted Sell Orders
are accepted and rejected and shares of
the applicable series of the Auction
Preferred allocated as provided in
paragraph 8(e) of the Certificate of
Designations.
Auction Agent gives notice of Auction
results as set forth in Section 2.4
hereof.
Section 2.4. Notice of Auction Results and Exchanges. The
Auction Agent shall follow the notification procedures set forth
in paragraph (a) of the Settlement Procedures.
Section 2.5. Changes in Dividend Period. (a) Paragraph
3(b)(viii) of the Certificate of Designations provides that the
Term Selection Agent may, except as set forth in the proviso
below, at its option, on or prior to the tenth day but no more
than 20 days prior to an Auction Date for any series of Auction
Preferred, by telephonic and written notice (a "Notice of a
Long-Term Dividend Period") to the Company, the Auction Agent,
the Paying Agent and the Securities Depository, substantially in
the form of Exhibit E hereto, specify that the next succeeding
Dividend Period for such series of Auction Preferred as a
Long-Term Dividend Period, provided that the Term Selection Agent
may not give a Notice of Long-Term Dividend Period for such
series of Auction Preferred (and any such Notice shall be null
and void) unless Sufficient Clearing Bids were made in the last
occurring Auction for such series of Auction Preferred and full
cumulative dividends for all series of Auction Preferred payable
prior to such date have been paid in full.
(b) Paragraph 3(b)(viii) of the Certificate of Designations
provides that the Dividend Period following each Auction for any
series of Auction Preferred shall be a Short-Term Dividend Period
(i) if the Term Selection Agent does not give a Notice of
Long-Term Dividend Period with respect to the next succeeding
Dividend Period for any Series of Auction Preferred in a timely
manner, (ii) if, in the event the Term Selection Agent has given
a Notice of Long-Term Dividend Period with respect to the next
succeeding Dividend Period for any series of Auction Preferred,
the Term Selection Agent gives a Notice of Revocation, (iii) if,
in the event the Term Selection Agent has given a Notice of
Long-Term Dividend Period with respect to the next succeeding
Dividend Period for any series of Auction Preferred, the Company
removes the Term Selection Agent by giving a Notice of Removal or
(iv) Sufficient Clearing Bids are not made in the related Auction
for such series or such Auction is not held for any reason.
(c) Paragraph 8(d)(ii)(B) of the Certificate of
Designations provides that if Sufficient Clearing Bids are not
made at any Auction for any series of Auction Preferred with
respect to which the Term Selection Agent has given a Notice of
Long-Term Dividend Period (and such notice was not revoked or
deemed to be revoked), the Applicable Rate for the Dividend
Period following such Auction and for each subsequent Dividend
Period until the first Dividend Period following an Auction for
such series of Auction Preferred at which Sufficient Clearing
Bids are made shall be the greatest of (i) the Applicable Rate
for such series of Auction Preferred in effect immediately prior
to such Auction, (ii) the Maximum Applicable Rate for a
Short-Term Dividend Period or (iii) the Maximum Applicable Rate
on the Auction Date for the specified Long-Term Dividend Period.
(d) Paragraph 3(b)(viii) of the Certificate of Designations
provides that any Notice of Long-Term Dividend Period may be
revoked by the Term Selection Agent on or prior to the second
Business Day prior to the related Auction by telephonic and
written notice, substantially in the form of Exhibit F hereto (a
"Notice of Revocation"), to the Company, the Auction Agent, the
Paying Agent and the Securities Depository.
(e) Paragraph 3(b)(viii) of the Certificate of Designations
provides that any Notice of Long-Term Dividend Period shall be
deemed to be revoked if the Company shall remove the Term
Selection Agent by giving telephonic and written notice,
substantially in the form of Exhibit G hereto (a "Notice of
Removal") on or prior to the second Business Day prior to the
related Auction to the Auction Agent, the Paying Agent and the
Securities Depository.
(f) Promptly after receipt of a Notice of a Long-Term
Dividend Period, Notice of Revocation or Notice of Removal, the
Auction Agent shall promptly deliver a copy of such notice by
hand delivery or telecopier to each Existing Holder of shares of
such series at the address or telecopier number specified in such
Existing Holder's Purchaser's Letter and to the Broker-Dealers.
The Auction Agent shall also promptly use its best efforts to
advise each Broker-Dealer by telephone of the receipt of such
notice.
Section 2.6. Broker-Dealers. (a) Not later than 12:00
noon on the Auction Date for any series of the Auction Preferred,
the Company shall pay to the Auction Agent an amount in cash
equal to (i) if the next succeeding Dividend Period for such
series is a Short-Term Dividend Period the product of (A) a
fraction, the numerator of which is the number of days in such
Dividend Period (calculated by counting the first day of such
Dividend Period but excluding the last day thereof) and the
denominator of which is 360 times (B) 1/4 of 1% times
(C) $100,000 times (D) the aggregate number of shares of Auction
Preferred in such series or (ii) if the next succeeding Dividend
Period for such series is a Long-Term Dividend Period, the
product of (A) such percentage as agreed to from time to time by
the Company and the Term Selection Agent (the "Long-Term
Percentage") times (B) $100,000 times (C) the aggregate number of
shares of Auction Preferred in such series. The Company shall
notify the Auction Agent of the amount of the Long-Term
Percentage. The Auction Agent shall advise the Company of the
amount referred to in the first sentence of this Section 2.6(a)
in respect of such Dividend Period not later than 4:00 p.m. on
the second Business Day preceding the Auction Date with respect
to such Dividend Period. In the event that the Company does not
pay the Auction Agent the full amount determined pursuant to this
Section 2.6(a) by 12:00 noon on the Auction Date, the Auction
Agent shall immediately advise the Company of the amount of any
deficiency. Prior to the applications of funds deposited
pursuant to this Section 2.6(a), the Company may direct the
Auction Agent to invest such funds in the manner set forth in
Section 3.1. Until further directed to the contrary, the Company
hereby directs the Auction Agent to so invest such funds. The
Auction Agent shall apply such moneys as set forth in Section 2.5
of the Broker-Dealer Agreements. To the extent that any such
moneys are not payable to a Broker-Dealer because Sufficient
Clearing Bids were not made in the relevant Auction and shares of
such series of the Auction Preferred therefore continued to be
held despite being subject to a Submitted Sell Order, the Auction
Agent shall repay such moneys to the Company.
(b) The Auction Agent shall terminate any Broker-Dealer
Agreement as set forth therein if so directed by the Company in
writing.
(c) The Auction Agent shall from time to time enter into
such Broker-Dealer Agreements only as the Company shall request.
(d) The Auction Agent shall maintain a list of
Broker-Dealers.
Section 2.7. Ownership of Shares of the Auction Preferred
and Submission of Bids by Company and Affiliates. The Company
shall notify the Auction Agent if the Company or any Affiliate
acquires any shares of the Auction Preferred. Neither the
Company nor any Affiliate shall submit any Order in any Auction.
Any Broker-Dealer that is an Affiliate of the Company may submit
Orders in an Auction but only if such Orders are not for its own
account, except that if any such affiliated Broker-Dealer holds
shares of the Auction Preferred for its own account, it must
submit a Sell Order in the next Auction with respect to such
shares of the Auction Preferred. The Auction Agent shall have no
duty or liability with respect to the enforcement of this Section
2.7.
Section 2.8. Access to and Maintenance of Auction
Records. The Auction Agent shall upon written request afford to
the Company and its agents, independent public accountants and
legal counsel access at reasonable times during normal business
hours to all books, records, documents and other information
concerning the conduct and results of Auctions. For purposes of
the preceding sentence, the parties hereto acknowledge that
Broker-Dealers shall not be deemed agents of the Company. The
Auction Agent shall maintain records relating to any Auction for
a period of two years after such Auction (unless requested by the
Company to maintain such records for a longer period not in
excess of six years, then for such longer period), and such
records shall, in reasonable detail, accurately and fairly
reflect the actions taken by the Auction Agent in connection with
such Auction.
ARTICLE III
THE AUCTION AGENT AS PAYING AGENT
Section 3.1. Company To Provide Funds for Dividends. (a)
Not later than 12:00 noon on the Business Day immediately
preceding each Dividend Payment Date with respect to which
dividends on the shares of any series of the Auction Preferred
have been declared, the Company shall irrevocably deposit with
the Auction Agent sufficient funds (available on such Dividend
Payment Date in New York City) for the payment of such dividends
and shall give the Auction Agent irrevocable instructions to
apply such funds to the payment of such dividends on such
Dividend Payment Date. The Auction Agent shall advise the
Company of the amount referred to in the preceding sentence in
respect of such Dividend Payment Date not later than 4:00 p.m. on
the third Business Day preceding such Dividend Payment Date. In
the event that the Company so does not irrevocably deposit with
the Auction Agent sufficient funds (available on such Dividend
Payment Date in New York City) for the payment of such dividends,
the Auction Agent shall immediately advise the Company of the
amount of any deficiency.
(b) The Company may direct the Auction Agent in writing to
invest (payment only upon delivery of securities unless such
securities are in book entry form) any available funds only in
Permitted Investments, provided that the proceeds of any such
investment will be available in New York City at the opening of
business on the Dividend Payment Date. Until further directed to
the contrary, the Company hereby directs the Auction Agent to so
invest any available funds.
(c) The Auction Agent shall not be liable or responsible
for any delay in receiving the proceeds of, or any loss, in whole
or in part, incurred or resulting from, any investment made
pursuant to Section 3.1(b), such investments being solely for the
account of and at the risk of the Company.
(d) If pursuant to Section 3.1(b) the Company directs the
Auction Agent to invest in Permitted Investments and the Auction
Agent receives income on such investments, then the Auction Agent
shall (to the extent that such income is not required to pay
dividends), upon the request of the Company, transmit such income
to the Company.
(e) In the event a Failure to Deposit shall have occurred
and the Company shall have cured such Failure to Deposit in a
timely manner pursuant to paragraph 3(c)(i) of the Certificate of
Designations, the Auction Agent shall mail notice of such cure,
substantially in the form set forth in Exhibit H hereto, to each
Existing Holder of shares of Auction Preferred of such Series at
the address specified in such Existing Holder's Purchaser's
Letter and to each Broker-Dealer for such Series as promptly as
practicable after its receipt of such payment.
Section 3.2. Disbursing Dividends. The Auction Agent shall
pay to the Holders of the shares of each series of the Auction
Preferred on each Dividend Payment Date for such series,
dividends on the shares of such series of the Auction Preferred
after receipt of necessary funds from the Company with which to
make such payment. The amount of dividends for any Dividend
Period to be paid by the Auction Agent to the Holders shall be
determined as set forth in paragraph 3(c) of the Certificate of
Designations.
SECTION 3.3. Notices of Meetings of Holders of Auction
Preferred. (a) Upon written request of the Company, the Auction
Agent will mail to Holders of Auction Preferred notice of any
meeting of stockholders of the Company (such notices to be
provided by the Company) not less than 20 days nor more than 60
days prior to the date fixed for such meeting.
(b) Paragraph 5(c) of the Certificate of Designations
provides that during any period (referred to herein as a "Default
Period") when dividend payments on any series of Auction
Preferred or Parity Preferred for such number of Dividend Periods
or portions thereof (or the equivalent thereof in the case of
Parity Preferred), which in the aggregate contain at least 540
days, shall not have been paid or declared and a sum sufficient
for the payment thereof set aside for payment, then in any such
case the number of directors of the Company shall automatically
be increased by two additional directors, and the holders of the
shares of all series of Auction Preferred and Parity Preferred
shall possess full voting powers (to the exclusion of the holders
of all other series and classes of capital stock of the Company),
voting as a single class, to elect such two directors. If any of
such conditions exist, the Auction Agent shall, upon receipt from
the Company of a Notice of Special Meeting of Holders, in
substantially the form set forth in Exhibit I hereto with
insertions completed by the Company, mail such notice to all
Holders who were holders of record at the close of business on
the date the right referred to in paragraph 5(c)(i) of the
Certificate of Designations accrued. The delivery by the Company
of such a notice to the Auction Agent shall be deemed a
representation and warranty by the Company that at least one of
such conditions exists.
The Company shall provide a temporary chairman for any
Special Meeting and the Auction Agent shall have no obligations
in connection with such meeting, except with respect to the
mailing of the Notice of Special Meeting of Holders, pursuant to
this Agreement.
ARTICLE IV
THE AUCTION AGENT AS TRANSFER AGENT AND REGISTRAR
Section 4.1. Original Issue of Stock Certificates. On the
Date of Original Issue, the Company shall issue one certificate
with respect to each series of Auction Preferred, representing
all of the shares of such series of Auction Preferred, and each
such certificate, at the request of the Company, shall be
registered in the name of CEDE & Co. and countersigned by the
Auction Agent.
Section 4.2. Registration of Transfer or Exchange of
Shares. Except as otherwise provided in this Section 4.2, shares
of each series of the Auction Preferred shall be registered
solely in the name of the Securities Depository or its nominee.
If the Securities Depository shall give notice of its intention
to resign as such, and if the Company shall not have selected a
substitute Securities Depository acceptable to the Auction Agent
prior to such resignation, then upon such resignation, the shares
of the Auction Preferred of each series shall be registered for
transfer or exchange, and new certificates shall be issued by the
Auction Agent, upon written request of the Company (indicating
the names of the designated transferees), in the name or names of
the designated transferee or transferees, upon surrender of the
old certificates in form deemed by the Auction Agent properly
endorsed for transfer with all necessary endorsers' signatures
guaranteed, in such manner and form as the Auction Agent may
require, by a guarantor reasonably believed by the Auction Agent
to be responsible, accompanied by such assurances as the Auction
Agent shall deem necessary or appropriate to evidence the
genuineness and effectiveness of each necessary endorsement and
satisfactory evidence of compliance with all applicable laws
relating to the collection of taxes or funds necessary for the
payment of such taxes.
Section 4.3. Removal of Legends. All requests for removal
of legends on certificates representing shares of the Auction
Preferred indicating restrictions on transfer shall be
accompanied by an opinion of counsel stating that such legends
may be removed and the shares represented by such certificate may
be freely transferred. Such opinion shall be delivered under
cover of a letter from a Company Officer authorizing the Auction
Agent to remove the legend on the basis of said opinion.
Section 4.4. Lost Stock Certificates. Upon written request
of the Company, the Auction Agent shall countersign and register
replacement certificates for certificates represented to have
been lost, stolen or destroyed, upon the fulfillment of such
requirements as shall be deemed appropriate by the Company and
the Auction Agent, subject at all times to provisions of law, the
Certificate of Incorporation and By-Laws of the Company governing
such matters and resolutions adopted by the Board of Directors of
the Company with respect to such matters. The Auction Agent may
countersign new certificates in exchange for and upon the
cancellation of mutilated certificates. Any request by the
Company to the Auction Agent to countersign a replacement
certificate pursuant to this Section 4.4 shall be deemed to be a
representation and warranty by the Company to the Auction Agent
that such issuance will comply with such provisions of law, the
Certificate of Incorporation and By-Laws and resolutions of the
Board of Directors of the Company. The Company agrees to provide
such additional stock certificates as may be requested by the
Auction Agent.
Section 4.5. Disposition of Cancelled Certificates; Record
Retention. In accordance with applicable rules and regulations
of the Securities and Exchange Commission, the Auction Agent
shall retain stock certificates which have been cancelled in
transfer or in exchange and the accompanying documentation for
two calendar years. Upon the expiration of such two-year period,
the Auction Agent shall deliver to the Company such cancelled
certificates and the accompanying documentation. The Company
shall, at its expense, retain such records for a minimum
additional period of four calendar years from the date of
delivery of the records to the Company and shall make such
records available during this period at any time, or from time to
time, for reasonable periodic, special or other examinations by
representatives of the Securities and Exchange Commission. The
Company shall also undertake to furnish to the Securities and
Exchange Commission, upon demand, at either the principal office
or at any regional office, complete, correct and current hard
copies of any and all such records.
Section 4.6. Stock Books. The Auction Agent shall maintain
the Stock Books listing the Holders of the shares of each such
series of the Auction Preferred, the number of shares held by
each and the address of each. In case of any request or demand
for the inspection of the Stock Books of the Company or any other
books in the possession of the Auction Agent, the Auction Agent
shall notify the Company and secure instructions as to permitting
or refusing such inspection. The Auction Agent reserves the
right, however, to exhibit the Stock Books or other books to any
Person if it is advised by its counsel that its failure to do so
would be unlawful.
Section 4.7. Return of Funds. Any funds deposited with the
Auction Agent hereunder by the Company for any reason that remain
unpaid after six months shall be repaid to the Company.
<PAGE>
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Auction Agent
that:
(a) the Company has been duly incorporated and is existing
as a corporation in good standing under the laws of the State of
Delaware and has full power to execute and deliver this Agreement
and to authorize, create and issue the shares of each series of
the Auction Preferred, and the shares of each series of the
Auction Preferred have been duly authorized, validly issued and
are fully paid and nonassessable;
(b) this Agreement has been duly and validly authorized,
executed and delivered by the Company and, assuming due
authorization, execution and delivery by the Auction Agent,
constitutes a legal, valid, binding and enforceable obligation of
the Company, subject, as to enforceability, to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights
generally and to general equitable principles;
(c) the form of the certificate evidencing the shares of
each series of the Auction Preferred complies with all applicable
laws of the State of Delaware;
(d) no action by or before any governmental body or
authority of the United States or of any state thereof is
required in connection with the execution and delivery of this
Agreement or the issuance of the shares of each series of the
Auction Preferred, except as required by applicable state
securities laws;
(e) the execution and delivery of this Agreement, the
performance by the Company of its obligations hereunder and the
issuance and delivery of the shares of each series of the Auction
Preferred do not and will not conflict with, violate or result in
a breach of the terms, conditions or provisions of, or constitute
a default under, the Certificate of Incorporation or the Bylaws
of the Company, any law or regulation, any order or decree of any
court or public authority having jurisdiction or any mortgage,
indenture, contract, agreement or undertaking to which the
Company is a party or by which it is bound; and
(f) no taxes are payable upon or in respect of the
execution of this Agreement or the issuance of the shares of each
series of the Auction Preferred.
ARTICLE VI
THE AUCTION AGENT
Section 6.1. Duties and Responsibilities. (a) The Auction
Agent is acting solely as agent of the Company hereunder and owes
no fiduciary duty to any other Person by reason of this
Agreement.
(b) The Auction Agent undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement,
and no implied covenants or obligations shall be read into this
Agreement against the Auction Agent.
(c) The Auction Agent shall have no duty or responsibility
to verify or determine the accuracy of any document delivered to
it in accordance with the terms hereunder. The Auction Agent
shall have no duty or responsibility to enforce the obligations
of the Company to provide the Auction Agent with any notice or
document.
(d) In the absence of bad faith or negligence on its part,
the Auction Agent shall not be liable for any action taken,
suffered or omitted or for any error of judgment made by it in
the performance of its duties under this Agreement. The Auction
Agent shall not be liable for any error of judgment made in good
faith unless the Auction Agent shall have been negligent in
ascertaining the pertinent facts.
Section 6.2. Rights of the Auction Agent. (a) The Auction
Agent may rely and shall be protected in acting or refraining
from acting upon any communication authorized hereby and upon any
written instruction, notice, request, direction, consent, report,
certificate, share certificate or other instrument, paper or
document believed by it to be genuine. The Auction Agent shall
not be liable for acting upon any telephone communication
authorized hereby which the Auction Agent believes in good faith
to have been given by the Company or by a Broker-Dealer. The
Auction Agent may record by tape or otherwise telephone
communications with the Company or any of the Broker-Dealers or
both.
(b) The Auction Agent may consult with counsel, and the
advice of such 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.
(c) The Auction Agent shall not be required to advance,
expend or risk its own funds or otherwise incur or become exposed
to financial liability in the performance of its duties
hereunder.
(d) The Auction Agent may perform its duties and exercise
its rights hereunder either directly or by or through agents or
attorneys.
Section 6.3. Auction Agent's Disclaimer. The Auction Agent
makes no representation as to the correctness of the recitals in
or the validity or adequacy of this Agreement, the Broker-Dealer
Agreements or the shares of the Auction Preferred.
Section 6.4. Compensation, Expenses and Indemnification.
(a) The Company shall pay to the Auction Agent such compensation
in respect of its services hereunder as shall be agreed to from
time to time by the Company and the Auction Agent.
(b) The Company shall indemnify the Auction Agent against,
and hold it harmless from, any loss, liability or expense
(including reasonable counsel fees and expenses), incurred
without negligence or bad faith on its part, arising out of or in
connection with its agency hereunder or under the Broker-Dealer
Agreements, including the costs and expenses of defending itself
against any claim or liability in connection with its exercise or
performance of any of its duties hereunder and thereunder for
which it is entitled to indemnification hereunder or thereunder.
(c) Without limiting the generality of Section 6.4(b)
hereof, the Company shall indemnify the Auction Agent against,
and hold it harmless from, any loss, liability or expense
(including reasonable counsel fees and expenses), incurred
without negligence or bad faith on its part, arising out of or
resulting from (i) any decision by the Auction Agent to preclude
from participating in any Auction or from being a transferee any
person who has not delivered to the Auction Agent an executed
Purchaser's Letter as provided herein, even if the Auction Agent
has not precluded others who have not delivered executed
Purchaser's Letters to the Auction Agent from participating in an
Auction or being a transferee and (ii) any decision by the
Auction Agent to not accept an Order that does not specify the
Bidder, even if the Auction Agent has accepted other Orders not
specifying a Bidder.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Term of Agreement. (a) The term of this
Agreement shall continue indefinitely until this Agreement shall
be terminated as provided in this Section 7.1. The Auction Agent
may terminate this Agreement upon written notice to the Company
on the date specified in such notice, which may be no earlier
than the Business Day following the later of (a) six months from
the date of this Agreement and (b) 60 days following delivery of
such notice. If the Auction Agent should resign, the Company
will use its best efforts to enter into an agreement with a
successor Auction Agent containing substantially the same terms
and conditions as this Agreement. The Company may remove the
Auction Agent, provided that, prior to such removal, the Company
shall have entered into an agreement substantially in the form of
this Agreement with a successor Auction Agent.
(b) Except as otherwise provided in this paragraph (b), the
respective rights and duties of the Company and the Auction Agent
under this Agreement shall cease upon termination of this
Agreement. The Company's representations, warranties, covenants
and obligations to the Auction Agent under Article V and Section
6.4 hereof shall survive the termination hereof. Upon
termination of this Agreement, the Auction Agent shall resign as
Auction Agent under each of the Broker-Dealer Agreements and
shall, at the Company's request, promptly deliver to the Company
copies of all books and records maintained by it in connection
with its duties hereunder.
Section 7.2. Communications. Except for (i) communications
authorized to be made by telephone pursuant to this Agreement or
the Auction Procedures and (ii) communications in connection with
Auctions (other than those expressly required to be in writing),
all notices, requests and other communications to any party
hereunder shall be in writing (including telecopy or similar
writing) and shall be given to such person addressed to it, at
its address or telecopy number set forth below:
If to the Company: FORD HOLDINGS, INC.
The American Road
Dearborn, Michigan 48121
Attention: Manager--Financing
Department
Telecopy No.: (313) 845-4077
Telephone No.: (313) 322-1774
For the purposes of Sections 2.6 and 3
Attention: Cash Management Section,
Banking & External Relations Department
Telecopy No.: (313) 323-2340
Telephone No.: (313) 390-3322
If to the Auction
Agent: THE BANK OF NEW YORK
101 Barclay Street
7th Floor
New York, New York 10286
Attention: Auction Desk
Telecopy No.: (212) 815-3522
Telephone No.: (212) 815-3521
or to such other address or telecopy number as such party may
hereafter specify for such purpose by notice to the other party.
Each such notice, request or communication shall be effective
when delivered at the address specified herein. Communications
shall be given on behalf of the Company by a Company Officer and
on behalf of the Auction Agent by an Authorized Officer.
Section 7.3. Entire Agreement. This Agreement contains the
entire agreement between the parties relating to the subject
matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral,
written or inferred, between the parties relating to the subject
matter hereof except for agreements relating to the compensation
of the Auction Agent.
Section 7.4. Benefits. Nothing herein, express or implied,
shall give to any Person, other than the Company, the Auction
Agent and their respective successors and assigns, any benefit of
any legal or equitable right, remedy or claim hereunder.
Section 7.5. Amendment; Waiver. (a) This Agreement shall
not be deemed or construed to be modified, amended, rescinded,
cancelled or waived, in whole or in part, except by a written
instrument signed by the parties hereto. The Company shall
notify the Auction Agent of any change in the Certificate of
Designations and Certificate of Incorporation prior to the
effective date of any such change.
(b) Failure of either party hereto to exercise any right or
remedy hereunder in the event of a breach hereof by the other
party shall not constitute a waiver of any such right or remedy
with respect to any subsequent breach.
Section 7.6. Successors and Assigns. This Agreement shall
be binding upon, inure to the benefit of and be enforceable by
the respective successors and assigns of each of the Company and
the Auction Agent.
Section 7.7. Severability. If any clause, provision or
section hereof shall be ruled invalid or unenforceable by any
court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not
affect any of the remaining clauses, provisions or sections
hereof.
Section 7.8. Execution in Counterparts. This Agreement may
be executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same
instrument.
Section 7.9. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the date first above written.
FORD HOLDINGS, INC.
By /s/ M. S. Macdonald
--------------------
Name: M. S. Macdonald
Title: Vice President -
Treasurer
THE BANK OF NEW YORK
By /s/ Enrico Reyes
------------------------
Name: Enrico Reyes
Title: Assistant Vice President
EXHIBIT A
BROKER-DEALER AGREEMENT dated as of [ date ]
between THE BANK OF NEW YORK, a New York banking corporation (not
in its individual capacity but solely as agent of FORD HOLDINGS,
INC. (the "Company") pursuant to authority granted to it in the
Auction Agent Agreement (as hereinafter defined) together with
its successors and assigns, the "Auction Agent"), and [NAME OF
BROKER-DEALER] (together with its successors and assigns, "BD").
The Company has issued 750 shares of its Flexible Rate
Auction Preferred Stock--Series L, 750 shares of its Flexible
Rate Auction Preferred Stock--Series M and 650 shares of its
Flexible Rate Auction Preferred Stock--Series N (collectively,
the "Auction Preferred"), pursuant to the Certificate of
Designations creating and establishing the Auction Preferred and
amending its Certificate of Incorporation.
The Certificate of Designations provides that the dividend
rate on the shares of each series of the Auction Preferred for
each Dividend Period for such series after the initial Dividend
Period for such series shall be the Applicable Rate, which shall,
except under certain circumstances, be the rate per annum that a
bank or trust company appointed by the Company advises results
from implementation of the Auction Procedures with respect to
such series. The Company has duly appointed The Bank of New York
as the Auction Agent for purposes of implementing the Auction
Procedures and related matters for the Auction Preferred.
Pursuant to Section 2.2(a) of the Auction Agent Agreement, the
Company has requested and directed the Auction Agent to execute
and deliver this Agreement.
The Auction Procedures require the participation of one or
more Broker-Dealers.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the Auction Agent and BD agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Terms Defined by Reference to Certificate of
Designations. Capitalized terms not defined herein shall have
the respective meanings specified in the Certificate of
Designations.
Section 1.2. Terms Defined Herein. As used herein and in
the Settlement Procedures, the following terms shall have the
following meanings, unless the context otherwise requires:
"Act" shall mean the Securities Act of 1933, as amended.
"Auction" shall have the meaning specified in Section 2.1
hereof.
"Auction Agent Agreement" shall mean the Auction Agent
Agreement dated as of December 22, 1994 between the Company and
the Auction Agent relating to the Auction Preferred.
"Authorized Officer" shall mean each Senior Vice President,
Vice President, Assistant Vice President and Assistant Treasurer
of the Auction Agent assigned to its Corporate Trust Department
and every other officer or employee of the Auction Agent
designated as an "Authorized Officer" for purposes of this
Agreement in a communication to the Company.
"BD Officer" shall mean each officer or employee of BD
designated as a "BD Officer" for purposes of this Agreement in a
communication to the Auction Agent.
"Broker-Dealer Agreement" shall mean this Agreement and any
substantially similar agreement between the Auction Agent and a
Broker-Dealer.
"Certificate of Designations" shall mean the Certificate of
Designations creating and establishing the Auction Preferred and
amending the Certificate of Incorporation of the Company as filed
by the Company in the office of the Secretary of State of the
State of Delaware on December 21, 1994, a copy of which is
attached hereto as Exhibit A.
"Commission" shall mean the Securities and Exchange
Commission.
"Company" shall mean Ford Holdings, Inc., a Delaware
corporation, and its successors and assigns.
"Purchaser's Letter" shall mean a purchaser's letter
substantially in the form attached hereto as Exhibit B.
"Settlement Procedures" shall mean the Settlement
Procedures attached hereto as Exhibit C.
Section 1.3. Rules of Construction. Unless the context or
use indicates another or different meaning or intent, the
following rules shall apply to the construction of this
Agreement:
(a) Words importing the singular number shall include the
plural number and vice versa.
(b) The captions and headings herein are solely for
convenience of reference and shall not constitute a part of this
Agreement nor shall they affect the meaning, construction or
effect of any provision hereof.
(c) The words "hereof," "herein," "hereto" and other words
of similar import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall
be to New York City time.
ARTICLE II
THE AUCTION
Section 2.1. Purpose; Incorporation by Reference of Auction
Procedures and Settlement Procedures. (a) The provisions of the
Auction Procedures shall be followed by the Auction Agent for the
purpose of determining the Applicable Rate for each series of
Auction Preferred. Each periodic operation of such Auction
Procedures is hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction
Procedures and the Settlement Procedures are incorporated herein
by reference in their entirety and shall be deemed to be a part
of this Agreement to the same extent as if such provisions were
fully set forth herein.
(c) Unless BD has heretofore done so, BD is delivering
herewith a Purchaser's Letter executed by BD. BD agrees to act
as, to assume the obligations of and to be subject to the
limitations and restrictions placed upon a Broker-Dealer under
this Agreement. BD understands that other Persons meeting the
requirements specified in the definition of "Broker-Dealer"
contained in paragraph 8 of the Certificate of Designations may
execute Broker-Dealer Agreements and Purchaser's Letters and
participate as Broker-Dealers in Auctions. BD agrees to handle
customer orders in accordance with its respective duties under
applicable securities laws and rules.
(d) BD and other Broker-Dealers may participate in Auctions
for their own accounts, provided that BD or such other
Broker-Dealers, as the case may be, have executed and deposited
with the Auction Agent a Purchaser's Letter. However, the
Company may, by notice to BD and all other Broker-Dealers,
prohibit all Broker-Dealers from submitting Bids in Auctions for
their own account, but the Broker-Dealers may continue to submit
Hold and Sell Orders.
Section 2.2. Preparation for Each Auction. (a) Not later
than 9:30 a.m. on each Auction Date for the Auction Preferred,
the Auction Agent shall advise the Broker-Dealers by telephone of
(i) the 60-day "AA" Composite Commercial Paper Rate, if the
Dividend Period immediately following such Auction Date is a
Short-Term Dividend Period or (ii) the Reference Rate, if the
Dividend Period immediately following such Auction Date is a
Long-Term Dividend Period, and, in each case, the Maximum
Applicable Rate.
(b) In the event that the Auction Date for any Auction for
the Auction Preferred shall be changed after the Auction Agent
has given the notice referred to in clause (vii) of paragraph
(a) of the Settlement Procedures, or after BD receives the Notice
of Long-Term Dividend Period referred to in Section 2.4(d)
hereof, if applicable, the Auction Agent, by such means as the
Auction Agent deems practicable, shall give notice of such change
to BD not later than the earlier of 9:15 a.m. on the new Auction
Date or 9:15 a.m. on the old Auction Date. Thereafter, BD shall
promptly notify its customers whom BD believes are Existing
Holders of such change in Auction Date.
(c) The Auction Agent or the Company from time to time may
request the Broker-Dealers to provide the Auction Agent with a
list of their respective customers that such Broker-Dealers
believe are Existing Holders of shares of the Auction Preferred.
BD shall comply with any such request, and the Auction Agent
shall not disclose or authorize the disclosure of any such
information so provided to any Person except as provided and in
accordance with Sections 2.2(e), 2.2(f), 2.8 and 4.6 of the
Auction Agent Agreement.
(d) The Auction Agent is not required to accept the
Purchaser's Letter of any Potential Holder who wishes to submit a
Bid for the first time in an Auction or any amendment to a
Purchaser's Letter of any Potential Holder or Existing Holder who
wishes to amend its Purchaser's Letter intending that such
amendment is to take effect with respect to an Auction, unless
such Purchaser's Letter or such amendment received by the Auction
Agent by 3:00 p.m. on the Business Day preceding the related
Auction Date.
Section 2.3. Auction Schedule; Method of Submission of
Orders. (a) The Auction Agent shall conduct Auctions in
accordance with the schedule set forth below. Such schedule may
be changed by the Auction Agent with the consent of the Company,
which consent shall not be unreasonably withheld. The Auction
Agent shall give written notice of any such change to BD. Such
notice shall be given prior to the close of business on the
Business Day next preceding the first Auction Date on which any
such change shall be effective.
Time on
Auction Date Event
By 9:30 a.m. Auction Agent advises Company and
Broker-Dealers of 60-day "AA" Composite
Commercial Paper Rate or the Reference
Rate, as the case may be, and the
Maximum Applicable Rate as set forth in
Section 2.2(a) hereof.
Between 9:30 a.m. Auction Agent assembles information
and 12:30 p.m. communicated to it by Broker-Dealers as
provided in paragraph 8(c) of the
Certificate of Designations. Submission
Deadline is 12:30 p.m.
Not earlier than Auction Agent makes determinations
12:30 p.m. pursuant to paragraph 8(d)(i) of the
Certificate of Designations.
By approximately Auction Agent advises Company of results
3:00 p.m. of Auction (including the term of the
next succeeding Dividend Period) as
provided in paragraph 8(d)(ii) of the
Certificate of Designations.
Submitted Bids and Submitted Sell Orders
are accepted and rejected and shares of
the Auction Preferred allocated as
provided in paragraph 8(e) of the
Certificate of Designations.
Auction Agent gives notice of Auction
results as set forth in Section 2.4(a)
hereof.
(b) BD agrees to maintain a list of Potential Holders, to
contact the Potential Holders on such list on or prior to each
Auction Date for the purpose set forth in paragraph 8(b) of the
Certificate of Designations.
(c) BD agrees not to sell, assign or dispose of any shares
of the Auction Preferred to any Person who has not delivered or
caused to be delivered a signed Purchaser's Letter.
(d) BD shall submit Orders to the Auction Agent in writing
substantially in the form attached hereto as Exhibit D. BD shall
submit a separate Order to the Auction Agent for each Potential
Holder or Existing Holder on whose behalf BD is submitting an
Order and shall not net or aggregate the Orders of different
Potential Holders or Existing Holders on whose behalf BD is
submitting Orders.
(e) BD shall deliver to the Auction Agent (i) a written
notice, in substantially the form attached hereto as Exhibit E,
of transfers of shares of Auction Preferred made through BD by an
Existing Holder to another Person other than pursuant to an
Auction and shall deliver or cause to be delivered the related
Purchaser's Letter executed by such Person if such Person has not
previously so delivered a Purchaser's Letter and (ii) a written
notice substantially in the form attached hereto as Exhibit F, of
the failure of any shares of the Auction Preferred to be
transferred to or by any Person that purchased or sold shares of
the Auction Preferred through BD pursuant to an Auction. Any
notice delivered pursuant to the terms of the foregoing sentence
shall be effective for an Auction only if received by the Auction
Agent by 3:00 p.m. on the Business Day preceding the related
Auction Date.
(f) BD has delivered to the Auction Agent its executed
Purchaser's Letter. BD (if not an affiliate of the Company) may
submit Orders in Auctions for its own account, unless the Company
notifies all Broker-Dealers that they may no longer do so, in
which case Broker-Dealers may continue to submit for their own
accounts only Hold Orders and Sell Orders. Any Broker-Dealer
that is an affiliate of the Company may submit Orders in Auctions
but only if such Orders are not for its own account, except that
if any such affiliated Broker-Dealer holds shares of the Auction
Preferred for its own account, it must submit a Sell Order in the
next Auction with respect to such shares of the Auction
Preferred.
(g) BD agrees to handle its customers' Orders in accordance
with its duties under applicable securities laws and rules.
Section 2.4. Notices. (a) On each Auction Date, the
Auction Agent shall notify BD by telephone as provided in
paragraph (a) of the Settlement Procedures. By 11:30 a.m. on the
Business Day next succeeding such Auction Date, the Auction Agent
shall notify BD in writing of the disposition of all Orders
submitted by BD in the Auction held on such Auction Date.
(b) BD shall notify each Existing Holder or Potential
Holder on whose behalf BD has submitted an Order as provided in
paragraph (b) of the Settlement Procedures and take such other
action as is required of BD pursuant to the Settlement
Procedures.
(c) If the number of days comprising a Short-Term Dividend
Period is increased for any series of Auction Preferred with a
Short-Term Dividend Period as provided in paragraph 3(b)(v) of
the Certificate of Designations, the Auction Agent shall provide
BD with a form of notice of such change not later than five days
after the receipt of such form of notice by the Auction Agent
from the Company. BD shall mail a copy of such notice (at the
address specified in such Existing Holder's Purchaser's Letter)
to each Existing Holder which acquired through BD, and, to the
knowledge of BD, has not disposed of its shares of the Auction
Preferred, at least 10 days prior to both (i) the first day of
the Dividend Period preceding the Dividend Period for which such
change is to be effective and (ii) the first day of the first
Dividend Period for which such change is to be effective.
(d) If the Term Selection Agent delivers to the Auction
Agent a Notice of Long-Term Dividend Period in the form of
Exhibit E to the Auction Agent Agreement or delivers a Notice of
Revocation in the form of Exhibit F to the Auction Agent
Agreement or if the Company delivers a Notice of Removal in the
form of Exhibit G to the Auction Agent Agreement, the Auction
Agent shall notify each BD by telephone and thereafter deliver
such notice to BD as promptly as practicable after its receipt of
such notice from the Term Selection Agent or the Company, as the
case may be. Promptly after receipt of any such notice, BD shall
notify by telephone (at the telephone number specified in such
Existing Holder's Purchaser's Letter) each Existing Holder of
Auction Preferred which acquired shares of Auction Preferred
through BD and, to the knowledge of BD, has not disposed of its
shares of Auction Preferred and each Potential Holder which BD
contacted in connection with any Auction after receipt of such
notice of the contents of such notice.
(e) If the Company delivers to the Auction Agent a Notice
of Cure of Failure to Deposit in the Form of Exhibit H to the
Auction Agent Agreement, the Auction Agent shall notify each BD
by telephone and thereafter deliver such notice to BD as promptly
as practicable after its receipt of such notice from the Company.
Promptly after receipt of any such notice, BD shall notify by
telephone (at the telephone number specified in such Existing
Holder's Purchaser's Letter) each Existing Holder of Auction
Preferred which acquired shares of Auction Preferred through BD
and, to the knowledge of BD, has not disposed of its shares of
Auction Preferred after receipt of such notice of the contents of
such notice.
Section 2.5. Service Charge to Be Paid to BD. Not later
than 12:00 noon on the Business Day next succeeding each Auction
Date for any series of the Auction Preferred, the Auction Agent
shall pay to BD from moneys received from the Company an amount
in cash equal to the product of (i)(A) if the next succeeding
Dividend Period for such series is a Short-Term Dividend Period
the product of (x) a fraction, the numerator of which is the
number of days in such Dividend Period (calculated by counting
the first day of such Dividend Period but excluding the last day
thereof) and the denominator of which is 360, times (y) 1/4 of 1%
times (z) $100,000 or (B) if the next succeeding Dividend Period
for such series is a Long-Term Dividend Period, the product of
(x) such percentage as agreed to from time to time by the Company
and the Term Selection Agents times (y) $100,000 times (ii) the
sum of (A) the aggregate number of the shares of such series
placed by BD in such Auction that were (x) the subject of
Submitted Bids of Existing Holders submitted by BD and continued
to be held as a result of such submission and (y) the subject of
Submitted Bids of Potential Holders submitted by BD and were
purchased as a result of such submission, (B) the aggregate
number of shares of such series subject to valid Hold Orders
submitted to the Auction Agent by BD and (C) the number of shares
of such series that were covered by Hold Orders deemed to have
been submitted by Existing Holders pursuant to
paragraph 8(c)(iii) of the Certificate of Designations that were
acquired by such Existing Holders through BD. For purposes of
subclause (ii)(C) of the foregoing sentence, if any Existing
Holder who acquired shares of the Auction Preferred through BD
transfers those shares to another Person other than pursuant to
an Auction, then BD shall continue to be the Broker-Dealer for
the shares so transferred; provided, however, that, if the
transfer was effected by, or if the transferee is, a
Broker-Dealer other than BD, then such other Broker-Dealer shall
be the Broker-Dealer for such shares.
Section 2.6. Settlement. (a) If any Existing Holder on
whose behalf BD has submitted a Bid or Sell Order that was
accepted in whole or in part fails to instruct its Agent Member
to deliver shares of the Auction Preferred against payment
therefor, BD shall instruct such Agent Member to deliver to it
such shares against payment therefor and BD may deliver to the
Potential Holder on whose behalf BD submitted a Bid that was
accepted in whole or in part a number of shares of the Auction
Preferred that is less than the number of shares of the Auction
Preferred specified in such Bid to be purchased by such Potential
Holder. Notwithstanding the foregoing terms of this
Section 2.6(a), any delivery or nondelivery of shares of any
series of the Auction Preferred which represents any departure
from the results of an Auction, as determined by the Auction
Agent, shall be of no effect unless and until the Auction Agent
shall have been notified of such delivery or nondelivery in
accordance with Section 2.3(e) hereof. The Auction Agent shall
have no duty or liability with respect to enforcement of this
Section 2.6(a).
(b) Neither the Auction Agent nor the Company shall have
any responsibility or liability with respect to the failure of an
Existing Holder, a Potential Holder or its respective Agent
Member to deliver shares of the Auction Preferred or to pay for
shares of the Auction Preferred sold or purchased pursuant to the
Auction Procedures or otherwise.
ARTICLE III
THE AUCTION AGENT
Section 3.1. Duties and Responsibilities. (a) The Auction
Agent is acting solely as agent of the Company hereunder and owes
no fiduciary duties to any other Person by reason of this
Agreement.
(b) The Auction Agent undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement,
and no implied covenants or obligations shall be read into this
Agreement against the Auction Agent.
(c) In the absence of bad faith or negligence on its part,
the Auction Agent shall not be liable for any action taken,
suffered or omitted or for any error of judgment made by it in
the performance of its duties under this Agreement. The Auction
Agent shall not be liable for any error of judgment made in good
faith unless the Auction Agent shall have been negligent in
ascertaining the pertinent facts.
Section 3.2. Rights of the Auction Agent. (a) The Auction
Agent may rely on and shall be protected in acting or refraining
from acting upon any communication authorized by this Agreement
and upon any written instruction, notice, request, direction,
consent, report, certificate, share certificate or other
instrument, paper or document believed by it to be genuine. The
Auction Agent shall not be liable for acting upon any telephone
communication authorized by this Agreement which the Auction
Agent believes in good faith to have been given by the Company or
by a Broker-Dealer. The Auction Agent may record, by tape or
otherwise, telephone communications with the Company, with BD or
both.
(b) The Auction Agent may consult with counsel, and the
advice of such 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 good faith reliance
thereon.
(c) The Auction Agent shall not be required to advance,
expend or risk its own funds or otherwise incur or become exposed
to financial liability in the performance of its duties
hereunder.
(d) The Auction Agent may perform its duties and exercise
its rights hereunder either directly or by or through agents or
attorneys.
Section 3.3. Auction Agent's Disclaimer and
Representations. The Auction Agent makes no representation as to
the validity or adequacy of this Agreement or the shares of
Auction Preferred. The Auction Agent represents that it has been
duly organized, is validly existing and is in good standing under
the laws of the State of New York; has all necessary corporate
powers to execute and deliver this Agreement and to perform the
duties imposed on it as Auction Agent herein; and has, in fact,
validly executed and delivered this Agreement.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Termination. Any party may terminate this
Agreement at any time on five days' notice to the other party.
Section 4.2. Agent Member. At the date hereof, BD is, and
shall remain for the terms of this Agreement, a participant in,
or member of, the Securities Depository.
Section 4.3. Communications. Except for (i) communications
authorized to be by telephone by this Agreement or the Auction
Procedures or (ii) communications in connection with the Auctions
(other than those expressly required to be in writing), all
notices, requests and other communications to either party
hereunder shall be in writing (including telecopy or similar
writing) and shall be given to such party, addressed to it, at
its address or telecopier number set forth below.
If to BD:
Attention:
Telecopier No.:
Telephone No.:
If to the
Auction Agent: THE BANK OF NEW YORK
101 Barclays Street
7th Floor
New York, New York 10286
Attention: Auction Desk
Telecopier No.: (212) 815-3522
Telephone No.: (212) 815-3521
or such other address or telecopier number as such party may
hereafter specify for such purpose by notice to the other party.
Each such notice, request or communication shall be effective
(i) if given by telex, when such telex is transmitted to the
telex number specified herein and the appropriate answerback is
received or (ii) if given by any other means, when delivered at
the address specified herein. Communications shall be given on
behalf of BD by a BD Officer and on behalf of the Auction Agent
by an Authorized Officer. BD may record telephone communications
with the Auction Agent.
Section 4.4. Entire Agreement. This Agreement contains the
entire agreement between the parties relating to the subject
matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral,
written or inferred, between the parties relating to the subject
matter hereof.
Section 4.5. Benefits. Nothing in this Agreement, express
or implied, shall give to any person, other than the Auction
Agent and BD and their respective successors and assigns, any
benefit of any legal or equitable right, remedy or claim under
this Agreement.
Section 4.6. Amendment; Waiver. (a) This Agreement shall
not be deemed or construed to be modified, amended, rescinded,
cancelled or waived, in whole or part, except by a written
instrument signed by duly authorized representatives of the
parties hereto.
(b) Failure of either party to this Agreement to exercise
any right or remedy hereunder in the event of a breach of this
Agreement by the other party shall not constitute a waiver of any
such right or remedy with respect to any subsequent breach.
Section 4.7. Successors and Assigns. This Agreement shall
be binding upon, inure to the benefit of and be enforceable by
the respective successors and assigns of BD and the Auction
Agent.
Section 4.8. Severability. If any clause, provision or
section of this Agreement shall be ruled invalid or unenforceable
by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not
affect any of the remaining clauses, provisions or sections
hereof.
Section 4.9. Execution in Counterparts. This Agreement may
be executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same
instrument.
Section 4.10. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the date first above written.
THE BANK OF NEW YORK
By:
---------------------------
Name:
Title:
[NAME OF BROKER-DEALER]
By:
-------------------------
Name:
Title:
EXHIBIT A
CERTIFICATE OF DESIGNATIONS
[Insert Form of Certificate of Designations]
<PAGE>
EXHIBIT B
PURCHASER'S LETTER
[Insert Form of Purchaser's Letter]
<PAGE>
EXHIBIT C
SETTLEMENT PROCEDURES
[Insert Settlement Procedures]
<PAGE>
EXHIBIT D
[Insert Order Form]
<PAGE>
EXHIBIT E
[Insert Transfer Form]
<PAGE>
EXHIBIT F
[Insert Form of Notice of a Failure to Deliver]
<PAGE>
BROKER-DEALER AGREEMENT
Between
THE BANK OF NEW YORK
and
[NAME OF BROKER-DEALER]
Dated as of [ date ]
Relating to
FLEXIBLE RATE AUCTION PREFERRED
STOCK--SERIES L, M and N
of
FORD HOLDINGS, INC.
<PAGE>
EXHIBIT B
CERTIFICATE OF THE DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR
OTHER SPECIAL RIGHTS, AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, OF
FLEXIBLE RATE AUCTION PREFERRED STOCK,
SERIES L, SERIES M AND SERIES N
OF
FORD HOLDINGS, INC.
-----------------------------
Pursuant to Section 151(g) of the General Corporation Law
of the State of Delaware
FORD HOLDINGS, INC., a corporation organized and existing
under the laws of the State of Delaware, hereby certifies that
the following resolution was adopted by the Board of Directors
and by the Certificate of Designations Committee, pursuant to
authority conferred on the Certificate of Designations Committee
by the Board of Directors:
RESOLVED, that three new series of Preferred Stock of the
Corporation are hereby created and established, and the
designation and amount thereof and the voting powers, preferences
and relative, participating and other special rights of the
shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
1. Designation; Amount and Series. The Preferred Stock
created hereby shall consist of 2,150 shares of flexible rate
auction preferred stock issuable in the following Series: 750
shares designated "Flexible Rate Auction Preferred Stock--Series
L" ("Series L Preferred"), 750 shares designated "Flexible Rate
Auction Preferred Stock--Series M Preferred" ("Series M
Preferred"), and 650 shares designated "Flexible Rate Auction
Preferred Stock--Series N" ("Series N Preferred")(the Series L
Preferred, Series M Preferred and Series N Preferred are
collectively referred to as "Auction Preferred" or the "Preferred
Stock")
Each share of each separate Series of Auction Preferred
shall be identical and equal in all aspects to every other share
of such Series, and the shares of all of the Series shall, except
as expressly provided in this Certificate of Designations, be
identical and equal in all respects.
2. Definitions. Unless the context or use indicates
another or different meaning or intent, the following terms shall
have the following meanings, whether used in the singular or
plural:
"60-day 'AA' Composite Commercial Paper Rate," on any date,
means (i) the interest equivalent of the 60-day rate on
commercial paper placed on behalf of issuers whose corporate
bonds are rated "aa" by Moody's or AA by Standard & Poor's or the
equivalent of such rating by another rating agency, as such
60-day rate is made available on a discount basis or otherwise by
the Federal Reserve Bank of New York for the Business Day
immediately preceding such date, or (ii) in the event that the
Federal Reserve Bank of New York does not make available such a
rate, then the arithmetic average of the interest equivalent of
the 60-day rate on commercial paper placed on behalf of such
issuers, as quoted on a discount basis or otherwise by the
Commercial Paper Dealers to the Auction Agent for the close of
business on the Business Day immediately preceding such date. If
any Commercial Paper Dealer does not quote a rate required to
determine the 60-day "AA" Composite Commercial Paper Rate, the
60-day "AA" Composite Commercial Paper Rate shall be determined
on the basis of the quotation or quotations furnished by the
remaining Commercial Paper Dealer or Commercial Paper Dealers and
any Substitute Commercial Paper Dealer or Substitute Commercial
Paper Dealers selected by the Corporation to provide such rate or
rates not being supplied by any Commercial Paper Dealer or
Commercial Paper Dealers, as the case may be, or, if the
Corporation does not select any such Substitute Commercial Paper
Dealer or Substitute Commercial Paper Dealers, by the remaining
Commercial Paper Dealer or Commercial Paper Dealers. If the
Board of Directors of the Corporation shall make the adjustment
referred to in the second sentence of paragraph 3(b)(v), then (i)
if the Dividend Period Days shall be fewer than 70 days, such
rate shall be the interest equivalent of the 60-day rate on such
commercial paper, (ii) if the Dividend Period Days shall be 70 or
more days but fewer than 85 days, such rate shall be the
arithmetic average of the interest equivalent of the 60-day and
90-day rates on such commercial paper and (iii) if the Dividend
Period Days shall be 85 or more days but fewer than 99 days, such
rate shall be the interest equivalent of the 90-day rate on such
commercial paper. For purposes of such definition, "interest
equivalent" of a rate stated on a discount basis (a "discount
rate") for commercial paper of a given day's maturity shall be
equal to the quotient of (A) the discount rate divided by (B) the
difference between (x) 1.00 and (y) a fraction the numerator of
which shall be the product of the discount rate times the number
of days in which such commercial paper matures and the
denominator of which shall be 360.
"Affiliate" means any Person controlled by, in control of,
or under common control with, the Corporation.
"Applicable 'AA' Composite Commercial Paper Rate" means, for
any Long-Term Dividend Period on any date, (A) in the case of any
Long-Term Dividend Period of less than 70 days, the interest
equivalent of the 60-day rate, (B) in the case of any Long-Term
Dividend Period of 70 days or more but less than 85 days, the
arithmetic average of the interest equivalent of the 60-day and
90-day rates, (C) in the case of any Long-Term Dividend Period of
85 days or more but less than 120 days, the interest equivalent
of the 90-day rate, (D) in the case of any Long-Term Dividend
Period of 120 days or more but less than 148 days, the arithmetic
average of the interest equivalent of the 90-day and 180-day
rates, (E) in the case of any Long-Term Dividend Period of 148
days or more but less than 210 days, the interest equivalent of
the 180-day rate, (F) in the case of any Long-Term Dividend
Period of 210 days or more but less than 238 days, the arithmetic
average of the interest equivalent of the 180-day and 270-day
rates and (G) in the case of any Long-Term Dividend Period of 238
or more days, the interest equivalent of the 270-day rate, on
commercial paper placed on behalf of issuers whose corporate
bonds are rated "aa" by Moody's, AA by Standard & Poor's, or the
equivalent of such rating by another rating agency, as made
available on a discount basis or otherwise by the Federal Reserve
Bank of New York for the Business Day immediately preceding such
date or in the event that the Federal Reserve Bank of New York
does not make available any such rate, then the arithmetic
average of such rates, as quoted on a discount basis or
otherwise, by Commercial Paper Dealers, to the Auction Agent for
the close of business on the Business Day next preceding such
date. If any Commercial Paper Dealer does not quote a rate
required to determine the "AA" Composite Commercial Paper Rate,
the "AA" Composite Commercial Paper Rate shall be determined on
the basis of the quotation or quotations furnished by the
remaining Commercial Paper Dealer or Commercial Paper Dealers and
any Substitute Commercial Paper Dealer or Substitute Commercial
Paper Dealers selected by the Corporation to provide such rate or
rates not being supplied by any Commercial Paper Dealer or
Commercial Paper Dealers, as the case may be, or, if the
Corporation does not select any such Substitute Commercial Paper
Dealer or Substitute Commercial Paper Dealers, by the remaining
Commercial Paper Dealer or Commercial Paper Dealers. For
purposes of this definition, the "interest equivalent" means the
equivalent yield on a 360-day basis of a discount-basis security
to an interest-bearing security.
"Applicable Rate" means the rate per annum at which
dividends are payable on a Series for any Dividend Period for
such Series established pursuant to paragraph 3(c) hereof.
"Applicable Treasury Rate" on any date, with respect to any
Series of Auction Preferred with a Long-Term Dividend Period of
one year or more, means the interest equivalent of the rate for
direct obligations of the United States Treasury having an
original maturity which is equal to, or next lower than, the
length of such Long-Term Dividend Period, as published weekly by
the Federal Reserve Board in "Federal Reserve Statistical Release
H.15 (519)--Selected Interest Rates," or any successor
publication by the Federal Reserve Board within five Business
Days preceding such date. In the event that the Federal Reserve
Board does not publish such weekly per annum interest rate, or if
such release is not yet available, the Applicable Treasury Rate
shall be the arithmetic mean of the secondary market bid rates as
of approximately 3:30 p.m., New York City time, on the Business
Day next preceding such date of the U.S. Government Securities
Dealers obtained by the Auction Agent (in the case of a
determination of the Applicable Treasury Rate on any Auction
Date) or the Corporation (in the case of a determination of such
rate on any other day) for the issue of direct obligations of the
United States Treasury, in an aggregate principal amount of at
least $1,000,000, with a remaining maturity equal to, or next
lower than, the length of such Long-Term Dividend Period. If any
U.S. Government Securities Dealer does not quote a rate required
to determine the Applicable Treasury Rate, the Applicable
Treasury Rate shall be determined on the basis of the quotation
or quotations furnished by the remaining U.S. Government
Securities Dealer or Dealers or any Substitute U.S. Government
Securities Dealer or Dealers selected by the Corporation to
provide such rate or rates not being supplied by any U.S.
Government Securities Dealer or Dealers, as the case may be, or,
if the Corporation does not select any such Substitute U.S.
Government Securities Dealer or Dealers, by the remaining U.S.
Government Securities Dealer or Dealers; provided that, in the
event the Corporation is unable to cause such quotations to be
furnished to the Auction Agent (or, if applicable, to the
Corporation) by such sources, the Corporation may cause the
Applicable Treasury Rate to be furnished to the Auction Agent
(or, if applicable, to the Corporation) by such alternative
source or sources as the Corporation in good faith deems to be
reliable. For purposes of this definition, the "interest
equivalent" of a rate stated on a discount basis shall be equal
to the quotient of (A) the discount rate divided by (B) the
difference between 1.00 and the discount rate.
"Auction" means each periodic operation of the Auction
Procedures.
"Auction Agent" means The Bank of New York, unless or until
another bank or trust company has been appointed as such by a
resolution of the Board of Directors of the Corporation.
"Auction Date" has the meaning specified in paragraph
8(a)(iv) below.
"Auction Preferred" or "Preferred Stock" means all of the
Series.
"Auction Procedures" means the procedures for conducting
Auctions set forth in paragraph 8 below.
"Board of Directors" means the Board of Directors of the
Corporation or, unless the context otherwise requires, an
authorized committee thereof.
"Business Day" means a day on which the New York Stock
Exchange is open for trading and which is not a day on which
banks in the State of New York are authorized or obligated by law
or executive order to close.
"Cash-Out Merger" has the meaning specified in Section 4(b)
hereof.
"Certificate of Designations Committee" means the committee
of the Board of Directors on which the Board of Directors has
conferred authority to fix the designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions of Auction Preferred.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commercial Paper Dealers" means Goldman, Sachs & Co.,
Lehman Commercial Paper Incorporated, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated
or, in lieu of any thereof, their respective affiliates or
successors.
"Common Stock" means all shares now or hereafter issued of
the class of common stock of the Corporation presently authorized
and any other shares of stock into which such stock may hereafter
be exchanged from time to time.
"Corporation" means Ford Holdings, Inc., a Delaware
corporation, or its successor.
"Date of Original Issue" means, as to any share, the date on
which the Corporation initially issues such share of Auction
Preferred.
"Default Period" has the meaning specified in Section
5(c)(i) hereof.
"Dividend Payment Date" has the meaning specified in Section
3(b)(vi) hereof.
"Dividend Period" has the meaning set forth in paragraph
3(b)(vii) below.
"Dividend Period Days" has the meaning set forth in
paragraph 3(b)(v) below.
"Dividend Quarter" has the meaning set forth in paragraph
3(b)(vi) below.
"Failure to Deposit" means, with respect to any Series of
Auction Preferred, the failure by the Corporation to irrevocably
deposit with the Paying Agent sufficient funds for the payment of
such dividends and to give the Paying Agent irrevocable
instructions to apply such funds and, if applicable, the income
and proceeds therefrom, to the payment of such dividends not
later than noon on the Business Day immediately preceding each
Dividend Payment Date with respect to which dividends on such
shares of Auction Preferred.
"Flexible Rate Auction Preferred Stock" means the Flexible
Rate Auction Preferred Stock (Exchange), Series A, Series B,
Series C, Series D, Series E, Series F, Series G, Series H,
Series I, Series J and Series K, par value $1.00 per share,
liquidation preference $100,000 per share, previously issued by
the Corporation.
"Holder" or "holder" means, when used with respect to
Auction Preferred, the Flexible Rate Auction Preferred Stock, the
Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock, the Series D Preferred Stock, the
Parity Preferred or the Voting Preferred, the holder of such
shares as the same appears on the Stock Books.
"Initial Dividend Payment Date" has the meaning set forth in
paragraph 3(b)(vii) below.
"Junior Liquidation Stock" has the meaning specified in
Section 4(a) hereof.
"Junior Stock" shall have the meaning specified in Section
3(d)(ii) hereof.
"LIBOR" means, on any date for any Dividend Period, the
arithmetic average (rounded to the next higher 1/16 of 1%),
computed by the Auction Agent of the following rates per annum or
arithmetic averages thereof quoted by each of the principal
London offices of the Reference Banks, at which United States
dollar deposits in the amount of U.S. $10,000,000 are offered by
such Reference Banks (i) in the case of any Dividend Period with
Dividend Period Days of less than 30 days, the one-month rate,
(ii) in the case of any Dividend Period with Dividend Period Days
of 30 days or more but less than 70 days, the two-month rate,
(iii) in the case of any Dividend Period with Dividend Period
Days of 70 or more days but less than 85 days, the two-month and
three-month rates and (iv) in the case of any Dividend Period
Days of 85 or more but less than 98 days or in case a Failure to
Deposit occurs during a Long-Term Dividend Period, the
three-month rate, to leading banks in the London interbank
market at approximately 11:00 a.m. (London time) on the first day
of such Dividend Period (or Dividend Quarter), or if such day is
not a day on which dealings in United States dollars are
transacted in the London interbank market, then on the next
preceding day on which such dealings are transacted in such
market. If any Reference Bank does not quote a rate required to
determine LIBOR, LIBOR shall be determined on the basis of the
quotations furnished by the remaining Reference Bank or Reference
Banks and any Substitute Reference Bank or Substitute Reference
Banks selected by the Corporation to provide such quotation or
quotations not being supplied by any Reference Bank or Reference
Banks, as the case may be, or, if the Corporation does not select
any Substitute Reference Bank or Substitute Reference Banks, by
the remaining Reference Bank or Reference Banks.
"Liquidation Preferred" has the meaning specified in Section
4(d) hereof.
"Long-Term Dividend Period" has the meaning set forth in
paragraph 3(b)(vii) below.
"Maximum Applicable Rate", with respect to any Series with a
Short-Term Dividend Period, at any Auction shall be the rate
obtained by multiplying the 60-day "AA" Composite Commercial
Paper Rate on the date of such Auction, and with respect to any
Series with a Long-Term Dividend Period, the Maximum Applicable
Rate at any Auction shall be the rate obtained by multiplying the
Reference Rate, in each case, by a percentage determined as set
forth below based on the lower of the credit rating or ratings
assigned to the Auction Preferred by Moody's and Standard &
Poor's (or if Moody's or Standard & Poor's or both shall not make
such rating available, the equivalent of either or both of such
ratings by a Substitute Rating Agency or two Substitute Rating
Agencies or, in the event that only one such rating shall be
available, the percentage shall be based on such rating).
<TABLE>
<CAPTION>
Applicable Percentage of
Credit Rating 60-day "AA" Composite
Standard & Commercial Paper Rate
Moody's Poor's or Reference Rate
- -------- ------------------ --------------------------
<S> <C> <C>
"aa3" or Above AA- or Above 150%
"a3" to "a1" A- to A+ 200%
"baa3" to "baa1" BBB- to BBB+ 225%
Below "baa3" Below BBB- 250%
</TABLE>
The Corporation shall take all reasonable action necessary to
enable Moody's and Standard & Poor's to provide a rating for each
Series of Auction Preferred. If either Moody's or Standard &
Poor's shall not make such rating available or neither Moody's
nor Standard & Poor's shall make such a rating available, Bear,
Stearns & Co. Inc., Goldman, Sachs & Co. and Lehman Brothers Inc.
or their affiliates and successors, after consultation with the
Corporation, shall select a Substitute Rating Agency or two
Substitute Rating Agencies.
"Merger Premium" has the meaning set forth in paragraph
3(b)(viii) below.
"Minimum Holding Period" has the meaning set forth in
paragraph 3(b)(v) below.
"Moody's" means Moody's Investors Service, Inc., or its
successor, so long as such agency (or successor) is in the
business of rating securities of the type of the Auction
Preferred and, if such agency is not in such business, then a
Substitute Rating Agency.
"Non-Auction Rate" has the meaning set forth in
paragraph 3(c)(i) below.
"Normal Dividend Payment Date" has the meaning set forth in
paragraph 3(b)(ii) below.
"Notice of Long-Term Dividend Period" has the meaning set
forth in paragraph 3(b)(viii) below.
"Notice of Removal" has the meaning set forth in paragraph
3(b)(viii) below.
"Notice of Revocation" has the meaning set forth in
paragraph 3(b)(viii) below.
"Outstanding" means, as of any date, shares of Auction
Preferred, Voting Preferred or Parity Preferred, as the case may
be, theretofore issued by the Corporation except, without
duplication, (i) any shares of Auction Preferred, Voting
Preferred or Parity Preferred, as the case may be, theretofore
cancelled or delivered for cancellation by the Corporation, (ii)
any shares of Auction Preferred, Voting Preferred or Parity
Preferred, as the case may be, represented by any certificate in
lieu of which a new certificate has been executed and delivered
by the Corporation and (iii) any shares of Auction Preferred,
Voting Preferred or Parity Preferred, as the case may be, held by
the Corporation as treasury stock.
"Parity Preferred" has the meaning specified in Section 5(a)
hereof.
"Paying Agent" means the Auction Agent unless another bank
or trust company has been appointed for such purpose by
resolution of the Board of Directors of the Corporation.
"Person" means and include an individual, a partnership, a
corporation, a trust, an unincorporated association, a joint
venture or other entity.
"Rating Agencies" means Moody's and Standard & Poor's.
"Reference Banks" means The Chase Manhattan Bank (National
Association), Morgan Guaranty Trust of New York and National
Westminster Bank PLC, or, in lieu of any thereof, their
respective affiliates or successors.
"Reference Rate" means for Long-Term Dividend Periods
(i) from 50 days to 270 days, the Applicable "AA" Composite
Commercial Paper Rate, (ii) from 270 days to one year, the higher
of the 270-day Applicable "AA" Composite Commercial Paper Rate
and the one-year Applicable Treasury Rate and (iii) from one year
to 10 years, the Applicable Treasury Rate.
"Regular Preferred Directors" has the meaning set forth in
paragraph 5(a) below.
"Series" means any of Series L Preferred, Series M Preferred
or Series N Preferred of the Auction Preferred authorized by this
Certificate of Designations.
"Series A Preferred Stock" means the Series A Cumulative
Preferred Stock, par value $1.00 per share, liquidation
preference $100,000 per share, of the Corporation.
"Series B Preferred Stock" means the Series B Cumulative
Preferred Stock, par value $1.00 per share, liquidation
preference $100,000 per share, of the Corporation.
"Series C Preferred Stock" means the Series C Cumulative
Preferred Stock, par value $1.00 per share, liquidation
preference $100,000 per share, of the Corporation.
"Series D Preferred Stock" means the Series D Cumulative
Preferred Stock, par value $1.00 per share, liquidation
preference $100,000 per share, of the Corporation.
"Short-Term Dividend Period" has the meaning set forth in
paragraph 3(b)(vii) below.
"Special Preferred Directors" has the meaning specified in
Section 5(c)(i) hereof.
"Standard & Poor's" means Standard & Poor's Ratings Group,
or its successor, so long as such agency (or successor) is in the
business of rating securities of the type of the Auction
Preferred and, if such agency is not in such business, then a
Substitute Rating Agency.
"Stock Books" means the stock transfer books of the
Corporation maintained by the Paying Agent.
"Substitute Commercial Paper Dealer" means CS First Boston
Corporation or PaineWebber Incorporated, or, in lieu of each
thereof, their respective affiliates or successors.
"Substitute Rating Agency" means a nationally recognized
statistical rating organization (as that term is used in the
rules and regulations of the Securities Exchange Act
of 1934) selected by Bear, Stearns & Co. Inc., Goldman, Sachs &
Co. and Lehman Brothers Inc. after consultation with the
Corporation.
"Substitute Reference Bank" means the principal London
offices of Citibank, N.A., Deutsche Bank Aktiengesellschaft or
Swiss Bank Corporation or, in lieu thereof, their respective
successors, or, if none of such Substitute Reference Banks are
engaged in dealings in United States dollars in the London
interbank market, then a bank or banks selected by the
Corporation, engaged in dealings in United States dollars in the
London interbank market.
"Substitute U.S. Government Securities Dealer" means the CS
First Boston Corporation or PaineWebber Incorporated, or, in lieu
of each thereof, their respective affiliates or successors.
"Term Selection Agent" means, collectively, Bear, Stearns &
Co. Inc., Goldman, Sachs & Co. and Lehman Brothers Inc., unless
or until another investment banking firm has been appointed as
such by a resolution of the Board of Directors of the
Corporation.
"U.S. Government Securities Dealer" means Goldman, Sachs &
Co., Lehman Government Securities Incorporated, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co.
Incorporated or, in lieu of any thereof, their respective
affiliates or successors.
"Voting Preferred" has the meaning specified in Section 5(b)
hereof.
3. Dividends. (a) Holders of shares of Auction Preferred
shall be entitled to receive, when, as and if declared by the
Board of Directors of the Corporation, out of surplus, or funds
legally available therefor, cumulative cash dividends at the
Applicable Rate determined as set forth in paragraph 3(c)(i)
below, and no more, payable on the respective dates set forth
below.
(b)(i) Dividends on the shares of each Series shall
accumulate at the respective Applicable Rates for such Series
(whether or not declared) from the Date of Original Issue.
(ii) Dividends on the shares of each Series with a
Short-Term Dividend Period shall be payable commencing on the
Initial Dividend Payment Date for such Series and thereafter
except as provided below in this paragraph 3(b), on each seventh
Monday with respect to Series L Preferred, each seventh Wednesday
with respect to Series M Preferred and each seventh Thursday with
respect to Series N Preferred following the preceding Dividend
Payment Date for such Series. Dividends on the shares of each
Series with a Long-Term Dividend Period shall be payable, except
as provided below in this paragraph 3(b), on the last day of such
Long-Term Dividend Period and, if occurring prior to the last day
of such Long-Term Dividend Period, on the first day of the fourth
month after the commencement of such Long-Term Dividend Period
and on the first day of each succeeding third month thereafter.
Each day on which dividends on shares of a Series would be
payable as determined as set forth in this clause (ii) but for
the provisions set forth below in this paragraph 3(b) is referred
to herein as a "Normal Dividend Payment Date."
(iii) In the case of dividends payable on the shares of a
Series with a Short-Term Dividend Period, if:
(A) (I) The Securities Depository shall continue to make
available to its members and participants the amounts due as
dividends on the shares of such Series in next-day funds on the
dates on which such dividends are payable and (II) a Normal
Dividend Payment Date for such Series is not a Business Day, or
the day next succeeding such Normal Dividend Payment Date is not
a Business Day, then dividends shall be payable on the first
Business Day preceding such Normal Dividend Payment Date that is
next succeeded by a Business Day; or
(B) (I) The Securities Depository shall make available to
its members and participants the amounts due as dividends on the
shares of such Series in immediately available funds on the dates
on which such dividends are payable (and the Securities
Depository shall have so advised the Auction Agent) and (II) a
Normal Dividend Payment Date for such Series is not a Business
Day, then dividends shall be payable on the first Business Day
following such Normal Dividend Payment Date.
(iv) In the case of dividends payable on the shares of a
Series with a Long-Term Dividend Period, if:
(A) (I) The Securities Depository shall continue to make
available to its members and participants the amounts due as
dividends on the shares of such Series in next-day funds on the
dates on which such dividends are payable and (II) a Normal
Dividend Payment Date for such Series is not a Business Day, or
the day next succeeding such Normal Dividend Payment Date is not
a Business Day, then dividends shall be payable on the first
Business Day following such Normal Dividend Payment Date that is
next succeeded by a Business Day; or
(B) (I) The Securities Depository shall make available to
its members and participants the amounts due as dividends on the
shares of such Series in immediately available funds on the dates
on which such dividends are payable (and the Securities
Depository shall have so advised the Auction Agent) and (II) a
Normal Dividend Payment Date for such Series is not a Business
Day, then dividends shall be payable on the first Business Day
following such Normal Dividend Payment Date.
(v) Notwithstanding the foregoing, if the date on which
dividends on the shares of any Series would be payable as
determined as set forth in clause (ii), (iii) or (iv) above is a
day that would result in the number of days between successive
Auction Dates for such Series (determined by including the first
Auction Date and excluding the second Auction Date) not being at
least equal to the then current Minimum Holding Period, then
dividends on such shares shall be payable, if either
clause (iii)(A) or (iv)(A) above would be applicable to such
Series, on the first Business Day following such date on which
dividends would be so payable that is next succeeded by a
Business Day or, if either clause (iii)(B) or (iv)(B) above would
be applicable to such Series, on the first Business Day following
such day on which dividends would be so payable, that in either
case results in the number of days between such successive
Auction Dates for such Series (determined as set forth above)
being at least equal to the then current Minimum Holding Period.
In addition, notwithstanding the foregoing, in the event of
a change in law altering the minimum holding period (the "Minimum
Holding Period") required for corporate taxpayers generally to be
entitled to the dividends received deduction for federal income
tax purposes in respect of dividends (other than extraordinary
dividends) paid on preferred stock held by non-affiliated
corporations, the Board of Directors of the Corporation may
adjust the period of time between Dividend Payment Dates for each
Series so as to adjust uniformly the number of days (such number
of days without giving effect to the provisions in clauses (iii)
and (iv) above being hereinafter referred to as "Dividend Period
Days") in Dividend Periods for each Series commencing after the
date of such change in law to equal or exceed the then current
Minimum Holding Period, provided that the number of Dividend
Period Days shall not exceed by more than nine days the length of
such then current Minimum Holding Period and shall be evenly
divisible by seven, and the maximum number of Dividend Period
Days in no event shall exceed 98 days. Upon any such change in
the number of Dividend Period Days as a result of a change in
law, the Corporation shall mail notice of such change by
first-class mail, postage prepaid, to the Auction Agent and the
Paying Agent and to each Existing Holder.
(vi) Each date on which dividends on the shares of a Series
shall be payable as determined as set forth above shall be
referred to herein as a "Dividend Payment Date" for such Series.
If applicable, the period from the preceding Dividend Payment
Date to the next Dividend Payment Date for any Series with a
Long-Term Dividend Period is herein referred to as a "Dividend
Quarter." Although any particular Dividend Payment Date for a
Series may not occur on the originally scheduled Normal Dividend
Payment Date for such Series because of the foregoing provisions,
each succeeding Dividend Payment Date for such Series shall be,
subject to such provisions, the date determined as set forth in
clause (ii) above as if each preceding Dividend Payment Dates had
occurred on the respective originally scheduled Normal Dividend
Payment Date.
(vii) The Initial Dividend Payment Dates for the initial
Dividend Periods for Series L Preferred shall be February 13,
1995, for Series M Preferred shall be March 8, 1995 and for
Series N Preferred shall be April 3, 1995. After the initial
Dividend Period for each Series, each subsequent Dividend Period
for such Series (except for the adjustments for non-Business Days
provided in clauses (iii) and (iv) above) shall be 49 days (each
such 49-day period, subject to any adjustment as a result of a
change in law lengthening the Minimum Holding Period as provided
in clause (v) above, being referred to herein as a "Short-Term
Dividend Period"), unless as provided in clause (viii) below, the
Term Selection Agent specifies that any such subsequent Dividend
Period shall be a Dividend Period of any specified number of days
greater than a Short-Term Dividend Period and consisting of a
whole number of weeks (each such period being referred to herein
as a "Long-Term Dividend Period," and each such Short-Term
Dividend Period and Long-Term Dividend Period (together with the
periods commencing on the Date of Original Issue and ending on
the respective Initial Dividend Payment Dates for each Series)
being referred to herein as a "Dividend Period"). After the
Initial Dividend Period for a Series, each successive Dividend
Period for such Series shall commence on the Dividend Payment
Date ending the preceding Dividend Period and shall end (i) in
the case of any Series with a Short-Term Dividend Period, on the
next Dividend Payment Date for such Series and (ii) in the case
of any Series with a Long-Term Dividend Period, on the last day
of the Long-Term Dividend Period specified by the Term Selection
Agent in the related notice of Long-Term Dividend Period.
(viii) Not less than 10 and not more than 20 days prior to
an Auction Date for any Series and based on the criteria set
forth below, the Term Selection Agent may give telephonic and
written notice to the Corporation, the Auction Agent, the Paying
Agent and the Securities Depository that the next succeeding
Dividend Period for such Series will be longer than a Short-Term
Dividend Period (a "Notice of Long-Term Dividend Period"). Such
notice will specify the next succeeding Dividend Period for such
Series as a Long-Term Dividend Period, which may be any period
designated by the Term Selection Agent greater than the
Short-Term Dividend Period and consisting of a whole number of
weeks and whether such shares shall be entitled under the
circumstances set forth in paragraph 5(e)(iii) to a premium upon
consolidation or merger of the Corporation with or into any other
corporation ("Merger Premium"), provided that the Term Selection
Agent may not give a Notice of Long-Term Dividend Period
(including any Merger Premium) for such Series (and any such
notice shall be null and void) unless Sufficient Clearing Bids
were made in the last occurring Auction for such Series and full
cumulative dividends for all Series payable prior to such date
have been paid in full. The Term Selection Agent shall state in
each Notice of Long-Term Dividend Period (i) that the next
succeeding Dividend Period for such Series shall be a Long-Term
Dividend Period, (ii) the term thereof and (iii) whether such
shares shall be entitled under the circumstances set forth in
paragraph 5(e)(iii) to a Merger Premium in the event of a merger
or consolidation. The Term Selection Agent may establish a
Long-Term Dividend Period (including any Merger Premium) for the
shares of a Series of Auction Preferred, if the Term Selection
Agent determines that such Long-Term Dividend Period (including
any Merger Premium), in its sole opinion, provides the
Corporation with the most favorable financing alternative based
upon the following: (i) short-term and long-term market rates
and indices of such short-term and long-term rates, (ii) the
amounts, maturities and interest or dividend rates on the then
outstanding securities of the Corporation or its subsidiaries,
(iii) market supply and demand for short-term and long-term
securities, (iv) yield curves for short-term and long-term
securities comparable to the shares of Auction Preferred, (v)
industry and financial conditions which may affect the shares of
Auction Preferred including the Term Selection Agent's
expectations with respect thereto, (vi) current tax laws and
administrative interpretations with respect thereto, (vii) the
number of shares of Auction Preferred Outstanding on the next
Auction Date and (viii) the number of potential purchasers. Any
Notice of Long-Term Dividend Period may be revoked by the Term
Selection Agent on or prior to the second Business Day prior to
the related Auction by telephonic and written notice (a "Notice
of Revocation") to the Corporation, the Auction Agent, the Paying
Agent and the Securities Depository, specifying that the Term
Selection Agent has determined that because of subsequent changes
in any of the foregoing factors, such Long-Term Dividend Period
would not result in the most favorable financing alternative for
the Corporation, and shall be deemed to have been revoked if on
or prior to the second Business Day prior to the related Auction,
the Term Selection Agent shall have been removed and the
Corporation shall have given written and telephonic notice of
such removal ("Notice of Removal") to the Auction Agent, the
Paying Agent and the Securities Depository. Except with respect
to a Notice of Long-Term Dividend Period that is deemed to be
revoked, any Long-Term Dividend Period specified by the Term
Selection Agent for each Series of Auction Preferred and any
revocation thereof shall be conclusive and binding on the
Corporation and the Holders.
The Corporation may remove the Term Selection Agent for any
Series of Auction Preferred upon 5 days' written notice. If
there is no Term Selection Agent with respect to any Dividend
Period, then such Dividend Period shall be a Short-Term Dividend
Period.
If the Term Selection Agent does not give a Notice of
Long-Term Dividend Period with respect to the next succeeding
Dividend Period for any Series of Auction Preferred or has given
a Notice of Long-Term Dividend Period but has also delivered a
Notice of Revocation with respect thereto or such Notice of
Long-Term Dividend Period shall be deemed to have been revoked,
such next succeeding Dividend Period shall be a Short-Term
Dividend Period. In addition, in the event the Term Selection
Agent has given a Notice of Long-Term Dividend Period with
respect to the next succeeding Dividend Period for any Series of
Auction Preferred and has not given a Notice of Revocation with
respect thereto and such Notice of Long-Term Dividend Period
shall not have been deemed revoked, but Sufficient Clearing Bids
are not made in the related Auction for such Series or such
Auction is not held for any reason, such next succeeding Dividend
Period shall, notwithstanding such Notice of Long-Term Dividend
Period, be a Short-Term Dividend Period and the Term Selection
Agent may not again give a Notice of Long-Term Dividend Period
(and any such notice shall be null and void) for such Series
until Sufficient Clearing Bids have been made in an Auction with
respect to a Short-Term Dividend Period for such Series.
(ix) Not later than noon on the Business Day immediately
preceding each Dividend Payment Date with respect to which
dividends on any shares of Auction Preferred have been declared,
the Corporation shall irrevocably deposit with the Paying Agent
sufficient funds for the payment of such dividends and shall give
the Paying Agent irrevocable instructions to apply such funds
and, if applicable, the income and proceeds therefrom, to the
payment of such dividends.
(x) Each dividend on the shares of any Series declared by
the Board of Directors of the Corporation shall be paid to
Holders of such shares as such Holders' names appear on the Stock
Books on the related record date, which shall be the opening of
business on the Business Day immediately preceding the Dividend
Payment Date for such dividend. Subject to paragraph 3(d)(i)
below, dividends on the shares of any Series of Auction Preferred
in arrears for any past Dividend Period (and for any past
Dividend Quarter during a Long-Term Dividend Period) may be
declared by the Board of Directors of the Corporation and paid on
any date fixed by the Board of Directors of the Corporation, on a
regular Dividend Payment Date or otherwise, to Holders of such
shares as such Holders' names appear on the Stock Books on the
related record date fixed by the Board of Directors of the
Corporation, which shall not be more than 15 days before the date
fixed for the payment of such dividends.
(c)(i)(A) The initial Dividend Rate for the initial
Dividend Period for Series L Preferred shall be 4.792% per annum,
for Series M Preferred shall be 4.917% per annum and for Series N
Preferred shall be 7.500% per annum. The dividend rate on the
shares of each Series for each subsequent Dividend Period shall
be the rate per annum determined for such Series pursuant to
paragraph 8 below; provided, however, that in the event that an
Auction for any Dividend Period for any Series is not held for
any reason (other than as a result of the existence of a Failure
to Deposit on the Auction Date for such Dividend Period), the
dividend rate on the shares of such Series for such Dividend
Period shall be the Non-Auction Rate on the Auction Date with
respect to such Dividend Period. The "Non-Auction Rate" for any
Series on an Auction Date for such Series shall be the greater of
(x) the Applicable Rate in effect for such Series immediately
prior to such Auction Date or (y) the Maximum Applicable Rate in
effect on such Auction Date for a Short-Term Dividend Period,
regardless of whether an Auction is held. The dividend rate on
the shares of any Series for any Dividend Period or part thereof
determined as set forth in this paragraph 3(c) is referred to
herein as the "Applicable Rate" for such Series for such Dividend
Period or part thereof.
(B) In the event a Failure to Deposit occurs prior to the
beginning of a Dividend Period and is not cured in accordance
with the next succeeding sentence, Auctions for such Series will
be suspended, until such time as set forth below, and the
Applicable Rate for shares of such Series for each Dividend
Period (until Auctions are resumed) commencing after such Failure
to Deposit shall be equal to 200% of LIBOR on the first day of
each such Dividend Period and each such Dividend Period shall be
a Short-Term Dividend Period. Any such Failure to Deposit with
respect to the shares of any Series shall be deemed cured if by
12:00 noon, New York City time, on the third Business Day next
succeeding any such Failure to Deposit, the Corporation shall
have deposited with the Auction Agent all accumulated and unpaid
dividends on the shares of such Series, including the full amount
of any dividends to be paid with respect to the Dividend Period
with respect to which such Failure to Deposit occurred, plus an
amount computed by multiplying (i) 200% of the 60-Day "AA"
Composite Commercial Paper Rate for the Dividend Period during
which such Failure to Deposit occurred on the Dividend Payment
Date for such Dividend Period by (ii) a fraction, the numerator
of which shall be the number of days for which such Failure to
Deposit is not cured in accordance with this sentence (including
the day such Failure to Deposit occurs and excluding the day such
Failure to Deposit is cured) and the denominator of which shall
be 360, and applying the rate obtained against the aggregate
liquidation preference of the shares of such Series then
outstanding.
(C) In the event a Failure to Deposit occurs during a
Long-Term Dividend Period, the Applicable Rate for such Dividend
Period shall remain unchanged, and an additional amount computed
by multiplying (i) 200% of LIBOR on the date on which such
Failure to Deposit occurred by (ii) a fraction, the numerator of
which shall be the number of days for which such Failure to
Deposit is not cured (including the day such Failure to Deposit
occurs and excluding the day such Failure to Deposit is cured)
and the denominator of which shall be 360, and applying the rate
obtained against accumulated dividends not paid when due, shall
accumulate as additional dividends on the shares of such Series
of Auction Preferred. In the event that such Failure to Deposit
is not cured prior to the next succeeding Auction Date for shares
of such Series, Auctions for such Series shall be suspended, the
next succeeding Dividend Period shall be a Short-Term Dividend
Period and the Applicable Rate shall be equal to 200% of LIBOR on
the first day of such Dividend Period. Thereafter until such
Failure to Deposit shall have been cured and full and cumulative
dividends on the shares of such Series shall have been paid in
full or the Board of Directors of the Corporation shall have
declared a dividend in such amount and funds sufficient for the
payment thereof shall have been irrevocably deposited with the
Paying Agent, each subsequent Dividend Period and Applicable Rate
for such Series will be determined pursuant to the next preceding
paragraph.
(D) If prior to an Auction Date for shares of such Series,
full and cumulative dividends shall have been paid in full or the
Board of Directors of the Corporation shall have declared a
dividend in such amount and funds sufficient for the payment
thereof shall have been irrevocably deposited with the Paying
Agent, Auctions for such Series will resume.
(ii) The amount of dividends per share of any Series of the
Auction Preferred payable for each Dividend Period (or for each
Dividend Quarter during any Long-Term Dividend Period) for any
such Series shall be computed by multiplying the Applicable Rate
for each Dividend Period (or Dividend Quarter) by a fraction the
numerator of which shall be the number of days in the Dividend
Period (or Dividend Quarter) (calculated by counting the first
day thereof but excluding the last day thereof) such share was
outstanding and the denominator of which shall be 360 and
multiplying the amount so obtained by $100,000.
(d)(i) Except as hereinafter provided, no dividends shall
be declared or paid or set apart for payment on the shares of any
Series for any period unless full cumulative dividends have been
or contemporaneously are declared and paid on each of the other
Series through the most recent applicable Dividend Payment Date
for each Series. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or
payments on the shares of Auction Preferred which may be in
arrears.
(ii) So long as any shares of Auction Preferred are
Outstanding, the Corporation shall not declare, pay or set apart
for payment any dividend (other than a dividend in shares of, or
options, warrants or rights to subscribe for or purchase shares
of, Common Stock or Junior Stock (as defined below)) or other
distribution in respect of its Common Stock or any other stock of
the Corporation ranking junior to the shares of Auction Preferred
as to dividends or upon liquidation ("Junior Stock"), or call for
redemption, redeem, purchase or otherwise acquire for
consideration any shares of its Common Stock or Junior Stock
(except by conversion into or exchange for other shares of Common
Stock or Junior Stock) unless full cumulative dividends on all
shares of Auction Preferred for all past Dividend Periods (and
for all past Dividend Quarters) shall have been declared and paid
(or declared and a sum sufficient for the payment of the
dividends set apart for payment). No dividends shall be declared
or paid or set apart for payment on any shares of Auction
Preferred for any period unless full cumulative dividends have
been or contemporaneously are declared and paid on each of the
shares of Auction Preferred and Parity Preferred through the most
recent applicable Dividend Payment Date for such shares.
(iii) Any dividend payment made on shares of Auction
Preferred shall first be credited against the dividends
accumulated with respect to the earliest Dividend Period (or, if
applicable, the earliest Dividend Quarter) for which dividends
have not been paid.
(e) The Corporation may not purchase or otherwise acquire
any shares of Auction Preferred during any period when dividend
payments on any Outstanding shares of Auction Preferred or Parity
Preferred are in arrears.
4. Rights on Liquidation or Cash-Out Merger. (a) Upon the
liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or involuntary, holders of Auction
Preferred shall be entitled to receive, out of assets of the
Corporation available for distribution to stockholders after
satisfying claims of creditors but before any payment or
distribution on the Common Stock or on any other class of stock
ranking junior to the shares of Auction Preferred upon
liquidation ("Junior Liquidation Stock"), a liquidating
distribution in the amount of $100,000 per share, which shall be
the liquidation preference of such shares, plus an amount equal
to accumulated and unpaid dividends on each such share (whether
or not declared) to and including the date of final dissolution.
Unless and until payment in full has been made to holders of
shares of Auction Preferred of the liquidating distributions to
which they are entitled as provided in this Section 4, no
dividends or distributions shall be made to holders of the Common
Stock or the Junior Liquidation Stock, no payment or delivery or
commitment to make payment or delivery of any money or assets to
any Affiliate shall be made and no purchase, redemption or other
acquisition for any consideration by the Corporation shall be
made in respect of the Common Stock or the Junior Liquidation
Stock. After the payment to holders of shares of Auction
Preferred of the full amount of the liquidating distributions to
which they are entitled pursuant to the second next preceding
sentence, holders of the shares of Auction Preferred (in their
capacity as such holders) shall have no right or claim to any of
the remaining assets of the Corporation.
(b) In any merger or consolidation of the Corporation with
or into any other corporation, including any Affiliate, or a
merger or consolidation of any other corporation, including any
Affiliate, with or into the Corporation, which merger or
consolidation by its terms provides for the payment of only cash
to holders of the Auction Preferred, each holder of Auction
Preferred shall be entitled to receive an amount equal to the
liquidation preference of the shares of Auction Preferred held by
such holder, any Merger Premium, plus an amount equal to
accumulated and unpaid dividends on such shares to and including
the date of payment thereof, and no more, in exchange for such
shares of Auction Preferred (a "Cash-Out Merger").
(c) Neither the sale, lease or exchange (for cash, stock,
securities or other consideration) of all or substantially all of
the property and assets of the Corporation, nor the merger or
consolidation of any other corporation with or into the
Corporation, nor the merger or consolidation of the Corporation
with or into any other corporation, shall be deemed to be a
dissolution, liquidation or winding up of the affairs of the
Corporation, voluntary or involuntary, for the purposes of this
Section 4; provided, however, that any Cash-Out Merger shall be
deemed to be a liquidation of the Corporation solely for purposes
of determining the rights of the holders of shares of Auction
Preferred in respect of such Cash-Out Merger.
(d) If upon liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the
assets of the Corporation available for distribution to the
holders of Auction Preferred and any other preferred stock of the
Corporation, including the Flexible Rate Auction Preferred Stock,
the Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock and the Series D Preferred Stock,
ranking upon liquidation on a parity with the Auction Preferred
(the "Liquidation Preferred"), shall be insufficient to pay the
full amount of the liquidating distributions to which holders of
Auction Preferred are entitled pursuant to Section 4(a) above and
liquidating distributions to which holders of the Liquidation
Preferred are entitled, then such assets shall be distributed
among the holders of Auction Preferred and Liquidation Preferred
ratably in proportion to the full amount of distributions to
which each holder of Auction Preferred and Liquidation Preferred
would have been entitled.
5. Voting Rights. (a) Election of Directors. Holders of
the shares of Auction Preferred and shares of Voting Preferred
shall have the right, voting as a single class together with
holders of all other shares of preferred stock of the
Corporation, including the Flexible Rate Auction Preferred Stock,
the Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock and the Series D Preferred Stock,
ranking on a parity with the shares of Auction Preferred as to
the payment of dividends ("Parity Preferred"), to elect a number
of directors of the Corporation (the "Regular Preferred
Directors") which is equal to the smallest whole number that is
not less than 25% of the directors of the Corporation. Holders
of all such stock shall vote in such elections on the basis of
one vote per $100,000 liquidation preference and not cumulatively
and the holder or holders of one-third of the shares of such
stock then Outstanding, present in person or by proxy, shall
constitute a quorum for the election of directors by them.
(b) Other Matters. On all matters other than the election
of directors as to which stockholders generally have a vote, each
share of Auction Preferred and Voting Preferred shall be entitled
to such number of votes as determined below and each share of
Common Stock will be entitled to one vote. The shares of Auction
Preferred shall vote together as a single class with all shares
of Common Stock and all other shares of preferred stock,
including the Flexible Rate Auction Preferred Stock, the Series A
Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock and the Series D Preferred, which have all the
same voting rights as conferred upon the Auction Preferred in
Section 5(a) and this Section 5(b) (the "Voting Preferred").
Holders of shares of Auction Preferred and Voting Preferred shall
be entitled to the number of votes determined pursuant to the
following formula per $100,000 liquidation preference:
X = [(Y divided by .75) minus Y] divided by Z
X: number of votes per share of Auction Preferred and Voting
Preferred per $100,000 liquidation preference.
Y: number of shares of outstanding Common Stock on the
applicable record date.
Z: amount equal to (I) number of shares of Outstanding
Auction Preferred on the applicable record date plus (II) sum
of the liquidation preference of all Outstanding Voting
Preferred on the applicable record date divided by 100,000.
The Corporation shall mail or cause the Auction Agent to mail to
Holders of shares of Auction Preferred notice of any meeting of
stockholders not less than 20 days nor more than 60 days prior to
the date fixed for such meeting. Except as provided in Section
5(c), the number of directors of the Corporation shall be
determined in accordance with the By-Laws of the Corporation.
(c) Right to Elect Two Additional Members of the Board of
Directors. (i) During any period (referred to herein as a
"Default Period") when dividend payments on any shares of Auction
Preferred or Parity Preferred for such number of Dividend Periods
or portions thereof (or the equivalent thereof in the case of
Parity Preferred), which in the aggregate contain at least 540
days, shall not have been paid or declared and a sum sufficient
for the payment thereof set aside for payment, then in any such
case the number of directors of the Corporation shall
automatically be increased by two additional directors and the
holders of the shares of Auction Preferred and Parity Preferred
shall possess full voting powers (to the exclusion of the holders
of all other series and classes of capital stock of the
Corporation), voting as a single class, to elect such two
directors (the "Special Preferred Directors").
(ii) The Default Period and voting rights created by the
occurrence of the circumstances described in Section 5(c)(i)
shall continue unless and until all accumulated and unpaid
dividends on any of the then Outstanding shares of Auction
Preferred and Parity Preferred, including in the case of Auction
Preferred the accumulated and unpaid dividends for the current
Dividend Period or Dividend Quarter, as the case may be, shall
have been paid or sufficient funds for the payment thereof shall
have been deposited with the Auction Agent, at which time the
voting rights described in Section 5(c)(i) shall cease, subject
always, however, to the revesting of such voting power in the
holders of all shares of Auction Preferred and Parity Preferred
upon the further occurrence of any of the circumstances described
in Section 5(c)(i) above.
(iii) The term of office of all persons who are directors
of the Corporation at the time of the special meeting referred to
in Section 5(c)(v) below shall continue, notwithstanding the
election of Special Preferred Directors at such meeting by the
holders of shares of Auction Preferred and Parity Preferred. The
Regular Preferred Directors and the Special Preferred Directors,
together with the incumbent directors elected by the holders of
the Common Stock, shall constitute the duly elected directors of
the Corporation.
(iv) Simultaneously with the expiration of the Default
Period, the term of office of the Special Preferred Directors
elected by the holders of shares of Auction Preferred and Parity
Preferred at the special meeting referred to in Section 5(c)(v)
below shall terminate, the number of directors of the Corporation
shall automatically be decreased by two, only the Regular
Preferred Directors and the incumbent directors otherwise elected
by the holders of the Common Stock shall constitute the duly
elected directors of the Corporation, and the right of the
holders of Auction Preferred and Parity Preferred to elect
directors during a Default Period as provided above shall cease.
(v) Within five days following the accrual of any right of
the holders of shares of Auction Preferred and Parity Preferred
to elect directors upon the occurrence of a Default Period as
described in Section 5(c)(i), the Corporation shall mail or cause
to be mailed to the holders of Auction Preferred and Parity
Preferred notice of a special meeting of stockholders for a date
not less than 20 days nor more than 60 days after the date of
such notice. If the Corporation does not mail or cause to be
mailed notice of such meeting as provided in the next preceding
sentence, a meeting may be called by any holder of Auction
Preferred or Parity Preferred. The Corporation shall notify the
Auction Agent of the date on which such right accrued, and such
date shall be the record date for determining the holders of
stock entitled to notice of and to vote at the special meeting.
Holders of all such stock shall vote in such elections on the
basis of one vote per $100,000 liquidation preference and not
cumulatively and the holder or holders of one-third of the shares
of such stock then Outstanding, present in person or by proxy,
shall constitute a quorum for the election of directors by them.
At any such meeting or adjournment thereof in the absence of a
quorum, a majority of the holders of such stock present in person
or by proxy shall have the power to adjourn the meeting for the
election of directors without notice, other than an announcement
at the meeting, until a quorum is present.
(d) Removal of Regular Preferred Directors and Special
Preferred Directors. Except as provided in Section 5(c)(iv),
Regular Preferred Directors and Special Preferred Directors shall
(subject to the provisions of any applicable law) be subject to
removal only by the vote of the holders of a majority of the
Outstanding shares of Auction Preferred, Voting Preferred and
Parity Preferred in the case of Regular Preferred Directors, and
the holders of a majority of the Outstanding shares of Auction
Preferred and Parity Preferred in the case of Special Preferred
Directors, in each case, voting together as a single class. Any
vacancy in the Board of Directors of the Corporation occurring by
reason of such removal or otherwise may be filled by vote of a
majority of the Outstanding shares of Auction Preferred, Voting
Preferred and Parity Preferred in respect of any Regular
Preferred Director and by a vote of a majority of the Outstanding
shares of Auction Preferred and Parity Preferred in respect of
any Special Preferred Director, in each case, voting together as
a single class, in person or by proxy at a special meeting of
stockholders called and held in accordance with the provisions
set forth above, and, if not so filled, such vacancy shall
(subject to the provisions of any applicable law) be filled by a
vote of a majority of the remaining Regular Preferred Directors
and any Special Preferred Directors.
(e) Right to Vote in Certain Events. (i) Without the
affirmative vote of the Holders of at least two-thirds of the
Outstanding shares of Auction Preferred voting in person or by
proxy at a special meeting for the purpose, or the unanimous
written consent of the Holders of the Outstanding shares of
Auction Preferred acting without such a meeting (subject to the
provisions of any applicable law), the Corporation may not amend,
alter or repeal any provisions of this Certificate of
Designations or the Certificate of Incorporation so as to affect
adversely the preferences, special rights or powers of the shares
of Auction Preferred. Any increase in the authorized number of
any series of capital stock ranking on a parity with the Auction
Preferred with respect to the payment of dividends or the
distribution of assets, or creation, authorization or issuance of
any securities convertible into, or warrants, options or similar
rights to purchase, acquire or receive, shares of such capital
stock or reclassification of any authorized capital stock of the
Corporation into any share ranking on a parity with the Auction
Preferred with respect to the payment of dividends or the
distribution of assets shall be deemed not to affect adversely
the preferences, special rights or powers of the shares of
Auction Preferred.
(ii) Without the affirmative vote of the holders of at
least two-thirds of the Outstanding shares of Auction Preferred
and Parity Preferred, voting together as a single class, in
person or by proxy at a special meeting for the purpose, or the
unanimous written consent of the Holders of the Outstanding
shares of Auction Preferred and Parity Preferred acting without
such a meeting (subject to the provisions of any applicable law),
the Corporation may not create, authorize or issue shares of any
class or series of capital stock ranking senior to the shares of
Auction Preferred and Parity Preferred with respect to the
payment of dividends or the distribution of assets, or create,
authorize or issue any securities convertible into, or warrants,
options or similar rights to purchase, acquire or receive, shares
of capital stock ranking senior to the shares of Auction
Preferred and Parity Preferred with respect to the payment of
dividends or the distribution of assets or reclassify any
authorized capital stock of the Corporation into any shares
ranking senior to the shares of Auction Preferred and Parity
Preferred with respect to the payment of dividends or the
distribution of assets.
(iii) Without the affirmative vote of the holders of a
majority of the Outstanding shares of Auction Preferred, Voting
Preferred and Parity Preferred, voting together as a single
class, in person or by proxy at a special meeting for the
purpose, or the unanimous written consent of the Holders of the
Outstanding shares of Auction Preferred, Voting Preferred and
Parity Preferred acting without such a meeting (subject to the
provisions of any applicable law), the Corporation may not sell,
lease or convey all or substantially all of the assets of the
Corporation, or consolidate or merge with or into any other
corporation unless, in the case of a consolidation or merger,
each holder of shares of Auction Preferred, Voting Preferred and
Parity Preferred shall receive, upon such consolidation or
merger, an amount in cash equal to the liquidation preference,
Merger Premium, if any, and accumulated and unpaid dividends
through the date of payment of such shares of Auction Preferred,
Voting Preferred and Parity Preferred in exchange for such shares
of Auction Preferred, Voting Preferred and Parity Preferred.
(f) No Right to Vote in Certain Events. With respect to any
right of the holders of shares of Auction Preferred to vote on
any matter, whether such right is created by this Certificate of
Designations, by applicable law or otherwise, no Holder of any
share of Auction Preferred shall be entitled to vote and no share
of Auction Preferred shall be deemed to be Outstanding for the
purpose of voting or determining the number of shares required to
constitute a quorum, if prior to or concurrently with a
determination of shares entitled to vote or of shares deemed
Outstanding for quorum purposes, as the case may be,
such share is held beneficially or of record by the Corporation
or any Affiliate of the Corporation.
6. Exclusive Remedy. In the event that dividends are not
timely declared on the shares of Auction Preferred, the exclusive
remedy of Holders against the Corporation shall be as set forth
in this Certificate of Designations and in no event shall Holders
of such shares have any right to maintain a suit or proceeding
against the Corporation in respect of such dividends or damages
for the failure to receive the same or resulting from such
noncompliance.
7. Additional Agreements. (a) Term Selection Agent. The
Corporation shall use its best efforts to maintain a Term
Selection Agent with respect to Series L Preferred, Series M
Preferred and Series N Preferred to act in accordance with the
provisions set forth in this Certificate of Designations with
respect to each such Series.
(b) Auction Agent. The Corporation shall use its best
efforts to maintain an Auction Agent with respect to Series L
Preferred, Series M Preferred and Series N Preferred to act in
accordance with the provisions set forth in this Certificate of
Designations with respect to each such Series.
8. Auction Procedures. (a) Certain Definitions.
Capitalized terms not defined in this paragraph 8 shall have the
respective meanings specified in paragraphs 1 through 7 above of
this Certificate of Designations. As used in this paragraph 8,
the following terms shall have the following meanings, unless the
context otherwise requires:
(i) "Affiliate" shall mean any Person known to the Auction
Agent to be controlled by, in control of or under common control
with the Corporation and shall include, for purposes of this
paragraph, Ford Motor Company and its Affiliates other than the
Corporation.
(ii) "Agent Member" shall mean the member of the Securities
Depository that will act on behalf of a Bidder and is identified
as such in such Bidder's Purchaser's Letter.
(iii) "Auction" shall mean the periodic operation of the
procedures set forth in this paragraph 8.
(iv) "Auction Date" shall mean the Business Day next
preceding the first day of each Dividend Period for a Series
after the initial Dividend Period for such Series.
(v) "Auction Preferred" shall mean shares of a Series
subject to an Auction on any Auction Date.
(vi) "Available Auction Preferred" shall have the meaning
specified in paragraph 8(d)(i) below.
(vii) "Bid" shall have the meaning specified in paragraph
8(b)(i) below.
(viii) "Bidder" shall have the meaning specified in
paragraph 8(b)(i) below.
(ix) "Broker-Dealer" shall mean any broker-dealer, or other
entity permitted by law to perform the functions required of a
Broker-Dealer in this paragraph 8, that has been selected by the
Corporation and has entered into a Broker-Dealer Agreement with
the Auction Agent that remains effective.
(x) "Broker-Dealer Agreement" shall mean an agreement
between the Auction Agent and a Broker-Dealer pursuant to which
such Broker-Dealer agrees to follow the procedures specified in
this paragraph 8.
(xi) "Existing Holder" when used with respect to shares of
Auction Preferred, shall mean a Person who has signed a
Purchaser's Letter and is listed as the beneficial owner of such
shares of Auction Preferred in the records of the Auction Agent.
(xii) "Hold Order" shall have the meaning specified in
paragraph 8(b)(i) below.
(xiii) "Order" shall have the meaning specified in
paragraph 8(b)(i) below.
(xiv) "Outstanding" shall mean, as of any date, shares of
Auction Preferred theretofore issued by the Corporation except,
without duplication, (A) any shares of Auction Preferred
theretofore cancelled or delivered to the Auction Agent for
cancellation, (B) any shares of Auction Preferred as to which the
Corporation or any Affiliate thereof shall be an Existing Holder
and (C) any shares of Auction Preferred represented by any
certificate in lieu of which a new certificate has been executed
and delivered by the Corporation.
(xv) "Person" shall mean and include an individual, a
partnership, a corporation, a trust, an unincorporated
association, a joint venture or other entity or a government or
any agency or political subdivision thereof.
(xvi) "Potential Holder" shall mean any Person, including
any Existing Holder, (A) who shall have executed a Purchaser's
Letter and (B) who may be interested in acquiring shares of
Auction Preferred (or, in the case of an Existing Holder,
additional shares of Auction Preferred).
(xvii) "Purchaser's Letter" shall mean a letter addressed
to the Corporation, the Auction Agent and a Broker-Dealer in
which a Person agrees, among other things, to offer to purchase,
purchase, offer to sell and/or sell shares of Auction Preferred
as set forth in this paragraph 8.
(xviii) "Securities Depository" shall mean The Depository
Trust Company and its successors and assigns or any other
securities depository selected by the Corporation which agrees to
follow the procedures required to be followed by such securities
depository in connection with shares of Auction Preferred.
(xix) "Sell Order" shall have the meaning specified in
paragraph 8(b)(i) below.
(xx) "shares," for the purposes of this paragraph 8, shall
mean shares of Auction Preferred.
(xxi) "Submission Deadline" shall mean 12:30 p.m., New York
City time, on any Auction Date or such other time on any Auction
Date by which Broker-Dealers are required to submit Orders to the
Auction Agent as specified by the Auction Agent from time to
time.
(xxii) "Submitted Bid" shall have the meaning specified in
paragraph 8(d)(i) below.
(xxiii) "Submitted Hold Order" shall have the meaning
specified in paragraph 8(d)(i) below.
(xxiv) "Submitted Order" shall have the meaning specified
in paragraph 8(d)(i) below.
(xxv) "Submitted Sell Order" shall have the meaning
specified in paragraph 8(d)(i) below.
(xxvi) "Sufficient Clearing Bids" shall have the meaning
specified in paragraph 8(d)(i) below.
(xxvii) "Winning Bid Rate" shall have the meaning specified
in paragraph 8(d)(i) below.
(b) Orders by Existing Holders and Potential Holders.
(i) On or prior to each Auction Date:
(A) each Existing Holder may submit to a Broker-Dealer
information as to:
(1) the number of Outstanding shares, if any, of
Auction Preferred held by such Existing Holder which such
Existing Holder desires to continue to hold without regard to the
Applicable Rate for the next succeeding Dividend Period;
(2) the number of Outstanding shares, if any, of
Auction Preferred that such Existing Holder desires to continue
to hold, provided that the Applicable Rate for the next
succeeding Dividend Period shall not be less than the rate per
annum specified by such Existing Holder; and/or
(3) the number of Outstanding shares, if any, of
Auction Preferred held by such Existing Holder which such
Existing Holder offers to sell without regard to the Applicable
Rate for the next succeeding Dividend Period; and
(B) each Broker-Dealer, using a list of
Potential Holders that shall be maintained by such Broker-Dealer
in good faith for the purpose of conducting a competitive
Auction, shall contact Potential Holders, including Persons that
are not Existing Holders, on such list to determine the number of
shares, if any, of Auction Preferred that each such Potential
Holder offers to purchase, provided that the Applicable Rate for
the next succeeding Dividend Period shall not be less than the
rate per annum specified by such Potential Holder.
For the purposes hereof, the communication to a
Broker-Dealer of the information referred to in this paragraph
8(b)(i) is hereinafter referred to as an "Order" and each
Existing Holder and each Potential Holder placing an Order is
hereinafter referred to as a "Bidder"; an Order containing the
information referred to in clause (A)(1) of this paragraph
8(b)(i) is hereinafter referred to as a "Hold Order"; an Order
containing the information referred to in clause (A)(2) or (B) of
this paragraph 8(b)(i) is hereinafter referred to as a
"Bid"; and an Order containing the information referred to in
clause (A)(3) of this paragraph 8(b)(i) is hereinafter referred
to as a "Sell Order."
(ii) (A) A Bid by an Existing Holder shall constitute an
irrevocable offer to sell:
(1) the number of Outstanding shares of Auction
Preferred specified in such Bid if the Applicable Rate determined
on such Auction Date shall be less than such specified rate; or
(2) such number or a lesser number of Outstanding
shares of Auction Preferred to be determined as set forth in
paragraph 8(e)(i)(D) if the Applicable Rate determined on such
Auction Date shall be equal to such specified rate; or
(3) such number or a lesser number of Outstanding
shares of Auction Preferred to be determined as set forth in
paragraph 8(e)(ii)(C) if such specified rate shall be higher than
the Maximum Applicable Rate and Sufficient Clearing Bids do not
exist.
(B) A Sell Order by an Existing Holder shall constitute an
irrevocable offer to sell:
(1) the number of Outstanding shares of Auction
Preferred specified in such Sell Order; or
(2) such number or a lesser number of Outstanding
shares of Auction Preferred as set forth in paragraph 8(e)(ii)(C)
if Sufficient Clearing Bids do not exist.
(C) A Bid by a Potential Holder shall constitute an
irrevocable offer to purchase:
(1) the number of Outstanding shares of Auction
Preferred specified in such Bid if the Applicable Rate determined
on such Auction Date shall be higher than such specified rate; or
(2) such number or a lesser number of Outstanding
shares of Auction Preferred as set forth in paragraph 8(e)(i)(E)
if the Applicable Rate determined on such Auction Date shall be
equal to such specified rate.
(c) Submission of Orders by Broker-Dealers to Auction
Agent.
(i) Each Broker-Dealer shall submit in writing to the
Auction Agent prior to the Submission Deadline on each Auction
Date all Orders obtained by such Broker-Dealer and specifying
with respect to each Order:
(A) the name of the Bidder placing such Order;
(B) the aggregate number of shares of Auction Preferred
that are the subject of such Order;
(C) to the extent that such Bidder is an Existing Holder:
(1) the number of shares, if any, of Auction
Preferred subject to any Hold Order placed by such Existing
Holder;
(2) the number of shares, if any, of Auction
Preferred subject to any Bid placed by such Existing Holder and
the rate specified in such Bid; and
(3) the number of shares, if any, of Auction
Preferred subject to any Sell Order placed by such Existing
Holder; and
(D) to the extent that such Bidder is a Potential Holder,
the rate and the number of shares of Auction Preferred specified
in such Potential Holder's Bid.
(ii) If any rate specified in any Bid contains more than
three figures to the right of the decimal point, the Auction
Agent shall round such rate up to the next highest one thousandth
(.001) of 1%.
(iii) If an Order or Orders covering all of the Outstanding
shares of Auction Preferred held by an Existing Holder is not
submitted to the Auction Agent prior to the Submission Deadline,
the Auction Agent shall deem a Hold Order to have been submitted
on behalf of such Existing Holder covering the number of
Outstanding shares of Auction Preferred held by such Existing
Holder and not subject to Orders submitted to the Auction Agent.
(iv) If one or more Orders covering in the aggregate more
than the number of Outstanding shares of Auction Preferred held
by the Existing Holder are submitted to the Auction Agent, such
Orders shall be considered valid as follows and in the following
order of priority:
(A) any Hold Order submitted on behalf of such Existing
Holder shall be considered valid up to and including the number
of Outstanding shares of Auction Preferred held by such Existing
Holder; provided that if more than one Hold Order is submitted on
behalf of such Existing Holder and the number of shares of
Auction Preferred subject to such Hold Orders exceeds the number
of Outstanding shares of Auction Preferred held by such Existing
Holder, the number of shares of Auction Preferred subject to such
Hold Orders shall be reduced pro rata so that such Hold Orders
shall cover the number of Outstanding shares of Auction Preferred
held by such Existing Holder.
(B)(1) any Bid shall be considered valid up to and
including the excess of the number of Outstanding shares of
Auction Preferred held by such Existing Holder over the number of
shares of Auction Preferred subject to Hold Orders referred to in
paragraph 8(c)(iv)(A);
(2) subject to clause (1) above, if more than one Bid with
the same rate is submitted on behalf of such Existing Holder and
the number of Outstanding shares of Auction Preferred subject to
such Bids is greater than such excess, the number of shares of
Auction Preferred subject to such Bids shall be reduced pro rata
so that such Bids shall cover the number of shares of Auction
Preferred equal to such excess; and
(3) subject to clause (1) above, if more than one Bid with
different rates is submitted on behalf of such Existing Holder,
such Bids shall be considered valid in the ascending order of
their respective rates and in any such event the number, if any,
of such Outstanding shares subject to Bids not valid under this
clause (B) shall be treated as the subject of a Bid by a
Potential Holder; and
(C)(1) any Sell Order shall be considered valid up to and
including the excess of the number of Outstanding shares of
Auction Preferred held by such Existing Holder over the number of
shares of Auction Preferred subject to Hold Orders referred to in
paragraph 8(c)(iv)(A) and Bids referred to in paragraph
8(c)(iv)(B); and
(2) subject to clause (1) above, if more than one Sell
Order is submitted on behalf of such Existing Holder and the
number of Outstanding shares of Auction Preferred subject to such
Sell Orders is greater than such excess, the number of shares of
Auction Preferred subject to such Sell Orders shall be reduced
pro rata so that such Sell Orders shall cover the number of
shares of Auction Preferred equal to such excess.
(v) If more than one Bid is submitted on behalf of any
Potential Holder, each bid submitted shall be a separate Bid with
the rate and number of shares of Auction Preferred therein
specified.
(d) Determination of Sufficient Clearing Bids, Winning Bid
Rate and Applicable Rate.
(i) Not earlier than the Submission Deadline on each
Auction Date, the Auction Agent shall assemble all Orders
submitted or deemed submitted to it by the Broker-Dealers (each
such Order as submitted or deemed submitted by a Broker-Dealer
being hereinafter referred to individually as a "Submitted Hold
Order," a "Submitted Bid" or a "Submitted Sell Order," as the
case may be, or as a "Submitted Order") and shall determine:
(A) the excess of the total number of Outstanding shares of
Auction Preferred over the number of Outstanding shares of
Auction Preferred that are the subject of Submitted Hold Orders
(such excess being hereinafter referred to as the "Available
Auction Preferred");
(B) from the Submitted Orders whether:
(1) the number of Outstanding shares of Auction Preferred
that are the subject of Submitted Bids by Potential Holders
specifying one or more rates equal to or lower than the Maximum
Applicable Rate exceeds or is equal to the sum of:
(2)(x) the number of Outstanding shares of Auction
Preferred that are the subject of Submitted Bids by Existing
Holders specifying one or more rates higher than the Maximum
Applicable Rate; and
(y) the number of Outstanding shares of Auction
Preferred that are subject to Submitted Sell Orders
(if such excess or such equality exists (other than because
the number of shares of Auction Preferred in clauses (x) and (y)
are each zero because all of the Outstanding shares of Auction
Preferred are the subject of Submitted Hold Orders), such
Submitted Bids in clause (1) are hereinafter referred to
collectively as "Sufficient Clearing Bids"); and
(C) if Sufficient Clearing Bids exist, the lowest rate
specified in the Submitted Bids (the "Winning Bid Rate") which if
the Auction Agent accepted:
(1) each Submitted Bid from Existing Holders specifying
such lowest rate and all other Submitted Bids from Existing
Holders specifying lower rates, and
(2) each Submitted Bid from Potential Holders specifying
such lowest rate and all other Submitted Bids from Potential
Holders specifying lower rates;
would result in such Existing Holders continuing to hold an
aggregate number of Outstanding shares of Auction Preferred that,
when added to the number of Outstanding shares of Auction
Preferred to be purchased by such Potential Holders, would equal
not less than the Available Auction Preferred.
(ii) Promptly after the Auction Agent has made the
determinations pursuant to paragraph 8(d)(i), the Auction Agent
shall advise the Corporation of the Maximum Applicable Rate and,
based on such determinations, the Applicable Rate for the next
succeeding Dividend Period as follows:
(A) if Sufficient Clearing Bids exist, that the Applicable
Rate for the next succeeding Dividend Period shall be equal to
Winning Bid Rate so determined;
(B) if Sufficient Clearing Bids do not exist (other than
because all of the Outstanding shares of Auction Preferred are
the subject of Submitted Hold Orders), then (a) if the Term
Selection Agent has not given a Notice of Long-Term Dividend
Period with respect to the next succeeding Dividend Period for a
Series or has given a Notice of Revocation with respect thereto
or such Notice of Long-Term Dividend Period shall be deemed to
have been revoked, the Applicable Rate for such Series for such
next succeeding Dividend Period shall be the Maximum Applicable
Rate on the Auction Date for a Short-Term Dividend Period and (b)
if the Term Selection Agent has given a Notice of Long-Term
Dividend Period with respect to the next succeeding Dividend
Period for a Series and has not given a Notice of Revocation with
respect thereto and such Notice of Long-Term Dividend Period
shall not have been deemed revoked, such next succeeding Dividend
Period shall, notwithstanding such Notice of Long-Term Dividend
Period, be a Short-Term Dividend Period, and the Applicable Rate
for such next succeeding Dividend Period shall be the greatest of
(i) the Applicable Rate in effect immediately prior to the
applicable Auction, (ii) the Maximum Applicable Rate on the
Auction Date for a Short-Term Dividend Period or (iii) the
Maximum Applicable Rate on the Auction Date for the specified
Long-Term Dividend Period; or
(C) if all the Outstanding shares of Auction Preferred are
the subject of Submitted Hold Orders, that the Applicable Rate
for the next succeeding Dividend Period shall (1) in the case of
a Series of Auction Preferred with a Short-Term Dividend Period,
be equal to 59% of the 60-day "AA" Composite Commercial Paper
Rate in effect on the date of such Auction; and (2) in the case
of a Series of Auction
Preferred with a Long-Term Dividend Period, 59% of the Reference
Rate in effect on the date of such Auction.
(e) Acceptance and Rejection of Submitted Bids and
Submitted Sell Orders and Allocation of Shares. Existing Holders
shall continue to hold shares of Auction Preferred that are the
subject of Submitted Hold Orders and, based on the
determinations made pursuant to paragraph 8(d)(i), the Submitted
Bids and the Submitted Sell Orders shall be accepted or rejected
and the Auction Agent shall take such other action as set forth
below:
(i) If Sufficient Clearing Bids have been made, subject to
the provisions of paragraph 8(e)(iii), Submitted Bids and
Submitted Sell Orders shall be accepted or rejected in the
following order of priority and all other Submitted Bids shall be
rejected:
(A) the Submitted Sell Orders of Existing Holders shall
be accepted and the Submitted Bid of each of the Existing Holders
specifying any rate that is higher than the Winning Bid Rate
shall be accepted, thus requiring each such Existing Holder to
sell the shares of Auction Preferred that are the subject of such
Submitted Bid;
(B) the Submitted Bid of each of the Existing Holders
specifying any rate that is lower than the Winning Bid Rate shall
be rejected, thus entitling each such Existing Holder to continue
to hold the shares of Auction Preferred that are the subject of
such Submitted Bid;
(C) the Submitted Bid of each of the Potential Holders
specifying any rate that is lower than the Winning Bid Rate shall
be accepted;
(D) the Submitted Bid of each of the Existing Holders
specifying a rate that is equal to the Winning Bid Rate shall be
rejected, thus entitling each such Existing Holder to continue to
hold the shares of Auction Preferred that are the subject of such
Submitted Bid, unless the number of Outstanding shares of Auction
Preferred subject to all such Submitted Bids shall be greater
than the number of shares of Auction Preferred ("remaining
shares") equal to the excess of the Available Auction Preferred
over the number of shares of Auction Preferred subject to
Submitted Bids described in paragraphs 8(e)(i)(B) and 8(e)(i)(C),
in which event the Submitted Bids of each such Existing Holder
shall be accepted, and each such Existing Holder shall be
required to sell shares of Auction Preferred, but only in an
amount equal to the difference between (1) the number of
Outstanding shares of Auction Preferred then held by such
Existing Holder subject to such Submitted Bid and (2) the number
of shares of Auction Preferred obtained by multiplying (x) the
number of remaining shares by (y) a fraction the numerator of
which shall be the number of Outstanding shares of Auction
Preferred held by such Existing Holder subject to such Submitted
Bid and the denominator of which shall be the sum of the number
of Outstanding shares of Auction Preferred subject to such
Submitted Bids made by all such Existing Holders that specified a
rate equal to the Winning Bid Rate; and
(E) the Submitted Bid of each of the Potential
Holders specifying a rate that is equal to the Winning Bid Rate
shall be accepted but only in an amount equal to the number of
shares of Auction Preferred obtained by multiplying the
difference between the Available Auction Preferred and the number
of shares of Auction Preferred subject to Submitted Bids
described in paragraphs 8(e)(i)(B), 8(e)(i)(C) and 8(e)(i)(D) by
a fraction the numerator of which shall be the number of
Outstanding shares of Auction Preferred subject to such Submitted
Bids and the denominator of which shall be the sum of the number
of Outstanding shares of Auction Preferred subject to such
Submitted Bids made by all such Potential Holders that specified
rates equal to the Winning Bid Rate.
(ii) If Sufficient Clearing Bids have not been made (other
than because all of the Outstanding shares of Auction Preferred
are subject to Submitted Hold Orders), subject to the provisions
of paragraph 8(e)(iii), Submitted Orders shall be accepted or
rejected as follows in the following order of priority and all
other Submitted Bids shall be rejected:
(A) the Submitted Bid of each Existing Holder
specifying any rate that is equal to or lower than the Maximum
Applicable Rate shall be rejected, thus entitling such Existing
Holder to continue to hold the shares of Auction Preferred that
are the subject of such Submitted Bid;
(B) the Submitted Bid of each Potential Holder
specifying any rate that is equal to or lower than the Maximum
Applicable Rate shall be accepted, thus requiring such Potential
Holder to purchase the shares of Auction Preferred that are the
subject of such Submitted Bid; and
(C) the Submitted Bids of each Existing Holder
specifying any rate that is higher than the Maximum Applicable
Rate shall be accepted and the Submitted Sell Orders of each
Existing Holder shall be accepted, in both cases only in an
amount equal to the difference between (1) the number of
Outstanding shares of Auction Preferred then held by such
Existing Holder subject to such Submitted Bid or Submitted Sell
Order and (2) the number of shares of Auction Preferred obtained
by multiplying (x) the difference between the Available Auction
Preferred and the aggregate number of shares of Auction Preferred
subject to Submitted Bids described in paragraphs 8(e)(ii)(A) and
8(e)(ii)(B) by (y) a fraction the numerator of which shall be the
number of Outstanding shares of Auction Preferred held by such
Existing Holder subject to such Submitted Bid or Submitted Sell
Order and the denominator of which shall be the number of
Outstanding shares of Auction Preferred subject to all such
Submitted Bids and Submitted Sell Orders.
(iii) If, as a result of the procedures described in
paragraph 8(e)(i) or 8(e)(ii), any Existing Holder would be
entitled or required to sell, or any Potential Holder would be
entitled or required to purchase, a fraction of a share of
Auction Preferred on any Auction Date, the Auction Agent shall,
in such manner as, in its sole discretion, it shall determine,
round up or down the number of shares of Auction Preferred to be
purchased or sold by any Existing Holder or Potential Holder on
such Auction Date so that the number of shares purchased or sold
by each Existing Holder or Potential Holder on such Auction Date
shall be whole shares of Auction Preferred.
(iv) Based on the results of each Auction, the Auction
Agent shall determine the aggregate number of shares of Auction
Preferred to be purchased and the aggregate number of shares of
Auction Preferred to be sold by Potential Holders and Existing
Holders on whose behalf each Broker-Dealer submitted Bids or Sell
Orders, and, with respect to each Broker-Dealer, to the extent
that such aggregate number of shares to be purchased and such
aggregate number of shares to be sold differ, determine to which
other Broker-Dealer or Broker-Dealers acting for one or more
purchasers such Broker-Dealer shall deliver, or from which other
Broker-Dealer or Broker-Dealers acting for one or more sellers
such Broker-Dealer shall receive, as the case may be, shares of
Auction Preferred.
(f) Miscellaneous. The Board of Directors of the
Corporation may interpret the provisions of this paragraph 8 to
resolve any inconsistency or ambiguity, remedy any formal defect
or make any other change or modification which does not adversely
affect the rights of Existing Holders of Auction Preferred. An
Existing Holder (A) may sell, transfer or otherwise dispose of
shares of Auction Preferred only pursuant to a Bid or Sell Order
in accordance with the procedures described in this paragraph 8
or to or through a Broker-Dealer or to a Person that has
delivered a signed copy of a Purchaser's Letter to the Auction
Agent, provided that in the case of all transfers other than
pursuant to Auctions such Existing Holder, its Broker-Dealer or
its Agent Member advises the Auction Agent of such transfer and
(B) shall have the beneficial ownership of the shares of Auction
Preferred held by it maintained in book-entry form by the
Securities Depository in the account of its Agent Member, which
in turn shall maintain records of such Existing Holder's
beneficial ownership. The Corporation and its Affiliates shall
not submit any Order in any Auction except as set forth in the
next sentence. Any Broker-Dealer that is an affiliate of the
Corporation may submit Orders in Auctions but only if such Orders
are not for its own account, except that if such affiliated
Broker-Dealer holds shares of Auction Preferred for its own
account, it must submit a Sell Order in the next Auction with
respect to such shares of Auction Preferred.
(g) Headings of Subdivisions. The headings of the various
subdivisions of this paragraph 8 are for convenience of reference
only and shall not affect the interpretation of any of the
provisions hereof.
IN WITNESS WHEREOF, FORD HOLDINGS, INC. has caused this
Certificate to be made under the seal of the Corporation and
signed by Malcolm S. Macdonald, its Vice President - Treasurer,
and attested by P. J. Sherry, Jr., its Assistant Secretary, this
20th day of December, 1994.
FORD HOLDINGS, INC.
By /s/ Malcolm S. Macdonald
--------------------------
Malcolm S. Macdonald
Vice President - Treasurer
(CORPORATE SEAL)
ATTEST:
By /s/ P. J. Sherry, Jr.
P. J. Sherry, Jr.
Assistant Secretary
<PAGE>
EXHIBIT C
Purchaser's Letter
Relating to Flexible Rate Auction Preferred Stock of
Ford Holdings, Inc.
Ford Holdings, Inc.
The Auction Agent
A Broker-Dealer
An Agent Member
Other Persons
Ladies and Gentlemen:
We may from time to time purchase, offer to purchase, offer
to sell and/or sell shares of one or more series of Flexible Rate
Auction Preferred Stock (Exchange) and/or Flexible Rate Auction
Preferred Stock (together, "Flex APS"), issued by Ford Holdings,
Inc. (the "Company"), as described in one or more prospectuses
and prospectus supplements relating to the Flex APS, including
the appendices thereto (the "Prospectus"). We agree that this
Letter shall apply to such purchases, sales and offers and to
shares of Flex APS owned by us. We understand that the dividend
rate for each series of Flex APS will generally be based on the
results of Auctions as set forth in the applicable Prospectus.
Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Prospectus.
We represent and agree as follows:
1. We agree that any Bid or Sell Order placed by us shall
constitute an irrevocable offer by us to purchase or sell the
shares of Flex APS subject to such Bid or Sell Order, or such
lesser number of shares of Flex APS as we shall be required to
sell or purchase as a result of such Auction, as set forth in the
Prospectus, and that, if we fail to place a Bid or Sell Order
with respect to shares of Flex APS owned by us with a
Broker-Dealer on any Auction Date for such shares or a
Broker-Dealer to which we communicate a Bid or Sell Order fails
to submit such Bid or Sell Order to the Auction Agent, we shall
be deemed to have placed a Hold Order with respect to such shares
of Flex APS as described in the Prospectus. We authorize any
Broker-Dealer that submits a Bid or Sell Order as our agent in
Auctions to execute contracts for the sale of shares of Flex APS
covered by such Bid or Sell Order.
2. We agree that we will sell, transfer or otherwise dispose
of any shares of Flex APS held by us from time to time only (i)
to the Company or (ii) pursuant to a Bid or Sell Order placed in
an Auction or (iii) to or through a Broker-Dealer or (iv) to a
person who has signed and delivered a Purchaser's Letter in the
form of this Letter for such series to the Auction Agent,
provided that in the case of all dispositions other than pursuant
to Auctions, we, our Broker-Dealer or our Agent Member of the
Securities Depository shall advise the Auction Agent of such disposition.
3. We agree that ownership of shares of Flex APS shall be
represented by a global certificate registered in the name of the
Securities Depository or its nominee, that we will not be
entitled to receive any certificate representing shares of Flex
APS and that our ownership of any shares of Flex APS will be
maintained in book entry form by the Securities Depository for
the account of our Agent Member, which in turn will maintain
records of our beneficial ownership. We authorize and instruct
our Agent Member to disclose to the Auction Agent such
information concerning our beneficial ownership of shares of Flex
APS as the Auction Agent shall request.
4. Our Agent Member of the Securities Depository, now The
Depository Trust Company, currently is
________________________________________________.
5. We understand that a restrictive legend will be placed on
certificates for the shares of Flex APS reflecting the
restriction in paragraph 3 of this Letter.
6. Our personnel authorized to place Orders with
Broker-Dealers for the purposes set forth in the Prospectus in
Auctions currently is/are ____________________, telephone number
( ) ____________________.
7. Our taxpayer identification number is
______________________________.
8. This Letter is not a commitment by us to purchase any
shares of Flex APS.
9. The descriptions of Auction Procedures set forth in
Appendix A to the Prospectus are incorporated by reference herein
and, in case of any conflict between this Letter and any such
description, such description shall control.
10. This Letter supersedes any version of this Letter
delivered by us with respect to the Flex APS and dated earlier
than the date hereof.
Dated:
(Name of Purchaser)
By:
---------------------
Printed Name:
Title:
Mailing Address of Purchaser:
<PAGE>
EXHIBIT D
SETTLEMENT PROCEDURES
The following summary of Settlement Procedures sets forth
the procedures expected to be followed in connection with the
settlement of each Auction and will be incorporated by reference
in the Auction Agent Agreement and each Broker-Dealer Agreement.
Nothing contained in this Appendix A constitutes a representation
by the Company that in each Auction each party referred to herein
will actually perform the procedures described herein to be
performed by such party. Capitalized terms used herein shall have
the respective meanings specified in the forepart of this
Prospectus Supplement or Appendix B hereto, as the case may be.
(a) On each Auction Date, the Auction Agent shall notify by
telephone the Broker-Dealers that participated in the Auction
held on such Auction Date and submitted an Order on behalf of any
Existing Holder or Potential Holder of:
(i) the Applicable Rate fixed for the next succeeding
Dividend Period;
(ii) whether Sufficient Clearing Bids existed for the
determination of the Applicable Rate;
(iii) if such Broker-Dealer (a "Seller's Broker-Dealer")
submitted a Bid or a Sell Order on behalf of an Existing Holder,
the number of shares, if any, of New Auction Preferred Stock then
outstanding to be held or sold by such Existing Holder;
(iv) if such Broker-Dealer (a "Buyer's Broker-Dealer")
submitted a Bid on behalf of a Potential Holder, the number of
shares, if any, of New Auction Preferred Stock to be purchased by
such Potential Holder;
(v) if the aggregate number of shares of New Auction
Preferred Stock to be sold by all Existing Holders on whose
behalf such Broker-Dealer submitted a Bid or a Sell Order exceeds
the aggregate number of shares of New Auction Preferred Stock to
be purchased by all Potential Holders on whose behalf such
Broker-Dealer submitted a Bid, the name or names of one or more
Buyer's Broker-Dealers (and the Agent Member, if any, of each
such Buyer's Broker-Dealer) acting for one or more purchasers of
such excess number of shares of New Auction Preferred Stock and
the number of such shares to be purchased from one or more
Existing Holders on whose behalf such Broker-Dealer acted by one
or more Potential Holders on whose behalf each of such Buyer's
Broker-Dealer acted;
(vi) if the aggregate number of shares of New Auction
Preferred Stock to be purchased by all Potential Holders on whose
behalf such Broker-Dealer submitted a Bid exceeds the aggregate
number of shares of New Auction Preferred Stock to be sold by all
Existing Holders on whose behalf such Broker-Dealer submitted a
Bid or a Sell Order, the name or names of one or more Seller's
Broker-Dealers (and the name of the Agent Member, if any, of each
such Seller's Broker-Dealer) acting for one or more sellers of
such excess number of shares of New Auction Preferred Stock and
the number of such shares to be sold to one or more Potential
Holders on whose behalf such Broker-Dealer acted by one or more
Existing Holders on whose behalf each of such Seller's
Broker-Dealer acted; and
(vii) the Auction Date of the next succeeding Auction.
(b) On each Auction Date, each Broker-Dealer that submitted
an Order on behalf of any Existing Holder or Potential Holder
shall:
(i) in the case of a Broker-Dealer that is a Buyer's
Broker-Dealer, instruct each Potential Holder on whose behalf
such Broker-Dealer submitted a Bid that was accepted, in whole or
in part, to instruct such Potential Holder's Agent Member to pay
to such Broker-Dealer (or its Agent Member) through the
Securities Depository the amount necessary to purchase the number
of shares of New Auction Preferred Stock to be purchased pursuant
to such Bid against receipt of such shares and advise such
Potential Holder of the Applicable Rate for the next succeeding
Dividend Period;
(ii) in the case of a Broker-Dealer that is a Seller's
Broker-Dealer, instruct each Existing Holder on whose behalf such
Broker-Dealer submitted a Sell Order that was accepted, in whole
or in part, or a Bid that was rejected, in whole or in part, to
instruct such Existing Holder's Agent Member to deliver to such
Broker-Dealer (or its Agent Member) through the Securities
Depository the number of shares of New Auction Preferred Stock to
be sold pursuant to such Order against payment therefor and
advise any such Existing Holder that will continue to hold shares
of New Auction Preferred Stock of the Applicable Rate for the
next succeeding Dividend Period;
(iii) advise each Existing Holder on whose behalf such
Broker-Dealer submitted a Hold Order of the Applicable Rate for
the next succeeding Dividend Period;
(iv) advise each Existing Holder on whose behalf such
Broker-Dealer submitted an Order of the Auction Date of the next
succeeding Auction; and
(v) advise each Potential Holder on whose behalf such
Broker-Dealer submitted a Bid that was accepted, in whole or in
part, of the Auction Date for the next succeeding Auction.
(c) On the basis of the information provided to it pursuant
to (a) above, each Broker-Dealer that submitted a Bid or a Sell
Order on behalf of a Potential Holder or an Existing Holder
shall, in such manner and at such time or times as in its sole
discretion it may determine, allocate any funds received by it
pursuant to (b)(i) above and any shares of New Auction Preferred
Stock received by it pursuant to (b)(ii) above among the
Potential Holders, if any, on which behalf such Broker-Dealer
submitted Bids, the Existing Holders, if any, on whose behalf
such Broker-Dealer submitted Bids that were rejected or Sell
Orders, and any Broker-Dealer or Broker-Dealers identified to it
by the Auction Agent pursuant to (a)(v) or (a)(vi) above.
(d) On each Auction Date,
(i) each Potential Holder and Existing Holder shall instruct
its Agent Member as provided in (b)(i) or (b)(ii) above, as the
case may be;
(ii) each Seller's Broker-Dealer which is not an Agent
Member of the Securities Depository shall instruct its Agent
Member to (A) pay through the Securities Depository to the Agent
Member of the Existing Holder delivering shares to such
Broker-Dealer pursuant to (b)(ii) above the amount necessary to
purchase such shares against receipt of such shares and (B)
deliver such shares through the Securities Depository to a
Buyer's Broker-Dealer (or its Agent Member) identified to such
Seller's Broker-Dealer pursuant to (a)(v) above against payment
therefor; and
(iii) each Buyer's Broker-Dealer which is not an Agent
Member of the Securities Depository shall instruct its Agent
Member to (A) pay through the Securities Depository to a Seller's
Broker-Dealer (or its Agent Member) identified pursuant to
(a)(vi) above the amount necessary to purchase the shares to be
purchased pursuant to (b)(i) above against receipt of such shares
and (B) deliver such shares through the Securities Depository to
the Agent Member of the purchaser thereof against payment
therefor.
(e) On the Business Day next succeeding the Auction Date,
(i) each Bidder's Agent Member referred to in (d)(i) above
shall instruct the Securities Depository to execute the
transactions described under (b)(i) or (b)(ii) above, and the
Securities Depository shall execute such transactions;
(ii) each Seller's Broker-Dealer or its Agent Member shall
instruct the Securities Depository to execute the transactions
described in (d)(ii) above, and the Securities Depository shall
execute such transactions; and
(iii) each Buyer's Broker-Dealer or its Agent Member shall
instruct the Securities Depository to execute the transactions
described in (d)(iii) above, and the Securities Depository shall
execute such transactions.
<PAGE>
EXHIBIT E
FORD HOLDINGS, INC.
NOTICE OF LONG-TERM DIVIDEND PERIOD
NOTICE IS HEREBY GIVEN that Bear, Stearns & Co. Inc.,
Goldman, Sachs & Co. and Lehman Brothers Inc., the Term Selection
Agents for the Flexible Rate Auction Preferred Stock--Series [L]
[M] [N] of Ford Holdings, Inc. (the "Company") have, after
considering the factors set forth in paragraph 3(b)(viii) of the
Certificate of Designations, determined that the Long-Term
Dividend Period established hereby provides the Company with the
most favorable financing alternative and have selected a
Long-Term Dividend Period of _____ days which commences on
and ends on as the term of
the next Dividend Period for its Flexible Rate Auction Preferred
Stock--Series [L] [M] [N] (the "Series"). [Paragraph 5(e)(iii)
of the Certificate of Designations provides that without the
affirmative vote of the holders of a majority of the Outstanding
shares of Auction Preferred, Voting Preferred and Parity
Preferred, voting together as a single class, in person or by
proxy at a special meeting for the purpose, or the unanimous
written consent of the holders of the Outstanding shares of
Auction Preferred, Voting Preferred and Parity Preferred acting
without such a meeting (subject to the provisions of any
applicable law), the Company may not sell, lease or convey all or
substantially all of the assets of the Company or consolidate or
merge with or into any other corporation unless, in the case of a
consolidation or merger, each holder of shares of Auction
Preferred, Voting Preferred and Parity Preferred shall receive,
upon such consolidation or merger, an amount in cash equal to the
liquidation preference, Merger Premium, if any is established by
the Term Selection Agents, and accumulated and unpaid dividends
through the date of payment for such shares of Auction Preferred,
Voting Preferred and Parity Preferred in exchange for such shares
of Auction Preferred, Voting Preferred and Parity Preferred. The
Term Selection Agents have determined that a Merger Premium of
____ per share has been established for the shares of the
Series.]
The next Auction Date for the Series is scheduled to occur
on , 19 .
Existing Holders are hereby advised that the Term Selection
Agents may revoke the notice given hereby by delivering a Notice
of Revocation to the Auction Agent by 12:00 noon, New York City
time, on the second business day prior to the next Auction Date
with respect to the Series.
<PAGE>
If the Term Selection Agents revoke this notice or if
Sufficient Clearing Bids with respect to the Series do not exist
on the Auction Date or a Failure to Deposit occurs on or prior to
such Auction Date, the next Dividend Period for the Series will
be a Short-Term Dividend Period.
TERM SELECTION AGENTS
Bear, Stearns & Co. Inc.
By
Title
---------------------------
Goldman, Sachs & Co.
Lehman Brothers Inc.
By
Title
Date: , 19
<PAGE>
EXHIBIT F
FORD HOLDINGS, INC.
NOTICE OF REVOCATION
NOTICE IS HEREBY GIVEN that Bear, Stearns & Co. Inc.,
Goldman, Sachs & Co. and Lehman Brothers Inc., the Term Selection
Agents for the Flexible Rate Auction Preferred Stock--Series [L]
[M] [N] (the "Series) of Ford Holdings, Inc. (the "Company") are
hereby revoking the Notice of Long-Term Dividend Period dated
________________, 19__ with respect to the Series and the next
Dividend Period for the Series shall be a Short-Term Dividend
Period of 49 days.
The Term Selection Agents have determined that because of
subsequent changes the factors referred to in paragraph
3(b)(viii) of the Certificate of Designations relating to the
Series, such Long-Term Dividend Period would not result in the
most favorable financing alternative for the Company.
TERM SELECTION AGENTS
Bear, Stearns & Co. Inc.
By
Title
--------------------------
Goldman, Sachs & Co.
Lehman Brothers Inc.
By
Title
Date: , 19
<PAGE>
EXHIBIT G
FORD HOLDINGS, INC.
NOTICE OF REMOVAL
NOTICE IS HEREBY GIVEN that the Term Selection Agents for
the Flexible Rate Auction Preferred Stock--Series [L] [M] [N]
(the "Series") of Ford Holdings, Inc. have been removed and the
Notice of Long-Term Dividend Period dated _________, 19__ with
respect to the Series is deemed to be revoked.
FORD HOLDINGS, INC.
By
Title
Date: , 19
<PAGE>
EXHIBIT H
FORD HOLDINGS, INC.
NOTICE OF CURE OF FAILURE TO DEPOSIT
NOTICE IS HEREBY GIVEN that Ford Holdings, Inc. (the
"Company") has cured the Failure to Deposit with respect to the
Company's Flexible Rate Auction Preferred Stock--Series [L] [M]
[N] (the "Series") that occurred on _________, 19__ by depositing
with the undersigned an amount equal to
[if the Failure to Deposit occurred prior to the beginning of a
Dividend Period and was cured by 12:00 noon, New York City time,
on the third Business Day next succeeding such Failure to
Deposit, insert--all accumulated and unpaid dividends on the
shares of the Series, including the full amount of any dividends
to be paid with respect to the Dividend Period with respect to
which such Failure to Deposit occurred, plus an amount computed
by multiplying (i) 200% of the 60-day 'AA' Composite Commercial
Paper Rate by (ii) a fraction, the numerator of which is the
number of days for which such Failure to Deposit remained uncured
(including the day the Failure to Deposit occurred and excluding
the day the Failure to Deposit was cured) and the denominator of
which is 360, and applying the rate obtained against the
aggregate liquidation preference of the shares of the Series
outstanding.]
[if the Failure to Deposit occurred prior to a Dividend Period
and was not cured by 12:00 noon, New York City time, on the third
Business Day next succeeding such Failure to Deposit, insert--all
accumulated and unpaid dividends on the shares of the Series,
including the full amount of any dividends to be paid with
respect to the Dividend Period with respect to which such Failure
to Deposit occurred and including the full amount of any
dividends to be paid with respect to each Dividend Period since
the Failure to Deposit occurred, calculated, in the case of
accumulated and unpaid dividends for Dividend Periods commencing
after the date such Failure to Deposit occurred, using an
Applicable Rate equal to 200% of LIBOR.]
[if the Failure to Deposit occurred during a Long-Term Dividend
Period, insert--all accumulated and unpaid dividends on the
shares of the Series, including (i) the full amount of any
dividends with respect to the Dividend Quarter with respect to
which such Failure to Deposit occurred, [and] (ii) the full
amount of any dividends to be paid with respect to each Dividend
Quarter since the Failure to Deposit occurred calculated at the
Applicable Rate for the Long Term Dividend Period, plus an
amount, as additional accumulated and unpaid dividends,
calculated by multiplying (x) 200% of LIBOR on the date on which
such Failure to Deposit occurred by (y) a fraction, the numerator
of which shall be the number of days (up to a maximum of the
total number of days remaining in the Long-Term Dividend Period)
for which such Failure to Deposit was not cured (including the
day the Failure to Deposit occurred and excluding, if applicable,
the day the Failure to Deposit was cured) and the denominator of
which shall be 360, and applying the rate obtained against
accumulated dividends not paid when due [if such Failure to
Deposit was not cured prior to the next succeeding Auction Date
for the Series, insert--and (iii) the full amount of any
dividends with respect to Dividend Periods commencing after the
next succeeding Auction Date for the shares of the Series,
calculated using an Applicable Rate equal to 200% of LIBOR].]
THE BANK OF NEW YORK,
as Auction Agent
By
Title
Date: , 19
<PAGE>
EXHIBIT I
FORD HOLDINGS, INC.
NOTICE OF SPECIAL MEETING OF HOLDERS
OF AUCTION PREFERRED STOCK
To Be Held On
NOTICE IS HEREBY given that a Special Meeting of Holders of
Flexible Rate Auction Preferred Stock--Series L, M and N
(collectively the "Auction Preferred") of FORD HOLDINGS, INC.
(the "Company") will be held at [address of the principal offices
of the Company] on at 10:00 a.m.,
time, for the purpose of electing
Directors of the Board of Directors of the Company pursuant to
paragraph 5(c) of the Certificate of Designations establishing
and creating the Auction Preferred to serve until the earlier of
(i) the next annual meeting of stockholders or (ii) such time as
all accumulated and unpaid dividends on the then outstanding
shares of each series of the Auction Preferred shall have been
paid or declared and set aside for payment. If, prior to the
date of the Special Meeting, the Company satisfies all the
requirements described in clause (ii) above, the Special Meeting
will be cancelled.
The record date for the Special Meeting is
. Only holders of record of the Auction
Preferred at the close of business on such date are entitled to
this notice and to vote at the Special Meeting or any adjournment
thereof.
FORD HOLDINGS, INC.
Date: ,
- --------------------------
1 The Company may select, at its option, any other location in
the continental United States.
2 Insert a date permitted by paragraph 5(c) of the Certificate
of Designations.
3. Insert appropriate time zone.
4. Insert the date that the right referred to in Paragraph
5(c)(i) of the Certificate of Designations accrued.
5. Insert date notice is given.
<PAGE>
AUCTION AGENT AGREEMENT
Between
FORD HOLDINGS, INC.
and
THE BANK OF NEW YORK
Dated as of December 22, 1994
Relating to
FLEXIBLE RATE AUCTION PREFERRED
STOCK--SERIES L, M and N
of
FORD HOLDINGS, INC.
46448/NYL2
EXHIBIT 4.5
TERM SELECTION AGENT AGREEMENT dated as of December 22, 1994
among FORD HOLDINGS, INC., a Delaware corporation (the
"Company"), BEAR, STEARNS & CO. INC., a Delaware corporation
("Bear Stearns"), GOLDMAN, SACHS & CO., a New York limited
partnership ("Goldman Sachs") and LEHMAN BROTHERS INC., a
Delaware corporation ("Lehman Brothers", each of Bear Stearns,
Goldman Sachs and Lehman Brothers a "Term Selection Agent" and
together, the "Term Selection Agents").
The Company proposes to issue 750 shares designated
"Flexible Rate Auction Preferred Stock--Series L" ("Series L"),
750 shares designated "Flexible Rate Auction Preferred
Stock--Series M" ("Series M") and 650 shares designated "Flexible
Rate Auction Preferred Stock--Series N" ("Series N" and,
collectively, the "Auction Preferred"), pursuant to its
Certificate of Designations relating to the shares of Auction
Preferred. The Company desires that the Term Selection Agents
perform certain duties in connection with each Series upon the
terms and conditions of this Agreement, and hereby appoints Bear
Stearns, Goldman Sachs and Lehman Brothers as the Term Selection
Agents to act in the capacities set forth in this Agreement.
NOW, THEREFORE, the Company, Bear Stearns, Goldman Sachs and
Lehman Brothers agree as follows:
SECTION 1. Definitions and Rules of Construction.
SECTION 1.1. Terms Defined by Reference to Certificate of
Designations. Capitalized terms not defined herein shall have
the meanings specified in the Certificate of Designations.
SECTION 1.2. Terms Defined Herein. As used herein, the
following terms shall have the following meanings, unless the
context otherwise requires:
(a) "Auction Agreement" means the Auction Agent Agreement
dated as of December 22, 1994, between the Company and the
Auction Agent.
(b) "Authorized Officer" means every partner, officer,
director or employee of each Term Selection Agent designated as
an "Authorized Officer" for purposes hereof in a notice to the
Company.
(c) "Company Officer" means the President, each Vice
President (whether or not designated by a number or word or words
added before or after the title "Vice President"), the Secretary,
the Treasurer, each Assistant Secretary and each Assistant
Treasurer of the Company and every other officer or employee of
the Company designated as a "Company Officer" for purposes hereof
in a notice to the Term Selection Agent.<PAGE>
2
(d) "Certificate of Designations" means the Certificate of
Designations of the Company relating to Series L, Series M and
Series N, as filed by the Company on December 21, 1994, in the
office of the Secretary of State of the State of Delaware, a copy
of which is attached to the Auction Agreement as Exhibit B.
SECTION 1.3. Rules of Construction. Unless the context or
use indicates another or different meaning or intent, the
following rules shall apply to the construction of this
Agreement:
(a) Words importing the singular number shall include the
plural number and vice versa.
(b) The captions and headings herein are solely for
convenience of reference and shall not constitute a part of this
Agreement nor shall they affect the meaning, construction or
effect of any provision of this Agreement.
(c) The words "hereof", "herein", "hereto" and other words
of similar import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall
be to New York City time.
SECTION 2. Term Selection. (a) The Company hereby
appoints Bear Stearns, Goldman Sachs and Lehman Brothers, and
Bear Stearns, Goldman Sachs and Lehman Brothers each hereby
accepts the appointment, as Term Selection Agents for the purpose
of establishing the length of Long-Term Dividend Periods with
respect to the Series L, Series M and Series N, in each case in
accordance with the provisions hereof and the Certificate of
Designations. Bear Stearns, Goldman Sachs and Lehman Brothers
hereby agree that they jointly will make any determination of a
Long-Term Dividend Period with respect to shares of a Series in
accordance with the Certificate of Designations and this
Agreement. In the event that Bear Stearns, Goldman Sachs and
Lehman Brothers are unable to agree, such designation or
determination will be as jointly agreed by any two of Bear
Stearns, Goldman Sachs and Lehman Brothers and, in the event that
any two of Bear Stearns, Goldman Sachs and Lehman Brothers cannot
so agree, such designation or determination will be made solely
by Bear Stearns.
(b)(i) The Term Selection Agents agree that they may
establish a Long-Term Dividend Period (including any Merger
Premium) for the shares of a Series of Auction Preferred, if they
determine that such Long-Term Dividend Period (including any
Merger Premium), in their sole opinion, provides the Company with
the most favorable financing alternative based upon the
following: (A) short-term and long-term market rates and indices
of such short-term and long-term rates, (B) the amounts,
<PAGE>
3
maturities and interest or dividend rates on the then outstanding
securities of the Company or its subsidiaries, (C) market supply
and demand for short-term and long-term securities, (D) yield
curves for short-term and long-term securities comparable to the
shares of Auction Preferred, (E) industry and financial
conditions which may affect the shares of Auction Preferred
including each Term Selection Agent's expectations with respect
thereto, (F) then current tax laws and administrative
interpretations with respect thereto, (G) the number of shares of
Auction Preferred and other auction rate preferred stock of the
Company Outstanding on the next Auction Date and (H) the number
of potential purchasers.
(ii) Each Long-Term Dividend Period for a series of Auction
Preferred designated by the Term Selection Agents shall end on
such day as specified by the Term Selection Agents; provided that
each Long-Term Dividend Period shall be longer than a Short-Term
Dividend Period (currently 49 days) and shall consist of a whole
number of weeks.
(c) The Term Selection Agents shall specify that the next
succeeding Dividend Period for such Series of Auction Preferred
as a Long-Term Dividend Period by giving telephonic and written
notice (a "Notice of Long-Term Dividend Period") to the Company,
the Auction Agent, the Paying Agent and the Securities
Depository, on or prior to the tenth day but not more than
20 days prior to an Auction Date for such Series of Auction
Preferred; provided that the Term Selection Agent may not give a
Notice of Long-Term Dividend Period for such Series (and any such
notice shall be null and void) unless Sufficient Clearing Bids
were made in the last occurring Auction for such Series and full
cumulative dividends for all Series payable prior to such date
have been paid in full. The Notice of Long-Term Dividend Period
shall state (i) that the next succeeding Dividend Period for such
Series shall be a Long-Term Dividend Period, (ii) the term
thereof and (iii) whether such shares shall be entitled to a
Merger Premium in the event of a merger or consolidation and
shall be substantially in the form of Exhibit E to the Auction
Agreement.
(d) Any Notice of Long-Term Dividend Period may be revoked
by the Term Selection Agents on or prior to the second Business
Day prior to the related Auction by telephonic and written
notice, substantially in the form of Exhibit F to the Auction
Agreement, to the Company, the Auction Agent, the Paying Agent
and the Securities Depository.
(e) The Company agrees to provide the Term Selection Agents
with all information they may reasonably request in connection
with the performance of their duties hereunder.
SECTION 3. Representations and Warranties of the Company.
The Company represents and warrants to the Term Selection Agents
that:
<PAGE>
4
(a) This Agreement has been duly and validly authorized,
executed and delivered by the Company and, assuming due
authorization, execution and delivery by the Term Selection
Agents, constitutes the valid and legally binding obligation of
the Company, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and
(b) The execution and delivery of this Agreement and the
performance by the Company of its obligations hereunder do not
and will not conflict with, violate, or result in a breach of,
the terms, conditions or provisions of, or constitute a default
under, the Certificate of Incorporation or the By-laws of the
Company, any law or regulation, any order or decree of any court
or public authority having jurisdiction, or any mortgage,
indenture, contract, agreement or undertaking to which the
Company is a party or by which it is bound.
SECTION 4. The Term Selection Agents.
SECTION 4.1. Duties and Responsibilities. (a) The Term
Selection Agents are acting solely as agents of the Company
hereunder and owe no fiduciary duty to any other person by reason
of this Agreement.
(b) The Term Selection Agents undertake to perform such
duties and only such duties as are specifically set forth in this
Agreement, and no implied covenants or obligations shall be read
into this Agreement against the Term Selection Agents.
(c) The Term Selection Agents shall have no duty or
responsibility to verify or determine the accuracy of any
document delivered to them in accordance with the terms
hereunder. The Term Selection Agents shall have no duty or
responsibility to enforce the obligations of the Company to
provide the Term Selection Agents with any notice or document.
(d) In the absence of bad faith or gross negligence on its
part, no Term Selection Agent shall be liable for any action
taken, suffered, or omitted by it in the performance of its
duties under this Agreement, nor shall any Term Selection Agent
be liable for any error of judgment made in good faith unless
such Term Selection Agent shall have been grossly negligent in
ascertaining the pertinent facts.
SECTION 4.2. Rights of the Term Selection Agents. (a)
Each Term Selection Agent may rely and shall be protected in
acting or refraining from acting upon any communication
authorized hereby and upon any written instruction, notice,
request, direction, consent, report, certificate, share
certificate or other instrument, paper or document believed by it
to be genuine. The Term Selection Agents shall not be liable for
<PAGE>
5
acting upon any telephone communication authorized hereby which
the Term Selection Agents believe in good faith to have been
given by the Company. The Term Selection Agents may record by
tape or otherwise telephonic communications with the Company.
(b) Each Term Selection Agent may consult with counsel, and
the advice of such 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.
SECTION 4.3. Compensation, Expenses and Indemnification.
(a) The Company shall reimburse each Term Selection Agent upon
its request for all disbursements and advances incurred or made
by such Term Selection Agent in accordance with any provision
hereof (including the compensation, expenses and disbursements of
the agents and counsel of such Term Selection Agent).
(b) The Company shall indemnify each Term Selection Agent
against, and hold it harmless from, any loss, liability or
expense, incurred without gross negligence or bad faith on its
part, arising out of or in connection with its agency, duties or
functions hereunder including the costs and expenses of defending
itself against any claim or liability in connection with its
exercise or performance of any of its duties hereunder for which
it is entitled to indemnification hereunder.
(c) Promptly after receipt by a Term Selection Agent under
subsection (b) above of written notice of the commencement of any
action, such Term Selection Agent shall, if a claim in respect
thereof is to be made against the Company under such subsection,
notify the Company in writing of the commencement thereof, and in
the event that such Term Selection Agent shall not so notify the
Company within 30 days following receipt of any such notice by
such Term Selection Agent, the Company shall have no further
liability under such subsection to such Term Selection Agent
unless the Company shall have received other notice addressed and
delivered to it at its office specified in Section 5.2 hereof of
the commencement of such action; but the omission so to notify
the Company shall not relieve it from any liability which it may
have to any Term Selection Agent otherwise than under such
subsection. In case any such action shall be brought against any
Term Selection Agent, and it shall notify the Company of the
commencement thereof, the Company shall be entitled to
participate therein, and, to the extent that it shall wish, to
assume the defense thereof, with counsel satisfactory to such
Term Selection Agent in its reasonable judgment, and after notice
from the Company to such Term Selection Agent of its election so
to assume the defense thereof, the Company shall not be liable to
such Term Selection Agent under such subsection for any legal or
other expenses subsequently incurred by such Term Selection Agent
in connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in subsection (b)
above is unavailable to a Term Selection Agent in respect of any
<PAGE>
6
losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then the Company shall contribute
to the amount paid or payable by such Term Selection Agent as a
result of such losses, claims, damages or liabilities (or actions
in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one
hand and such Term Selection Agent on the other from the offering
of the shares of Auction Preferred in accordance with the
Underwriting Agreement, dated December 12, 1994 (the
"Underwriting Agreement"), among the Company and Bear Stearns,
Goldman Sachs and Lehman Brothers, as Underwriters (the
"Underwriters") and the Pricing Agreement, dated December 12,
1994 (the "Pricing Agreement"), among the Company and the
Underwriters. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable
law, then the Company shall contribute to such amount paid or
payable by such Term Selection Agent in such proportion as is
appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and such Term
Selection Agent on the other, as well as any other relevant
equitable considerations. The relative benefits received by the
Company on the one hand and such Term Selection Agent on the
other shall be deemed to be in the same proportion as the total
net proceeds from the offering of Auction Preferred in accordance
with the Underwriting Agreement and the Pricing Agreement
(before deducting expenses) received by the Company bear to the
total commissions received by such Term Selection Agent, acting
in its capacity as an Underwriter, pursuant to the Underwriting
Agreement and the Pricing Agreement. The Company and the Term
Selection Agents agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by
pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by a
Term Selection Agent as a result of the losses, claims, damages
or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such Term Selection Agent
in connection with investigating or defending any such action or
claim.
SECTION 5. Miscellaneous.
SECTION 5.1. Term of Agreement. (a) Unless otherwise
terminated as provided in this Section 5.1, this Agreement shall
remain in effect for so long as shares of Auction Preferred are
outstanding. The Company may terminate this Agreement with
respect to any or all Series upon 5 days' written notice to the
Term Selection Agents. Any Term Selection Agent may resign and
terminate this Agreement with respect to a Series upon 20 days'
written notice to the Company, with a copy to the remaining Term
Selection Agents, provided that no such resignation may become
effective within 25 days prior to an Auction Date for such
Series. In the event of the resignation of one Term Selection
Agent, the Agreement shall remain in effect with respect to the
remaining Term Selection Agents.
(b) Except as otherwise provided in this subsection (b),
the respective rights and duties of the Company and the Term
Selection Agents under this Agreement shall cease upon
termination of this Agreement. The Company's representations,
warranties, covenants and obligations to the Term Selection
Agents under Sections 3 and 4.3 hereof shall survive the
termination hereof.
<PAGE>
7
SECTION 5.2. Communications. Except for communications
authorized to be made by telephone pursuant to this Agreement,
all notices, requests and other communications to any party
hereunder shall be in writing (including telecopy or similar
electronic facsimile followed by oral confirmation of receipt)
and shall be given to such person addressed to it, at its address
or telecopier number set forth below:
If to the Company, addressed:
Ford Holdings, Inc.
The American Road
Dearborn, Michigan 48121
Attention: Manager--Financing Department
Telecopier No.: (313) 845-4077
Telephone No.: (313) 322-1774
If to the Term Selection Agents, addressed:
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Attention: Nancy Belcher
c/o Preferred Desk
Telecopier No.: (212) 272-8151
Telephone No.: (212) 272-5098
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Kinsey Marable
c/o Preferred Desk
Telecopier No.: (212) 509-8885
Telephone No.: (212) 902-6080
and
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Attention: Thomas Corcoran
c/o Auction Securities Desk
Telecopier No.: (212) 528-6385
Telephone No.: (212) 526-8390
<PAGE>
8
or to such other address or telecopier number as such party may
hereafter specify for such purpose by notice to the other party.
Each such notice, request or communication shall be effective
when delivered at the address specified herein. Communications
shall be given on behalf of the Company by a Company Officer and
on behalf of each of Bear Stearns, Goldman Sachs and Lehman
Brothers by an Authorized Officer.
SECTION 5.3. Entire Agreement. This Agreement contains the
entire agreement between the parties relating to the subject
matter hereof and there are no other representations,
endorsements, promises, agreements or understandings, oral,
written or inferred, between the parties relating to the subject
matter hereof except for agreements relating to the compensation
of the Term Selection Agents.
SECTION 5.4. Benefits. Nothing herein, express or implied,
shall give to any person, other than the Company, the Term
Selection Agents and their respective successors and assigns, any
benefit of any legal or equitable right, remedy or claim
hereunder.
SECTION 5.5. Amendment; Waiver. (a) This Agreement shall
not be deemed or construed to be modified, amended, rescinded,
canceled or waived, in whole or in part, except by a written
instrument signed by the parties hereto. The Company shall
notify the Term Selection Agents of any change in the Certificate
of Designations and Certificate of Incorporation not less than
ten Business Days prior to the effective date of any such change.
(b) Failure of any party hereto to exercise any right or
remedy hereunder in the event of a breach hereof by the other
party shall not constitute a waiver of any such right or remedy
with respect to any subsequent breach.
SECTION 5.6. Successors and Assigns. This Agreement shall
be binding upon, inure to the benefit of, and be enforceable by,
the respective successors and assigns of each of the Company and
the Term Selection Agents, provided that each Term Selection
Agent shall give the Company 10 days' written notice of any
assignment of its rights and obligations hereunder.
SECTION 5.7. Severability. If any clause, provision or
section hereof shall be ruled invalid or unenforceable by any
court of competent jurisdiction, the invalidity or
<PAGE>
9
unenforceability of such clause, provision or section shall not
affect any of the remaining clauses, provisions or sections
hereof.
SECTION 5.8. Execution in Counterparts. This Agreement may
be executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same
instrument.
SECTION 5.9. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the date first above written.
FORD HOLDINGS, INC.
By /s/ M. S. Macdonald
-------------------------
Name: M. S. Macdonald
Title: Vice President - Treasurer
BEAR, STEARNS & CO. INC
By /s/ Enrico Reyes
--------------------------
Name: Enrico Reyes
Title: Assistant Vice President
/s/ Goldman, Sachs & Co.
--------------------------
(Goldman, Sachs & Co.)
LEHMAN BROTHERS INC.
By /s/ Thomas Corcoran
-----------------------
Name: Thomas Corcoran
Title: Senior Vice President<PAGE>
TERM SELECTION AGENT AGREEMENT
among
FORD HOLDINGS, INC.
and
BEAR, STEARNS & CO. INC.,
GOLDMAN, SACHS & CO.
and
LEHMAN BROTHERS INC.
Dated as of December 22, 1994
Relating to
FLEXIBLE RATE AUCTION PREFERRED
STOCK --SERIES L, M and N
of
FORD HOLDINGS, INC.
46446/NYL2
