-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LCUYg464r4faJOAKRyIYD0/y7JAfy83gH1WsWOT0awpPdrEO2PtKkTJ6KBWS8pOx KfrGbiCNkqusDs7EFo1IHA== 0000950124-99-003987.txt : 19990630 0000950124-99-003987.hdr.sgml : 19990630 ACCESSION NUMBER: 0000950124-99-003987 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990629 ITEM INFORMATION: FILED AS OF DATE: 19990629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CMS ENERGY CORP CENTRAL INDEX KEY: 0000811156 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 382726431 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09513 FILM NUMBER: 99655667 BUSINESS ADDRESS: STREET 1: FAIRLANE PLZ SOUTH STE 1100 STREET 2: 330 TOWN CENTER DR CITY: DEARBORN STATE: MI ZIP: 48126 BUSINESS PHONE: 3134369200 MAIL ADDRESS: STREET 1: FAIRLANE PLAZA SOUTH, SUITE 1100 STREET 2: 330 TOWN CENTER DRIVE CITY: DEARBORN STATE: MI ZIP: 48126 8-K 1 FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) June 29, 1999 CMS ENERGY CORPORATION (Exact name of registrant as specified in its charter) MICHIGAN 1-9513 38-2726431 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) Fairlane Plaza South, Suite 1100, 330 Town Center Drive, Dearborn, Michigan 48126 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (313) 436-9261 N/A (Former name or former address, if changed since last report) 2 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits The following exhibits are filed with reference to the Registra- tion Statement on Form S-3 (Registration Nos. 333-68937, 333-68937 -01 and 333-68937-02) of CMS Energy Corporation, CMS Energy Trust II and CMS Energy Trust III: 1(c) Form of Underwriting Agreement among CMS Energy Corpora- tion, Salomon Smith Barney Inc., Donaldson, Lufkin & Jenrette Securities Corporation and Banc of America Securities LLC with respect to the Units. 4(t) Form of Master Unit Agreement between CMS Energy Corpo- ration and The Bank of New York, as Unit Agent. 4(t)(1) Form of Normal Unit Certificate (included as Exhibit A to Exhibit 4(t)). 4(t)(2) Form of Stripped Unit Certificate (included as Exhibit B to Exhibit 4(t)). 4(u) Form of Pledge Agreement among CMS Energy Corporation, The Bank of New York, as Unit Agent, and The Chase Manhattan Bank, as Collateral Agent. 4(v) Form of Call Option Agreement between Donaldson, Lufkin & Jenrette Securities Corporation and The Bank of New York, as Unit Agent and as Attorney-In-Fact . The following exhibit is filed in connection with an issuance of trust preferred securities by CMS RHINOS Trust and execution of a forward underwriting contract by CMS Energy Corporation: 99(a) Summary of Principal Terms of Redeemable Hybrid Income Overnight Shares (RHINOS) Transaction which closed June 10, 1999 2 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CMS ENERGY CORPORATION Date: June 29, 1999 By: /s/ Thomas A. McNish ------------------------------------ Name: Thomas A. McNish Title: Vice President and Secretary 3 4 INDEX TO EXHIBITS
Exhibit No. Description - ----------- ----------- 1(c) Form of Underwriting Agreement among CMS Energy Corpora- tion, Salomon Smith Barney Inc., Donaldson, Lufkin & Jenrette Securities Corporation and Banc of America Securities LLC with respect to the Units. 4(t) Form of Master Unit Agreement between CMS Energy Corpo- ration and The Bank of New York, as Unit Agent. 4(t)(1) Form of Normal Units Certificate (included as Exhibit A to Exhibit 4(t)). 4(t)(2) Form of Stripped Units Certificate (included as Exhibit B to Exhibit 4(t)). 4(u) Form of Pledge Agreement among CMS Energy Corporation, The Bank of New York, as Unit Agent, and The Chase Manhattan Bank, as Collateral Agent. 4(v) Form of Call Option Agreement between Donaldson, Lufkin & Jenrette Securities Corporation and The Bank of New York, as Unit Agent and as Attorney-In-Fact. 99(a) Summary of Principal Terms of Redeemable Hybrid Income Overnight Shares (RHINOS) Transaction which closed June 10, 1999
4 EX-1.(C) 2 FORM OF UNDERWRITING AGREEMENT 1 EXHIBIT 1 (c) CMS ENERGY CORPORATION CMS ENERGY TRUST II % ADJUSTABLE CONVERTIBLE TRUST SECURITIES (Stated Amount $ per Unit) --------------------------------------------------- UNDERWRITING AGREEMENT ---------------------- July __, 1999 Salomon Smith Barney Inc. Donaldson, Lufkin & Jenrette Securities Corporation Banc of America Securities LLC As Representatives of the several Underwriters named in Schedule II hereto c/o Salomon Smith Barney Inc. 388 Greenwich Street New York, New York 10013 Ladies and Gentlemen: CMS Energy Trust II, a statutory business trust formed under the laws of the State of Delaware (the "Trust"), and CMS Energy Corporation, a Michigan corporation, as sponsor of the Trust and as guarantor (the "Company"), propose, subject to the terms and conditions stated herein, to issue and sell to the Underwriters (as defined in Section 14 hereof) an aggregate of ____ __% Adjustable Convertible Trust Securities (the "Firm Units"), consisting of (i) the right to purchase certain common stock of the Company and (ii) certain preferred securities of the Trust that are subject to a call option, as described below. The Underwriters have designated the representatives named in Schedule I hereto (the "Representatives") to execute this Agreement on their behalf and to act for them in the manner provided in this Agreement. In connection herewith, the Company and the Underwriters propose, subject to the terms and conditions stated herein, to enter into the Purchase Contracts (the "Purchase Contracts"), underlying an aggregate of Firm Units, pursuant to the Master Unit Agreement to be dated as of July , 1999 (the "Master Unit Agreement"), between the Company and The Bank of New York, as Master Unit Agent (the "Unit Agent"). 2 Further, the Trust and the Company propose that the Trust, subject to the conditions stated herein, issue and sell to the Underwriters, an aggregate of $ Trust Preferred Securities (liquidation amount $___ per preferred security) (the "Trust Preferred Securities") underlying the Firm Units. The Trust Preferred Securities will represent undivided beneficial interests in the assets of the Trust, guaranteed on a subordinated basis by the Company as to the payment of distributions and as to payments on liquidation or redemption, to the extent set forth in a guarantee agreement to be dated as of July , 1999 (the "Guarantee") between the Company and The Bank of New York, as trustee (the "Guarantee Trustee"). In connection therewith, the Trust is to purchase, with the proceeds from the sale of its Trust Preferred Securities and its Trust Common Securities (liquidation amount $___ per common security) (the "Trust Common Securities"), ___ % Subordinated Debentures due 2004 (the "Junior Subordinated Debentures") of the Company, to be issued pursuant to an Indenture dated as of June 1, 1997 (the "Base Indenture") between the Company and The Bank of New York, as trustee (the "Debenture Trustee"), as supplemented by a Third Supplemental Indenture (the "Supplemental Indenture") dated as of July __, 1999 between the Company and the Debenture Trustee (the Base Indenture as so supplemented, the "Indenture"). The Company will be the holder of 100% of the Trust Common Securities. The Trust will be subject to the terms of an Amended and Restated Trust Agreement (the "Trust Agreement"), among the Company and the trustees of the Trust (the "CMS Trustees"), including The Bank of New York, as property trustee (the "Property Trustee"). The Trust Agreement, the Indenture and the Guarantee will be qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Further, the Underwriters will, on behalf of the initial holders of the Units, sell Call Options (the "Call Options") to Donaldson, Lufkin & Jenrette Securities Corporation (in its capacity as the holder of the Call Options, the "Call Option Holder") pursuant to the Call Option Agreement dated as of July __, 1999 between the Call Option Holder and the Unit Agent (the "Call Option Agreement") relating to the Trust Preferred Securities. The Call Option Agreement will entitle the Call Option Holder to acquire the Trust Preferred Securities (or Junior Subordinated Debentures substituted therefor), on or before the Call Option Expiration Date (as defined in the Call Option Agreement), in exchange for the Aggregate Call Option Exercise Consideration (as defined in the Call Option Agreement). In connection with the Master Unit Agreement and the Call Options, and pursuant to the Pledge Agreement, to be dated as of July , 1999 (the "Pledge Agreement"), among the Company, the Unit Agent, the Call Option Holder and Chase Manhattan Bank, as collateral agent (the "Collateral Agent"), the Trust Preferred Securities and any substituted securities will be pledged (the "Pledged Securities") by the Unit Agent, on behalf of the holders of the Units, to secure the holders' obligations to the Company and the Call Option Holder under the Purchase Contract and Call Option, respectively. 2 3 In addition, subject to the terms and conditions herein, the Company proposes to grant the Underwriters an option to enter into ____ additional Purchase Contracts and the Trust and the Company propose to grant the Underwriters an option to purchase up to ____ additional Trust Preferred Securities, and, in the event the Underwriters enter into any such additional Purchase Contracts, the Underwriters propose to purchase a number of additional Trust Preferred Securities equal to such number of additional Purchase Contracts, pledge such Trust Preferred Securities to the Collateral Agent and sell Call Options relating to such Trust Preferred Securities to the Call Option Holder (the Units resulting therefrom being the "Optional Units"). The Firm Units and any Optional Units purchased by the Underwriters are herein called the "Units". The rights to purchase newly issued shares of common stock, $0.01 par value per share, of the Company (the "Common Stock") to be issued upon the settlement of the Purchase Contracts (the "Purchase Contract Shares"), together with the Trust Preferred Securities or other Pledged Securities and subject to (a) the obligations owed to the Company under the Purchase Contract, (b) the obligations owed to the Call Option Holder under the Call Option and (c) the pledge arrangements under the Pledge Agreement that secures the foregoing obligations, collectively constitute a Unit. 1. Representations and Warranties of the Company and the Trust. Each of the Trust and the Company represents and warrants to, and agrees with, each of the Underwriters that: (a) A registration statement on Form S-3 (Registration No. 333-68937) (the "Initial Registration Statement") in respect of the Units, including the Purchase Contracts, the Purchase Contract Shares, the Trust Preferred Securities, the Junior Subordinated Debentures, the Guarantee and the Call Options, has been filed with the Securities and Exchange Commission (the "Commission"); the Initial Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to the Representatives and, excluding exhibits to such registration statement, but including all documents incorporated by reference in the prospectus included therein, to the Representatives for each of the other Underwriters have been declared effective by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the "Act"), which became effective upon filing, no other document with respect to the Initial Registration Statement or document incorporated by reference therein has heretofore been filed, or transmitted for filing, with the Commission (other than prospectuses filed pursuant to Rule 424(b) of the rules and regulations of the Commission under the Act each in the form heretofore delivered to the Representatives); no stop order suspending the effectiveness of the Initial Registration Statement is in effect and no proceedings for such purposes are pending before or, to the knowledge of the Company, threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) under the Act, is hereinafter called a "Preliminary Prospectus"); the various parts of the Initial Registration Statement and 3 4 the Rule 462(b) Registration Statement, if any, including all exhibits thereto and the documents incorporated by reference in the prospectus contained in the Initial Registration Statement at the time such part of the registration statement became effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, each as amended at the time such part of the registration statement became effective, are hereinafter collectively called the "Registration Statement"; the prospectus relating to the Units, in the form in which it has most recently been filed, or transmitted for filing, with the Commission on or prior to the date of this Agreement, is hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Initial Registration Statement that is incorporated by reference in the Registration Statement; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus as amended or supplemented in relation to the Securities in the form in which it is filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 4(a) hereof, including any documents incorporated by reference therein as of the date of such filing); (b) The Registration Statement and the Prospectus conform, and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by or through the Representatives on behalf of any Underwriter expressly for use in the Prospectus as amended or supplemented relating to the Units or to any statements in or omissions from that part of the Registration Statement that shall constitute the Statements of Eligibility and Qualification under the Trust Indenture Act of the Debenture Trustee, the Guarantee Trustee and the Property Trustee; (c) The documents incorporated by reference in the Registration Statement and the Prospectus, when they were filed (or, if an amendment with respect to any such document 4 5 was filed, when such amendment was filed) with the Commission, conformed in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and any further documents so filed and incorporated by reference will, when they are filed with the Commission, conform in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder; none of such documents, when filed (or, if an amendment with respect to any such document was filed, when such amendment was filed), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and no such further document, when it is filed, will contain an untrue statement of a material fact or will omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading; (d) There has not been any material and adverse change in the business, properties or financial condition of the Company and its Subsidiaries (as defined in Rule 405 under the Act, and hereinafter called the "Subsidiaries"), taken as a whole, from that set forth in the Registration Statement and the Prospectus (other than changes referred to in or contemplated by the Registration Statement or the Prospectus); (e) The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Michigan and has all requisite authority to own or lease its properties and conduct its business as described in the Prospectus and to consummate the transactions contemplated hereby, and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business as described in the Prospectus or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its Subsidiaries, taken as a whole; each significant subsidiary (as defined in Rule 405 under the Act, and hereinafter called a "Significant Subsidiary") of the Company has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has all requisite authority to own or lease its properties and conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business as described in the Prospectus or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its Subsidiaries, taken as a whole; and the Company has the requisite power and authority to authorize the offering of the Junior Subordinated Debentures and the Purchase Contract Shares, to exercise, deliver and perform the Purchase Contracts, the Master Unit Agreement, the Pledge Agreement, the Guarantee, the Indenture, the Trust Agreement and this Agreement, and to issue, sell and deliver the Junior Subordinated Debentures and the Purchase Contract Shares; 5 6 (f) The shares of Common Stock of the Company issued and outstanding prior to the issuance and sale of the Units have been duly authorized and are validly issued, fully paid and non-assessable; the Purchase Contract Shares to be issued and sold by the Company pursuant to the Purchase Contracts and the Master Unit Agreement have been duly authorized and reserved for issuance and, when issued and delivered against payment therefor as provided in the Purchase Contracts and the Master Unit Agreement, will be validly issued, fully paid and non-assessable and conform to the description of Common Stock in the Prospectus; (g) The Trust Preferred Securities underlying the Units have been duly and validly authorized by the Trust, and, when the Trust Preferred Securities are issued and delivered, such Trust Preferred Securities will be validly issued, fully paid and non-assessable undivided beneficial interests in the assets of the Trust; the Trust Preferred Securities will conform in all material respects to the description thereof contained in the Prospectus; the issuance of the Trust Preferred Securities is not subject to any preemptive or other similar rights; the Trust Preferred Securities will have the rights set forth in the Trust Agreement, and the terms of the Trust Preferred Securities are valid and binding on the Trust; (h) The Trust Common Securities have been duly and validly authorized by the Trust and upon delivery by the Trust to the Company against payment therefor as described in the Prospectus, will be duly and validly issued undivided beneficial interests in the assets of the Trust and will conform in all material respects to the description thereof contained in the Prospectus; the issuance of the Trust Common Securities is not subject to preemptive or other similar rights; at each Time of Delivery (as defined in Section 3 hereof), all of the issued and outstanding Trust Common Securities will be directly owned by the Company free and clear of any security interest, mortgage, pledge, claim, lien or encumbrance (each, a "Lien"); and the Trust Common Securities and the Trust Preferred Securities are the only interests authorized to be issued by the Trust; (i) Except for the outstanding shares of preferred stock of Consumers Energy Company, the 8.36% Trust Originated Preferred Securities of Consumers Power Company Financing I, the 8.20% Trust Originated Preferred Securities of Consumers Energy Financing II and the 7.75% Convertible Quarterly Income Preferred Securities of CMS Energy Trust I, all of the outstanding capital stock of each of Consumers Energy Company and CMS Enterprises Company is owned directly or indirectly by the Company, free and clear of any Lien, and there are no outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in any of Consumers Energy Company and CMS Enterprises Company or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any such capital stock, any such convertible or exchangeable securities or any such rights, warrants or options; 6 7 (j) The capital stock of the Company, including the Common Stock, conforms in all material respects to the description thereof in the Prospectus; (k) Each of the Company and its Significant Subsidiaries has all necessary consents, authorizations, approvals, orders, certificates and permits of and from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, to own, lease, license and use its properties and assets and to conduct its business in the manner described in the Prospectus, except to the extent that the failure to obtain or file would not have a material adverse effect on the Company and its Subsidiaries, taken as a whole; (l) No order, license, consent, authorization or approval of, or exemption by, or the giving of notice to, or the registration with any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, and no filing, recording, publication or registration in any public office or any other place, was or is now required to be obtained by the Company to authorize its execution or delivery of, or the performance of its obligations under, this Agreement, except such as have been obtained or may be required under state securities or Blue Sky laws or as referred to in the Prospectus in connection with the purchase and distribution of the Units, the Purchase Contracts, the Master Unit Agreement, the Pledge Agreement, the Guarantee, the Trust Agreement and the Indenture, or to issue, sell and deliver the Junior Subordinated Debentures and the Purchase Contract Shares; (m) No order, license, consent, authorization or approval of, or exemption by, or the giving of notice to, or the registration with any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, and no filing, recording, publication or registration in any public office or any other place, was or is now required to be obtained by the Trust to authorize its execution or delivery of, or the performance of its obligations under, this Agreement, except such as have been obtained or may be required under state securities or Blue Sky laws or as referred to in the Prospectus in connection with the purchase and distribution of the Units, and the Trust Agreement, or to issue, sell and deliver the Trust Preferred Securities and the Trust Common Securities; (n) The execution and delivery of this Agreement by the Trust, the compliance by the Trust with all of the provisions of this Agreement, the issuance and sale of the Trust Preferred Securities and the Trust Common Securities by the Trust, the purchase of the Junior Subordinated Debentures by the Trust, the distribution of the Junior Subordinated Debentures by the Trust in the circumstances contemplated by the Trust Agreement, the performance of this Agreement and the Trust Agreement, and the consummation of each of the transactions contemplated thereby did not and will not conflict with, result in a breach of any of the terms or provisions of, or constitute a default or require the consent of any party under the Trust Agreement, any material terms or provisions of any material agreement or instrument to which the Trust is a party, any existing material applicable law, rule or 7 8 regulation or any judgment, order or decree of any governmental instrumentality or court, domestic or foreign, having jurisdiction over the Trust or any of its properties or assets, or did or will result in the creation or imposition of any Lien on the Company's properties or assets; (o) The execution and delivery of this Agreement by the Company, the compliance by the Company with all of the provisions of this Agreement, the entry into the Purchase Contracts by the Company, the issuance and sale of the Trust Preferred Securities and the Trust Common Securities by the Trust, the sale of the Junior Subordinated Debentures by the Company to the Trust, the distribution of the Junior Subordinated Debentures by the Trust in the circumstances contemplated by the Trust Agreement, the issuance and sale by the Company of the Purchase Contract Shares, the execution, delivery and performance of this Agreement, the Purchase Contracts, the Master Unit Agreement, the Pledge Agreement, the Guarantee, the Trust Agreement and the Indenture, and the consummation of each of the transactions contemplated thereby, did not and will not conflict with, result in a breach of any of the terms or provisions of, or constitute a default or require the consent of any party under the Company's Articles of Incorporation or by-laws, any material terms or provisions of any material agreement or instrument to which the Company is a party, any existing material applicable law, rule or regulation or any judgment, order or decree of any governmental instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its properties or assets, or did or will result in the creation or imposition of any Lien on the Company's properties or assets; (p) Except as disclosed in the Prospectus, there is no action, suit, proceeding, inquiry or investigation (at law or in equity or otherwise) pending or, to the knowledge of the Company, threatened against the Company or any Subsidiary by any governmental authority that (i) questions the validity, enforceability or performance of this Agreement or the Units or (ii) if determined adversely, is likely to have a material adverse effect on the business or financial condition of the Company and its Subsidiaries, taken as a whole, or materially adversely affect the ability of the Company to perform its obligations hereunder or the consummation of the transactions contemplated by this Agreement; (q) Except as set forth in the Prospectus, no event or condition exists that constitutes, or with the giving of notice or lapse of time or both would constitute, a default or any breach or failure to perform by the Company or any of its Significant Subsidiaries in any material respect under any indenture, mortgage, loan agreement, lease or other material agreement or instrument to which the Company or any of its Significant Subsidiaries is a party or by which it or any of its Significant Subsidiaries, or any of their respective properties, may be bound; (r) Neither the Company, the Trust nor any of the Subsidiaries is, or, after giving effect to the offering and sale of the Units, will be an "investment company" within the 8 9 meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"). The Trust is not required to be registered under the Investment Company Act; (s) The Units have been approved for listing on the New York Stock Exchange, subject to notice of issuance; (t) The Trust has been duly created and is validly existing as a statutory business trust in good standing under the Business Trust Act of the State of Delaware (the "Delaware Business Trust Act") with the trust power and authority to own property and conduct its business as described in the Prospectus, and has conducted and will conduct no business other than the transactions contemplated by this Agreement and described in the Prospectus; the Trust is not a party to or bound by any agreement or instrument other than this Agreement, the Trust Agreement between the Company and the CMS Trustees named therein and the agreements and instruments contemplated by the Trust Agreement and described in the Prospectus; based on expected operations and current law, the Trust is not and will not be classified as an association taxable as a corporation for United States federal income tax purposes; and, to the knowledge of each of the Company and the Trust, the Trust is not a party to or subject to any action, suit or proceeding of any nature; (u) This Agreement has been duly authorized, executed and delivered by the Company and the Trust and constitutes a valid and binding obligation of each of the Company and the Trust, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally or by general principles of equity (regardless of whether enforcement is considered in a proceeding at law or in equity); (v) The Purchase Contracts underlying the Units have been duly authorized and when validly executed and delivered by the Company and the other parties thereto pursuant to this Agreement and the Master Unit Agreement, will constitute valid and binding obligations of the Company, enforceable in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally or by general principles of equity (regardless of whether enforcement is considered in a proceeding at law or in equity); and the Purchase Contracts will conform to the descriptions thereof in the Prospectus; (w) The Master Unit Agreement and the Pledge Agreement, have each been duly authorized by the Company and, when executed and delivered by the Company and the other parties thereto, will constitute valid and binding obligations, enforceable in accordance with their respective terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally or by general principles of equity (regardless of whether enforcement is considered in a proceeding at law or in equity); the Master Unit Agreement and the Pledge Agreement conform or will conform to the descriptions thereof in the Prospectus; and the Pledge Agreement creates, as collateral 9 10 security, for the performance when due, by the holders of the Units, of the respective obligations created under the Purchase Contracts and Call Options, a legal, valid and perfected security interest (as that term is defined in the Uniform Commercial Code, as adopted and in effect in the State of New York), in favor of the Collateral Agent, in the right, title and interest of such holders in the Pledged Securities that constitute a part of the Units; (x) The Guarantee, the Junior Subordinated Debentures, the Trust Agreement and the Indenture have each been duly authorized and when validly executed and delivered by the Company and, in the case of the Guarantee, by the Guarantee Trustee and, in the case of the Trust Agreement, by the CMS Trustees and, in the case of the Indenture, by the Debenture Trustee, and, in the case of the Junior Subordinated Debentures, when validly authenticated and delivered by the Debenture Trustee and, in the case of the Guarantee, upon due execution, authentication and delivery of the Junior Subordinated Debentures and upon payment therefor, will constitute valid and binding obligations of the Company, enforceable in accordance with their respective terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally or by general principles of equity (regardless of whether enforcement is considered in a proceeding at law or in equity); the Junior Subordinated Debentures are entitled to the benefits of the Indenture; the Trust Agreement, the Indenture and the Guarantee have been duly qualified under the Trust Indenture Act; (y) Each of the Trust Agreement, the Guarantee, the Indenture and the Junior Subordinated Debentures will conform in all material respects to the description thereof contained in the Prospectus. 2. Sale of Units. (a) Subject to the terms and conditions set forth herein: (i) the Company and each of the Underwriters, severally and not jointly, agree to enter into the Purchase Contracts underlying the number of Firm Units set forth opposite the name of such Underwriter in Schedule II hereto, (ii) the Company and the Trust agree that the Trust will sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Trust, at a purchase price of $_____ per Trust Preferred Security, the number of Trust Preferred Securities underlying the number of Firm Units set forth opposite the name of such Underwriter in Schedule II hereto, and (iii) in the event and to the extent that the Underwriters shall exercise the election to enter into additional Purchase Contracts underlying Optional Units as provided in sub-section (b) below, 10 11 (1) the Company and each of the Underwriters, severally and not jointly, agree to enter into that number of additional Purchase Contracts as to which such election shall have been exercised (to be adjusted by you so as to eliminate fractional Purchase Contracts) determined by multiplying such number of additional Purchase Contracts by a fraction, the numerator of which is the maximum number of Optional Units set forth opposite the name of such Underwriter in Schedule II hereto and the denominator of which is the maximum number of Optional Units set forth in total opposite the names of all such Underwriters in Schedule II hereto, and (2) the Company and the Trust agree that the Trust will sell to each of the Underwriters and each of the Underwriters agrees, severally and not jointly, to purchase from the Trust at the purchase price set forth in clause (a) of this Section 2, a number of Trust Preferred Securities equal to such number of additional Purchase Contracts. (b) The Company hereby grants to the Underwriters the right to enter into at their election up to____Purchase Contracts underlying Optional Units and the Company and the Trust hereby grant the Underwriters the right to purchase from the Trust at their election up to____Trust Preferred Securities, for the sole purpose of covering overallotments in the sale of the Firm Units. Any such election to enter into such additional Purchase Contracts and purchase such Trust Preferred Securities may be exercised only by written notice from you to the Company and the Trust, given within a period of 30 calendar days after the date of this Agreement and setting forth the aggregate number of such additional Purchase Contracts to be entered into and Trust Preferred Securities to be purchased (which shall be an identical number) and the date on which the related Optional Units are to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless you and the Company otherwise agree in writing, earlier than two or later than ten business days after the date of such notice. (c) The Underwriters agree to pledge to the Collateral Agent, on behalf of the initial purchasers of the Units, the Trust Preferred Securities underlying the Firm Units and the Optional Units with respect to which the Company and the Underwriters have entered into Purchase Contracts. Such pledge shall be effected by the delivery by the Underwriters to the Collateral Agent in New York of the Trust Preferred Securities to be pledged at the appropriate Time of Delivery (as defined below) in accordance with the Pledge Agreement. (d) The Underwriters further agree to sell, on behalf of the initial purchasers of the Units, to the Call Option Holder a Call Option with respect to each Trust Preferred Security purchased at a purchase price of $____ per Call Option at the appropriate Time of Delivery. 11 12 (e) Unless the context otherwise requires, for purposes of this Agreement, the act of entering into a Purchase Contract, purchasing a Trust Preferred Security and selling a Call Option with respect to such Trust Preferred Security shall be referred to as the "purchase" of a Unit. 3. Delivery of Units. (a) The Units to be purchased by each Underwriter shall be delivered by or on behalf of the Company to such Underwriter, through the facilities of the Depository Trust Company ("DTC"), for the account of such Underwriter, against (i) payment by or on behalf of such Underwriter of the purchase price therefor by certified or official bank check or checks, payable to the order of, or by wire transfer to the account designated by, the Company in federal or other immediately available funds and (ii) delivery to the Collateral Agent of the Trust Preferred Securities relating to such Units. The Company will cause the certificates representing the Units to be made available for checking and packaging at least twenty-four hours prior to the Time of Delivery (as defined below) at the office of DTC or its designated custodian (the "Designated Office"). The Units to be purchased by each Underwriter hereunder will be represented by one or more definitive global Units in book-entry form which will be deposited by or on behalf of the Company with the DTC or its designated custodian. The time and date of such delivery and payment shall be 9:30 a.m., New York City time, on July __, 1999 or such other time and date as the Underwriters, the Trust and the Company may agree upon in writing, and, with respect to the Optional Units, 9:30 a.m., New York City time, on the date specified by the Representatives in the written notice given by the Representatives of the Underwriters' election to purchase such Optional Units, or such other time and date as the Representatives and the Company may agree upon in writing. Such time and date for delivery of the Firm Units is herein called the "First Time of Delivery," such time and date for delivery of the Optional Units, if not the First Time of Delivery, is herein called the "Second Time of Delivery," and each such time and date for delivery is herein called a "Time of Delivery". (b) The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 6 hereof, including the cross-receipt for the Units, will be delivered at such time and date at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New York 10022 (the "Closing Location"), and the Units will be delivered at the Designated Office, all at each Time of Delivery. A meeting will be held at the Closing Location prior to each Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Agreement, "New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close. 12 13 4. Covenants of the Trust and the Company. The Trust and the Company, jointly and severally, agree with each of the Representatives and each of the Underwriters: (a) To prepare the Prospectus as amended and supplemented in relation to the Units in a form approved by the Representatives and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of this Agreement or, if applicable, such earlier time as may be required by Rule 424(b); prior to each Time of Delivery, to make no further amendment or any supplement to the Registration Statement or Prospectus as amended or supplemented unless the Company has furnished the Representatives and their counsel with a copy, for their review and comment, a reasonable time prior to filing and has reasonably considered any comments of the Representatives, and to make no such amendment or supplement to which such counsel shall reasonably object on legal grounds in writing, after consultation with the Representatives; to timely file all reports and any definitive proxy or information statements required to be filed by the Trust or the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the offering or sale of the Units, and during such same period to advise the Representatives, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Units, of the suspension of the qualification of the Units for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any prospectus relating to the Units or suspending any such qualification, promptly to use its best efforts to obtain the withdrawal of such order; (b) Prior to 10:00 a.m., New York City time, on the New York Business Day next succeeding the date of this Agreement and from time to time during the period of time (not exceeding nine months) after the date of the Prospectus when a Prospectus is required to be delivered under the Act to furnish the Representatives in New York City with copies of the Prospectus as amended or supplemented in such quantities as the Representatives may reasonably request, and, if the delivery of a prospectus is required at any time after the expiration of nine months in connection with the offering or sale of the Units, and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated 13 14 by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to prepare and file such document and to furnish without charge as many copies as the Representatives may reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; (c) If the Company and the Trust elect to rely upon Rule 462(b), the Company and the Trust shall file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act; (d) To make generally available to the Company's securityholders, as soon as practicable but in any event not later than eighteen months after the effective date of the Registration Statement, an "earning statement" (which need not be audited by independent public accountants) covering a twelve-month period commencing after the effective date of the Registration Statement and ending not later than 15 months thereafter, which shall comply in all material respects with the provisions of Section 11(a) of the Act and Rule 158 under the Act); (e) To use its best efforts to qualify the Units for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives may reasonably request, to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Units, and to pay (or cause to be paid), or reimburse (or cause to be reimbursed) the Representatives and their counsel for, reasonable filing fees and expenses in connection therewith (including the reasonable fees and disbursements of counsel to the Representatives and filing fees and expenses paid and incurred prior to the date hereof), provided, however, that the Company shall not be required to qualify to do business as a foreign corporation or as a securities dealer or to file a general consent to service of process or to file annual reports or to comply with any other requirements deemed by the Company to be unduly burdensome; (f) During the period beginning from the date hereof and continuing for a period of ___ days after the issuance of the Units, not to offer, sell, contract to sell or otherwise dispose of any Units, Trust Preferred Securities or Common Stock or any other securities of the Company which are substantially similar to the Units, including any guarantee of such securities, or any securities convertible into or exchangeable for or representing the right to receive any of the foregoing securities, other than shares of Common Stock issuable upon conversion of the Units or pursuant to the Company's Stock Purchase Plan, Performance Incentive Stock Plan, Employee Stock Ownership Plan and Employee Savings and Incentive Plan, without the prior written consent of the Representatives; 14 15 (g) To use the net proceeds received by it from the sale of the Units, pursuant to this Agreement in the manner specified in the Prospectus under the caption "Use of Proceeds"; and (h) To use its best efforts to list, subject to notice of issuance, the Units on the New York Stock Exchange. 5. Expenses. The Company covenants and agrees with the several Representatives and the several Underwriters that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Trust's and the Company's counsel and accountants in connection with the registration of the Units under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the dealers and the Underwriters; (ii) the cost of any delivery to the Underwriters of any Blue Sky Memorandum; (iii) all expenses in connection with the qualification of the Units for offering and sale under state securities laws as provided in Section 4(e) hereof, including the fees and disbursements of counsel for the Representatives in connection with such qualification and in connection with the Blue Sky survey(s) up to an aggregate amount not to exceed $5,000; (iv) any fees charged by securities rating services for rating the Units, the Trust Preferred Securities and the Junior Subordinated Debentures; (v) the cost of preparing the certificates for the Units, the Trust Preferred Securities, the Junior Subordinated Debentures, the Trust Common Securities and any Purchase Contract Shares; (vi) the fees and expenses of the CMS Trustees, the Debenture Trustee and the Guarantee Trustee and any other agent thereof and the fees and disbursements of their counsel (it being understood that as among the Company and the Trust and such trustees, such fees and expenses shall not exceed $5,000); (vii) the cost and charges of any transfer agent or registrar or dividend disbursing agent; (viii) the fees and expenses of the Unit Agent, Collateral Agent and Debenture Trustee and any agent of the Unit Agent, Collateral Agent and Debenture Trustee and the fees and disbursements of any counsel for the Unit Agent, Collateral Agent or Trustee in connection with the Master Unit Agreement, the Pledge Agreement, the Call Option Agreement, the Indenture and the Junior Subordinated Debentures, as the case may be and (ix) all other reasonable costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Section 8 hereof, the Representatives and the Underwriters will pay all of their own costs and expenses, including, without limitation, the fees of their counsel. 6. Conditions on the Obligations of the Underwriters. The obligations of the Underwriters shall be subject to the condition that all representations and warranties and other statements of the Trust and the Company herein are, at and as of such Time of Delivery, true and correct, the condition that the Trust and the Company shall have performed all of their respective obligations hereunder theretofore to be performed, and the following additional conditions: 15 16 (a) The Prospectus as amended or supplemented in relation to the Securities shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 4(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall have become effective by 10:00 p.m., Washington, D.C. time, on the date of this Agreement; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Representatives' reasonable satisfaction; (b) Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden Arps"), counsel for the Underwriters, shall have furnished to the Representatives such written opinion or opinions, dated the appropriate Time of Delivery, with respect to the the formation of the Trust, insofar as the federal laws of the United States and the laws of the State of New York or the General Corporation Law of the State of Delaware or the Delaware Business Trust Act are concerned, the validity of the Units, the Trust Preferred Securities, the Junior Subordinated Debentures, the Guarantee and the Prospectus, as well as such other related matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (c) Michael D. Van Hemert, Assistant General Counsel to the Company, shall have furnished to the Representatives his written opinion or opinions, dated such Time of Delivery, in form and substance satisfactory to the Representatives, to the effect that: (i) The Company is a duly organized and validly existing corporation in good standing under the laws of Michigan, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, as amended and supplemented; (ii) The Company has an authorized capitalization as set forth in the Prospectus, as amended or supplemented, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; (iii) The Purchase Contract Shares to be issued and sold by the Company pursuant to the Purchase Contracts and the Master Unit Agreement have been duly authorized and reserved for issuance and, when issued and delivered against payment therefor as provided in the Purchase Contracts and the Master Unit Agreement, will be duly and validly issued, fully paid and non-assessable and will conform to the description of the Common Stock in the Prospectus; 16 17 (iv) To the best of such counsel's knowledge and other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries is a party or of which any property of the Company or any of its Subsidiaries is the subject which, if determined adversely to the Company or any of its Subsidiaries, would in the aggregate have a material adverse effect on the current or future consolidated financial position, securityholders' equity or results of operations of the Company and its Subsidiaries; and to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (v) This Agreement has been duly authorized, executed and delivered by the Company; (vi) To the best knowledge of such counsel, there are no outstanding subscriptions, rights, warrants, options, calls, convertible securities, commitments or sale or Liens related to or entitling any person to purchase or otherwise to acquire any shares of the capital stock of, or other ownership interest in, any Significant Subsidiary; (vii) The issuance and sale of the Units being delivered at such Time of Delivery, the entry by the Company into the Purchase Contracts, the compliance by the Company with all the provisions of this Agreement, the issuance and sale of the Trust Preferred Securities and the Trust Common Securities by the Trust, the sale of the Junior Subordinated Debentures by the Company to the Trust, the issuance by the Company of the Purchase Contract Shares pursuant to the Purchase Contracts and the Master Unit Agreement, the distribution of the Junior Subordinated Debentures by the Trust in the circumstances contemplated by the Trust Agreement and the execution, delivery and performance of this Agreement, the Purchase Contracts, the Master Unit Agreements, the Pledge Agreements, the Guarantee, the Trust Agreement and the Indenture and the consummation of each of the transactions contemplated thereby, will not conflict with or result in a breach or violation of any of the material terms or provisions of, or constitute a default under, any material indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Company or any of its Subsidiaries is a party or by which the Company is bound or to which any of the property or assets of the Company or any of its Subsidiaries is subject (except for such breaches or violations or defaults that would not have a material adverse effect on the business, property or financial condition of the Trust or of the Company and its Subsidiaries, taken as a whole), nor will such action result in any violation of the provisions of the Articles of Incorporation or by-laws of the Company or any statute or any currently existing order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over the Company or any of its Subsidiaries or any of its 17 18 properties (other than the securities or Blue Sky laws of the various states, as to which such counsel need express no opinion); (viii) No consent, approval, authorization, order, registration or qualifica tion of or with any such court or governmental agency or body is required for the issuance and sale of the Units or the consummation by the Company of the transactions contemplated herein, except such as have been obtained under the Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws (as to which such counsel need express no opinion) in connection with the purchase and distribution of the Units; (ix) Neither the Company nor any of its Significant Subsidiaries is in violation of its respective charters or bylaws or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except for such violations or defaults the existence of which would not have a material adverse effect on the Company and its Subsidiaries, taken as a whole; (x) The statements made in the Prospectus under the captions "Descrip tion of the Units," "Description of the Purchase Contracts," "Description of the Call Options," "Pledged Securities and Pledge Agreement," "Certain Provisions of Principal Agreements," "Description of the Trust Preferred Securities," "Description of the Guarantee," "Description of the Junior Subordinated Debentures," and "Relationship Among the Preferred Securities, the Debenture and the Guarantee," insofar as such statements constitute summaries of legal matters or documents referred to therein, are accurate in all material respects; the Units, the Trust Preferred Securities, the Junior Subordinated Debentures, the Guarantee, the Trust Agreement, the Indenture and the Trust Common Securities conform as to legal matters to the description thereof and to the statements in regard thereto contained in the Registration Statement and the Prospectus as amended or supplemented; (xi) The Company is not an "investment company" within the meaning of the Investment Company Act. The Trust is not required to be registered under the Investment Company Act; (xii) The documents incorporated by reference in the Prospectus as amended or supplemented (other than the operating statistics, financial statements, notes, auditors' reports and related schedules therein, and any other financial or statistical data included or incorporated by reference therein, as to which such counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with 18 19 the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; and they have no reason to believe that any of such documents, when they became effective or were so filed, as the case may be, contained, in the case of a registration statement which became effective under the Act, an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or, in the case of other documents which were filed under the Act or the Exchange Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading; (xiii) The Registration Statement and the Prospectus as amended or supplemented, and any further amendments and supplements thereto made by the Company prior to such Time of Delivery (other than the operating statistics, financial statements, notes, auditors' reports and related schedules and any other financial or statistical data included or incorporated by reference therein, as to which such counsel need express no opinion), comply as to form in all material respects with the requirements of the Act and the Trust Indenture Act and the rules and regulations thereunder; although he does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus, except for those referred to in the opinion in subsection (ix) of this Section 6(c), he has no reason to believe that, as of its effective date, the Registration Statement or any further amendment thereto made by the Company prior to such Time of Delivery (other than the operating statistics, financial statements, notes, auditors' reports and related schedules and any other financial or statistical data included or incorporated by reference therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that, as of its date, the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to such Time of Delivery (other than the operating statistics, financial statements, notes, auditors' reports and related schedules and any other financial or statistical data included or incorporated by reference therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or that, as of such Time of Delivery, either the Registration Statement or the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to such Time of Delivery (other than the operating statistics, financial statements, notes, auditors' reports and related schedules and any other financial or statistical data included or incorporated by reference therein, as to which such counsel need express no opinion) contains an untrue statement of a material fact or 19 20 omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and he does not know of any amendment to the Registration Statement required to be filed or any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus as amended or supplemented or required to be described in the Registration Statement or the Prospectus as amended or supplemented which are not filed or incorporated by reference or described as required; (xiv) The Indenture has been duly authorized, executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except to the extent that (a) enforcement thereof may be limited by (i) bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and (b) the waiver of usury contained in Section 5.13 of the Base Indenture may be unenforceable; (xv) The Junior Subordinated Debentures have been duly authorized for issuance by the Company and, when authenticated by the Debenture Trustee in accordance with the terms of the Indenture, will be validly issued by the Company and will constitute valid and binding obligations of the Company entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms, except to the extent that (a) enforcement thereof may be limited by (i) bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and (b) the waiver of usury contained in Section 5.13 of the Base Indenture may be unenforceable; (xvi) The Trust Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except to the extent that enforcement thereof may be limited by (a) bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law); (xvii) The Guarantee has been duly authorized, executed and delivered by the Company, and constitutes a valid and binding agreement of the Company, 20 21 enforceable against the Company in accordance with its terms, except to the extent that enforcement thereof may be limited by (i) bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law); (xviii) Each of the Master Unit Agreement, the Purchase Contracts being delivered at such Time of Delivery and the Pledge Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the other parties thereto, constitutes a valid and legally binding agreement of the Company enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent conveyance, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general principles (whether such principles are considered in a proceeding in equity or in law); the Master Unit Agreement, the Pledge Agreement and the Purchase Contracts conform in all material respects to the descriptions thereof in the Prospectus as amended or supplemented; and (xix) To the best of such counsel's knowledge, the Trust is not a party to or bound by any agreement or instrument other than this Agreement, the Trust Agreement and the agreements and instruments contemplated by the Trust Agreement and described in the Prospectus; and to the best of such counsel's knowledge, there are no legal or governmental proceedings pending to which the Trust is a party or of which any property of the Trust is the subject and no such proceedings are threatened or contemplated by governmental authorities or threatened by others. The foregoing opinions may be limited to the laws of Delaware, Michigan and the federal law of the United States. In giving such opinion, such counsel may rely, as to matters of Delaware law, upon the opinion of Skadden Arps, special Delaware counsel to the Trust and the Company, in which case the opinion shall state that such counsel believes that you and he are entitled to so rely. (d) The opinion or opinions of Skadden Arps, dated as of such Time of Delivery, in form and substance to the effect that: (i) Assuming that:(i) the Pledge Agreement has been duly authorized executed and delivered b the Unit Agent on behalf of each of the Holders from time to time, (ii) the Pledge Agreement constitutes the legal, valid and binding obligation of the Unit Agent on behalf of each Holder and of each other party to such agreement enforceable against the Unit Agent, each Holder and each other party in accordance with its terms; (iii) the Unit Agent and each Holder has full power, authority and legal right (including, without limitation, any legal right dependent upon there being no conflict with laws, governing documents or contracts) to make and perform its obligations under the Pledge Agreement; then such counsel is of the opinion that the provisions of the Pledge Agreement are effective to create, in favor of the Collateral Agent for the benefit of the Company and the Call Option Holder to secure the obligations of the Holders under the Purchase Contracts and the Call Options, a valid security interest in each Holders's rights in the certificates identified on Schedule I to the opinion (the "Pledged Trust Securities"). Upon delivery of the Pledged Trust Securities to the Collateral Agent in the State of New York, the security interest of the Collateral Agent for the benefit of the Company and the Call Option Holder in the Pledged Trust Securities will be perfected. Such opinion will be subject to customary assumptions and qualifications; and (ii) Assuming that the Master Unit Agreement, the Purchase Contract underlying the Units being delivered at such Time of Delivery, and the Pledge Agreement have been duly authorized, executed and delivered by the Company under Michigan law, and subject to the enforce ability of the choice of law provisions thereof, each is a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except as may be limited by the bankruptcy exceptions; provided, however, that based on a review of applicable case law, upon the occurrence of a Termination Event, Section 365 (e)(2) of the Bankruptcy Code (11 U.S.C. ss.ss. 101-1330, as amended) should not substantively limit the provisions of Sections __ and __ of the Master Unit Agreement and Section __ of the Pledge Agreement that require termination of the Purchase Contracts and release of the Collateral Agent's security interest in the Trust Preferred Securities or other Pledged Securities; provided, however, that procedural restrictions respecting relief from the automatic stay under Section 362 of the Bankruptcy Code may affect the timing of the exercise of such rights and remedies. (e) Skadden, Arps, special tax counsel to the Trust and the Company, shall have furnished to the Representatives such opinion or opinions, dated such Time of Delivery, in form and substance satisfactory to the Representatives, to the effect that: (i) The Trust will be classified as a grantor trust and not as an association taxable as a corporation; and (ii) Although the summary set forth in the prospectus included as part of the Registration Statement under the caption "Certain Federal Income Tax consequences" does not purport to discuss all possible United States federal income tax consequences of the purchase, ownership and disposition of the Firm Units such summary is a fair 21 22 and accurate summary of the material aspects of the United States federal income tax treatment, under current law, of an investment in the Firm Units. (f) Skadden Arps, special Delaware counsel to the Trust and the Company, shall have furnished to the Representatives, the Company and the Trust their written opinion or opinions, dated as of such Time of Delivery, in form and substance satisfactory to the Representatives, to the effect that: (i) This Agreement has been duly authorized, executed and delivered by the Trust; (ii) The Trust has been duly created and is validly existing in good standing as a business trust under the Delaware Business Trust Act and has the trust power and authority to conduct its business as described in the Trust Agreement; (iii) The Trust Agreement is a valid and binding agreement of each of the Company and the Trust, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by (a) bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law); (iv) Under the Delaware Business Trust Act and the Trust Agreement, the Trust has the power and authority to (a) execute and deliver, and to perform its obligations pursuant to, this Agreement, and (b) issue and perform its obligations under the Trust Preferred Securities; (v) The execution and delivery by the Trust of this Agreement, and the performance by the Trust of its obligations thereunder, have been duly authorized by all necessary action on the part of the Trust; (vi) The Trust Preferred Securities have been duly authorized for issuance by the Trust and, when executed and authenticated by the Property Trustee in accordance with the terms of the Trust Agreement and delivered and paid for in accordance with this Agreement, will be fully paid and non-assessable undivided beneficial interests in the assets of the Trust and will entitle the holders thereof to the benefits of this Agreement except to the extent that enforcement of the Trust Agreement may be limited by (a) bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law); and the holders of the Trust Preferred Securities 22 23 will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware, except that the holders of Trust Preferred Securities may be obligated, pursuant to the Trust Agreement, to make payments, including (i) to provide indemnity and/or security in connection with and pay taxes or governmental charges arising from transfers of the Trust Preferred Securities and (ii) to provide security and indemnity in connection with requests of or directions to the Property Trustee to exercise its rights and powers under the Trust Agreement; the issuance of the Trust Preferred Securities is not subject to preemptive or other similar rights under the Delaware Business Trust Act or the Trust Agreement; (vii) None of the execution and delivery by the Trust of, or the performance by the Trust of its obligations under, this Agreement, or the issuance and sale of the Trust Preferred Securities by the Trust in accordance with the terms of this Agreement or the consummation of the other transactions contemplated hereby, will contravene any provision of applicable law or the Trust Agreement or any agreement or other instrument governed by the laws of the State of Delaware binding upon the Trust as set forth in the Trust's certificate, or any judgment, order or decree applicable to the Trust as set forth in the Trust's certificate, of any governmental authority; (viii) No governmental approval is required for the issuance and sale of the Trust Preferred Securities and the Trust Common Securities by the Trust pursuant to this Agreement or the consummation of the other transactions contemplated hereby, except such as have been obtained and made; (g) On the date of the Prospectus and also at such Time of Delivery, the independent accountants of the Company who have certified the financial statements of the Company and its consolidated Subsidiaries included or incorporated by reference in the Registration Statement shall have furnished to the Representatives a letter, dated as of such date, (i) confirming that they are independent public accountants within the meaning of the Act and the applicable published rules and regulations of the Commission thereunder, (ii) stating that in their opinion the financial statements examined by them and included or incorporated by reference in the Registration Statement complied as to form in all material respects with the applicable accounting requirements of the Commission, including applicable published rules and regulations of the Commission, and (iii) covering, as of a date not more than five business days prior to the date of such letter, such other matters as the Representatives reasonably request; (h) That, between the date of the execution of this Agreement and such Time of Delivery, no material and adverse change shall have occurred in the business, properties or financial condition of the Company and its Subsidiaries, taken as a whole, which, in the 23 24 judgment of the Representatives, impairs the marketability of the Units (other than changes referred to in or contemplated by the Registration Statement or Prospectus); (i) That, between the date of the execution of this Agreement and such Time of Delivery, there has been no downgrading of the investment ratings of the Company's debt securities or preferred stock by Standard & Poor's Corporation, Moody's Investors Service, Inc. or Duff & Phelps Credit Rating Co., and the Company shall not have been placed on "credit watch" or "credit review" with negative implications by any of such statistical rating organizations if any of such occurrences shall, in the judgment of the Representatives, after reasonable inquiries on the part of the Representatives, impair the marketability of the Units; (j) Each of the Purchase Contracts, the Master Unit Agreement, the Pledge Agreement, the Trust Agreement, the Guarantee and the Indenture shall have been executed and delivered, in each case in a form reasonably satisfactory to the Representatives; (k) The Units shall have been duly listed, subject to notice of issuance, on the New York Stock Exchange; (l) The Company shall have complied with the provisions of Section 4(b) hereof with respect to the furnishing of prospectuses on the New York Business Day next succeeding the date of this Agreement; and (m) The Trust and the Company shall have furnished or caused to be furnished to the Representatives at such Time of Delivery certificates of officers of the Trust and the Company to the effect that to the best of such person's knowledge, information and belief (i) there has been no material adverse change in the business, properties or financial condition of the Company and its Subsidiaries, taken as a whole or the Trust from that set forth in the Registration Statement or Prospectus (other than changes referred to in or contemplated by the Registration Statement or Prospectus), (ii) the representations and warranties of the Trust and the Company herein at and as of the Time of Delivery are true and correct, (iii) the Trust and the Company have complied with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to the Time of Delivery, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or threatened by the Commission. 7. Condition on the Obligations of the Company and the Trust. The obligations of the Company and the Trust shall be subject, in the discretion of the Company and the Trust, to the condition that the Registration Statement shall be effective under the Act and no stop order suspending the effectiveness of the Registration Statement shall have been issued under the Act or proceedings therefor initiated or threatened by the Commission. 24 25 8. Indemnification. (a) The Trust and the Company, jointly and severally, will, to the extent permitted by law, indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that neither the Trust nor the Company shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Units, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Trust and the Company by the Representatives expressly for use in the Prospectus as amended or supplemented relating to the Units or with any statements in or omissions from that part of the Registration Statement that shall constitute the Statements of Eligibility and Qualification under the Trust Indenture Act of the Debenture Trustee, the Guarantee Trustee and the Property Trustee, and except that this indemnity shall not inure to the benefit of any Underwriter (or any person controlling such Underwriter) on account of any losses, claims, damages, liabilities or actions, suits or proceedings arising from the sale of the Units to any person if a copy of the Prospectus, as the same may then be supplemented or amended (excluding, however, any document then incorporated or deemed incorporated therein by reference), was not sent or given by or on behalf of such Underwriter to such person (i) with or prior to the written confirmation of sale involved or (ii) as soon as available after such written confirmation, relating to an event occurring prior to the payment for and delivery to such person of the Units involved in such sale, and the omission or alleged omission or untrue statement or alleged untrue statement was corrected in the Prospectus as supplemented or amended at such time. (b) Each Underwriter, severally and not jointly, will indemnify and hold harmless the Trust and the Company against any losses, claims, damages or liabilities to which the Trust and the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Units, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each 25 26 case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Trust and the Company by Underwriter through the Representatives expressly for use therein; and will reimburse the Trust and the Company for any legal or other expenses reasonably incurred by the Trust and the Company in connection with investigating or defending any such action or claim as such expenses are incurred. (c) If a claim is made or an action, suit or proceeding (including governmental investigations) is commenced or threatened against any person as to which indemnity may be sought under subsection (a) or (b), such person (the "Indemnified Person") shall notify the person against whom such indemnity may be sought (the "Indemnifying Person"), promptly after any assertion of such claim threatening to institute an action, suit or proceeding or if such an action, suit or proceeding is commenced against such Indemnified Person, promptly after such Indemnified Person shall have been served with a summons or other first legal process, giving information as to the nature and basis of the claim. Failure to so notify the Indemnifying Person shall not, however, relieve the Indemnifying Person from any liability which it may have on account of the indemnity under subsection (a) or (b) if the Indemnifying Person has not been prejudiced in any material respect by such failure. Subject to the immediately succeeding sentence, the Indemnifying Person shall assume the defense of any such litigation or proceeding, including the employment of counsel and the payment of all expenses, with such counsel being designated, subject to the immediately succeeding sentence, in writing by the Representatives in the case of parties indemnified pursuant to subsection (b) and by the Company in the case of parties indemnified pursuant to subsection (a). Any Indemnified Person shall have the right to participate in such litigation or proceeding and to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include (x) the Indemnifying Person and (y) the Indemnified Person and, in the written opinion of counsel to such Indemnified Person, representation of both parties by the same counsel would be inappropriate due to actual or likely conflicts of interest between them, in either of which cases the reasonable fees and expenses of counsel (including disbursements) for such Indemnified Person shall be reimbursed by the Indemnifying Person to the Indemnified Person. If there is a conflict as described in clause (ii) above, and the Indemnified Persons have participated in the litigation or proceeding utilizing separate counsel whose fees and expenses have been reimbursed by the Indemnifying Person and the Indemnified Persons, or any of them, are found to be solely liable, such Indemnified Persons shall repay to the Indemnifying Person such fees and expenses of such separate counsel as the Indemnifying Person shall have reimbursed. It is understood that the Indemnifying Person shall not, in connection with any litigation or proceeding or related litigation or proceedings in the same jurisdiction as to which the Indemnified Persons are entitled to such separate representation, be liable under this Agreement for the reasonable fees and out-of-pocket expenses for more than one separate firm (together with not more than one appropriate local counsel) for all such Indemnified Persons. Subject to the next paragraph, 26 27 all such fees and expenses shall be reimbursed by payment to the Indemnified Persons of such reasonable fees and expenses of counsel promptly after payment thereof by the Indemnified Persons. In furtherance of the requirement above that fees and expenses of any separate counsel for the Indemnified Persons shall be reasonable, the Representatives and the Company agree that the Indemnifying Person's obligations to pay such fees and expenses shall be conditioned upon the following: (i) in case separate counsel is proposed to be retained by the Indemnified Persons pursuant to clause (ii) of the preceding paragraph, the Indemnified Persons shall in good faith fully consult with the Indemnifying Person in advance as to the selection of such counsel; (ii) reimbursable fees and expenses of such separate counsel shall be detailed and supported in a manner reasonably acceptable to the Indemnifying Person (but nothing herein shall be deemed to require the furnishing to the Indemnifying Person of any information, including without limitation, computer print-outs of lawyers' daily time entries, to the extent that, in the judgment of such counsel, furnishing such information might reasonably be expected to result in a waiver of any attorney-client privilege); and (iii) the Company and the Representatives shall cooperate in monitoring and controlling the fees and expenses of separate counsel for Indemnified Persons for which the Indemnifying Person is liable hereunder, and the Indemnified Person shall use every reasonable effort to cause such separate counsel to minimize the duplication of activities as between themselves and counsel to the Indemnifying Person. The Indemnifying Person shall not be liable for any settlement of any litigation or proceeding effected without the written consent of the Indemnifying Person, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees, subject to the provisions of this Section 8, to indemnify the Indemnified Person from and against any loss, damage, liability or expenses by reason of such settlement or judgment. The Indemnifying Person shall not, without the prior written consent of the Indemnified Persons, effect any settlement of any pending or threatened litigation, proceeding or claim in respect of which indemnity has been properly sought by the Indemnified Persons hereunder, unless such settlement includes an unconditional release by the claimant of all Indemnified Persons from all liability with respect to claims which are the subject matter of such litigation, proceeding or claim. (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a 27 28 result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Trust and the Company on the one hand and the Underwriters on the other from the offering of the Units. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above and such failure resulted in the indemnifying party being prejudiced in a material way, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Trust and the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Trust and the Company on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Trust and the Company bear to the total placement fees received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Trust and the Company on the one hand or such Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Trust, the Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim, provided that the provisions of subsection (c) have been complied with (in all material respects) in respect of any separate counsel for such indemnified party. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount greater than the excess of (i) the total price at which the Units placed by it and distributed to the public were offered to the public over (ii) the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters in this subsection (d) to contribute are several in proportion to their respective placement fees and not joint. (e) The obligations of the Trust and the Company under this Section 8 shall be in addition to any liability which the Trust and the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Agents under this Section 8 shall be in addition to any liability which the respective Agents may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company, each Administrative Trustee under the Trust 28 29 Agreement and to each person, if any, who controls the Trust and the Company within the meaning of the Act. 9. Survival. The respective indemnities, agreements, representations, warranties and other statements of the Trust and the Company and the several Agents, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Trust, the Company, or any officer, director, Administrative Trustee or controlling person of the Trust or the Company, and shall survive delivery of and payment for the Units. 10. Termination. (a) This Agreement may be terminated at any time prior to such Time of Delivery by the Representatives if, prior to such time, any of the following events shall have occurred: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (ii) a suspension or material limitation in trading in the Company's securities on the New York Stock Exchange; (iii) a general moratorium on commercial banking activities declared by either Federal or New York State authorities; or (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect of any such event specified in this Clause (iv) in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities on the terms and in the manner contemplated in the Prospectus. (b) If the Representatives elect to terminate this Agreement, as provided in this Section 10, the Representatives will promptly notify the Company and each other Underwriter by telephone or telecopy, confirmed by letter. If this Agreement shall not be carried out by any Underwriter for any reason permitted hereunder, or if the sale of the Units to the Underwriters as herein contemplated shall not be carried out because the Company is not able to comply with the terms hereof, the Company shall not be under any obligation under this Agreement and shall not be liable to any Underwriter or to any member of any selling group for the loss of anticipated profits from the transactions contemplated by this Agreement and Underwriters shall be under no liability to the Company nor be under any liability under this Agreement to one another. (c) Notwithstanding the foregoing, the provisions of Sections 5 and 8 shall survive any termination of this Agreement. 11. Notices. All notices hereunder shall, unless otherwise expressly provided, be in writing and be delivered at or mailed to the following addresses or be sent by telecopy as follows: if to the Underwriters or the Representatives, to the Representatives at the address or number, as appropriate, designated in Schedule I hereto, and, if to the Company, to CMS Energy Corporation, Fairlane Plaza South, Suite 1100, 330 Town Center Drive, Dearborn, Michigan 48126, attention: Alan M. Wright, Senior Vice President and Chief Financial Officer. 29 30 12. Parties in Interest. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Trust, the Company and, to the extent provided in Sections 8 and 9 hereof, the officers, directors and administrative trustees of the Trust, the Company and each person who controls the Trust, the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Units from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 13. Time of the Essence. Time shall be of the essence of this Agreement. 14. Definition of Certain Terms. The term "Underwriters," as used herein, shall be deemed to mean the several persons, firms or corporations, named in Schedule II hereto (including the Representatives herein mentioned, if so named), and the term "Representatives," as used herein, shall be deemed to mean the Representatives or Representatives designated by, or in the manner authorized by, the Underwriters in Schedule I hereto. All obligations of the Underwriters hereunder are several and not joint. If there shall be only one person, firm or corporation named in Schedule I and Schedule II hereto, the term "Underwriters" and the term "Representatives," as used herein, shall mean such person, firm or corporation. If the firm or firms listed in Schedule I hereto are the same as the firm or firms listed in Schedule II hereto, then the terms "Underwriters" and "Representatives," as used herein, shall each be deemed to refer to such firm or firms. The term "successors" as used in this Agreement shall not include any purchaser, as such purchaser, of any of the Units from any of the respective Underwriters. 15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 16. Counterparts. This Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. 30 31 If the foregoing is in accordance with your understanding, please sign and return to us one for the Trust, the Company, each of the Underwriters and each of the Representatives plus one for each counsel counterparts hereof. Very truly yours, CMS ENERGY TRUST II By: --------------------------------- Alan M. Wright Administrative Trustee CMS ENERGY CORPORATION By: --------------------------------- Alan M. Wright Senior Vice President, Chief Financial Officer and Treasurer Accepted as of the date hereof: SALOMON SMITH BARNEY, INC. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION BANC OF AMERICA SECURITIES LLC As Representatives of the several Underwriters named in Schedule II hereto By: SALOMON SMITH BARNEY INC. By: ------------------------------------------- Name: Title: Authorized Signatory 31 32 SCHEDULE I REPRESENTATIVES: 32 33 SCHEDULE II
NUMBER OF OPTIONAL UNITS NUMBER OF FIRM UNITS TO BE PURCHASED IF UNDERWRITERS TO BE PURCHASED MAXIMUM OPTION EXERCISED ------------ --------------- ------------------------ Salomon Smith Barney Inc. Donaldson Lufkin & Jenrette Securities Corporation Banc of America LLC ======================== ========================= Total.....................
EX-4.(T) 3 FORM OF MASTER UNIT AGREEMENT 1 EXHIBIT 4(t) ================================================================================ CMS ENERGY CORPORATION AND THE BANK OF NEW YORK as Unit Agent --------------------------- MASTER UNIT AGREEMENT --------------------------- Dated as of July , 1999 ================================================================================ 2 TABLE OF CONTENTS
Page ---- RECITALS ...........................................................................................1 WITNESSETH..........................................................................................1 ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.................................................................1 SECTION 1.01 Definitions....................................................................1 SECTION 1.02 Compliance Certificates and Opinions..........................................10 SECTION 1.03 Form of Documents Delivered to Unit Agent.....................................11 SECTION 1.04 Acts of Holders; Record Dates.................................................11 SECTION 1.05 Notices, etc. to Unit Agent and the Company...................................13 SECTION 1.06 Notice to Holders; Waiver.....................................................14 SECTION 1.07 Effect of Headings and Table of Contents......................................14 SECTION 1.08 Successors and Assigns........................................................14 SECTION 1.09 Separability Clause...........................................................14 SECTION 1.10 Benefits of Agreement.........................................................15 SECTION 1.11 Governing Law.................................................................15 SECTION 1.12 Legal Holidays................................................................15 SECTION 1.13 Counterparts..................................................................16 SECTION 1.14 Inspection of Agreement.......................................................16 ARTICLE II UNIT CERTIFICATE FORMS................................................................16 SECTION 2.01 Forms of Unit Certificates Generally..........................................16 SECTION 2.02 Form of Unit Agent's Certificate of Authentication................................................................17 ARTICLE III THE UNITS.............................................................................17 SECTION 3.01 Title and Terms; Denominations................................................17 SECTION 3.02 Rights and Obligations Evidenced by the Unit Certificates..................................................................18 SECTION 3.03 Execution, Authentication, Delivery and Dating................................18 SECTION 3.04 Temporary Unit Certificates...................................................19 SECTION 3.05 Registration; Registration of Transfer and Exchange......................................................................20 SECTION 3.06 Mutilated, Destroyed, Lost and Stolen Unit Certificates..................................................................22
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Page ---- SECTION 3.07 Persons Deemed Owners.........................................................23 SECTION 3.08 Cancellation..................................................................24 SECTION 3.09 Substitution of Pledged Securities and Creation of Stripped Units; Units Not Otherwise Separable................................25 SECTION 3.10 Payments on the Units.........................................................27 ARTICLE IV THE PLEDGED SECURITIES................................................................28 SECTION 4.01 INTENTIONALLY LEFT BLANK......................................................28 SECTION 4.02 Transfer of Pledged Securities Upon Occurrence of Termination Event..........................................................28 ARTICLE V THE PURCHASE CONTRACTS................................................................29 SECTION 5.01 Purchase of Shares of Common Stock............................................29 SECTION 5.02 Contract Payments.............................................................31 SECTION 5.03 Deferral of Payment Dates For Contract Payment................................31 SECTION 5.04 Payment of Purchase Price.....................................................33 SECTION 5.05 Issuance of Shares of Common Stock............................................35 SECTION 5.06 Adjustment of Settlement Rate.................................................36 SECTION 5.07 Notice of Adjustments and Certain Other Events................................42 SECTION 5.08 No Fractional Shares..........................................................43 SECTION 5.09 Charges and Taxes.............................................................43 SECTION 5.10 Termination Event; Notice.....................................................44 ARTICLE VI REMEDIES..............................................................................44 SECTION 6.01 Unconditional Rights of Holders...............................................44 SECTION 6.02 Restoration of Rights and Remedies............................................45 SECTION 6.03 Rights and Remedies Cumulative................................................45 SECTION 6.04 Delay or Omission Not Waiver..................................................45 SECTION 6.05 Undertaking for Costs.........................................................45 SECTION 6.06 Waiver of Stay or Extension Laws..............................................46 ARTICLE VII THE UNIT AGENT........................................................................46 SECTION 7.01 Certain Duties and Responsibilities...........................................46 SECTION 7.02 Notice of Default.............................................................47 SECTION 7.03 Certain Rights of Unit Agent..................................................47 SECTION 7.04 Not Responsible for Recitals or Issuance of Units.............................49 SECTION 7.05 May Hold Units................................................................49 SECTION 7.06 Money Held in Trust...........................................................49
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Page ---- SECTION 7.07 Compensation and Reimbursement................................................49 SECTION 7.08 Corporate Unit Agent Required; Eligibility....................................50 SECTION 7.09 Resignation and Removal; Appointment of Successor.....................................................................50 SECTION 7.10 Acceptance of Appointment by Successor........................................52 SECTION 7.11 Merger, Conversion, Consolidation or Succession to Business...................................................................52 SECTION 7.12 Preservation of Information; Communications to Holders.......................................................................53 SECTION 7.13 No Obligations of Unit Agent..................................................53 SECTION 7.14 Tax Compliance................................................................54 ARTICLE VIII SUPPLEMENTAL AGREEMENTS...............................................................54 SECTION 8.01 Supplemental Agreements Without Consent of Holders.......................................................................54 SECTION 8.02 Supplemental Agreements with Consent of Holders.......................................................................55 SECTION 8.03 Execution of Supplemental Agreements..........................................57 SECTION 8.04 Effect of Supplemental Agreements.............................................57 SECTION 8.05 Reference to Supplemental Agreements..........................................57 ARTICLE IX CONSOLIDATION, MERGER, SALE OR CONVEYANCE............................................................................58 SECTION 9.01 Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under Certain Conditions....................................................................58 SECTION 9.02 Rights and Duties of Successor Corporation....................................58 SECTION 9.03 Opinion of Counsel to Unit Agent..............................................59 ARTICLE X COVENANTS.............................................................................59 SECTION 10.01 Performance Under Purchase Contracts..........................................59 SECTION 10.02 Maintenance of Office or Agency...............................................59 SECTION 10.03 Company to Reserve Common Stock...............................................60 SECTION 10.04 Covenants as to Common Stock..................................................60 SECTION 10.05 Statements of Officers of the Company as to Default.......................................................................60 EXHIBIT A FORM OF NORMAL UNIT CERTIFICATE......................................................A-1
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Page ---- SETTLEMENT INSTRUCTIONS...........................................................................A-6 FORM OF TRUST PREFERRED SECURITIES CERTIFICATE - FORM OF FACE OF SECURITY ....................................................................AA-1 REQUEST TO CREATE STRIPPED UNITS..................................................................A-7 EXHIBIT B FORM OF STRIPPED UNIT CERTIFICATE....................................................B-1 SETTLEMENT INSTRUCTIONS...........................................................................B-6 PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION.................................................AA-4 FORM OF REVERSE OF SECURITY......................................................................AA-5 ASSIGNMENT.......................................................................................AA-7 NOTICE TO REQUIRE EXERCISE OF JUNIOR SUBORDINATED DEBENTURE PUT OPTION....................................................................AA-8
iv 6 MASTER UNIT AGREEMENT, dated as of July , 1999, between CMS Energy Corporation, a Michigan corporation (the "Company"), and The Bank of New York, acting as unit agent for the Holders of Units from time to time (the "Unit Agent"). RECITALS The Company has duly authorized the execution and delivery of this Agreement and the Unit Certificates evidencing the Units. All things necessary to make the Company's obligations under the Units, when the Unit Certificates are executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Unit Agent, as in this Agreement provided, the valid obligations of the Company, and to constitute these presents a valid agreement of the Company, in accordance with its terms, have been done. WITNESSETH: For and in consideration of the premises and the purchase of the Units by the Holders thereof, it is mutually agreed as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 1.01 Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; and (b) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. "Act" has the meaning specified in Section 1.04. 7 "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "con trolled" have meanings correlative to the foregoing. "Agreement" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof. "Aggregate Consideration Deliverable on Exercise of the Call Options" has the meaning set forth in the Call Option Agreement. "Applicable Market Value" has the meaning specified in Section 5.01. "Board of Directors" means the board of directors of the Company or a duly authorized committee of that board. "Board Resolution" means one or more resolutions of the Board of Directors, a copy of which has been certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification and delivered to the Unit Agent. "Business Day" means any day that is not a Saturday, Sunday or a day on which banking institutions in The City of New York are authorized or obligated by law or executive order to be closed. "Call Option" means an option entitling the Call Option Holder to acquire the Trust Preferred Securities or Junior Subordinated Debentures underlying the related Normal Unit on the terms and subject to the conditions set forth in the Call Option Agreement. "Call Option Agreement" means the Call Option Agreement, dated as of the date hereof, between the Call Option Holder named therein and the Unit Agent, in its capacity as Unit Agent and as attorney-in-fact for the Holders from time to time of the Normal Units, the form of which is attached hereto as Exhibit C, as the same may be amended from time to time in accordance with the terms hereof and thereof. 2 8 "Call Option Expiration Date" means , 2002 (or, if such date is not a Business Day, the next succeeding Business Day). "Call Option Holder" means the Person named as the Call Option Holder in the Call Option Agreement. "Call Settlement Date" means the date on which the Call Options are settled pursuant to the Call Option Agreement. "Closing Price" has the meaning specified in Section 501. "Collateral Agent" means Chase Manhattan Bank, as Collateral Agent under the Pledge Agreement, until a successor Collateral Agent shall have become such pursuant to the applicable provisions of the Pledge Agreement, and thereafter "Collateral Agent" shall mean the Person who is then the Collateral Agent thereunder. "Common Stock" means the Common Stock, $.01 par value per share, of the Company. "Company" means the Person designated as the "Company" in the first paragraph of this instrument until a successor shall have become such, and thereafter "Company" shall mean such successor. "Contract Payment" means, with respect to each Purchase Contract, a fee payable by the Company to the Holder of the related Unit, accruing on the Stated Amount of such Unit from and including the date of first issuance of any Units to but excluding the Stock Purchase Date and payable quarterly in arrears on each Quarterly Payment Date to and including the Stock Purchase Date at a rate per annum equal to the Contract Payment Rate (and computed on the basis of a 360-day year of twelve 30-day months), plus any additional fees accrued thereon pursuant to Section 503. "Contract Payment Rate" means ______%. "Corporate Trust Office" means the principal office of the Unit Agent in the Borough of Manhattan, The City of New York, at which at any particular time its corporate trust business shall be administered, which office at the date hereof is located at _________ ____________, New York, New York ______. "Current Market Price" has the meaning specified in Section 506(a)(8). 3 9 "Declaration" means the Declaration of Trust, dated as of ___________ and amended and restated as of the date hereof, executed by the Administrators, the Sponsor and the Trustees of the Trust, as the same may be amended or supplemented from time to time in accordance with the terms thereof. "Deferral Rate" means ____% per annum and, for the period after the Call Option Expiration Date, the Reset Rate. "Depositary" means a clearing agency registered under the Exchange Act that is designated to act as Depositary for Global Units as contemplated by Section 3.05. "Exchange Act" means the Securities Exchange Act of 1934 or any statute successor thereto, in each case as amended from time to time. "Expiration Date" has the meaning specified in Section 1.04. "Floor Price" has the meaning specified in Section 5.01. "Global Unit Certificate" means a Unit Certificate that evidences all or part of the Normal Units or a Unit Certificate that evidences all or a part of the Stripped Units and is registered in the name of the Depositary or a nominee thereof. "Holder" means a Person in whose name a Unit Certificate is registered in the Unit Register; "Holder", when used with respect to any particular Unit Certificate (or Unit), means a Person in whose name such Unit Certificate (or the Unit Certificate evidencing such Unit) is registered in the relevant Unit Register. "Indenture" means the Indenture, dated as of the date hereof, between the Company and The Bank of New York, as Trustee, as the same may be amended or supplemented from time to time in accordance with the terms thereof. "Issuer Order" or "Issuer Request" means a written order or request signed in the name of the Company by its Chairman of the Board, any Vice Chairman, its President or a Vice President and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Unit Agent. "Junior Subordinated Debenture Put Option" has the meaning specified for the term "Put Option" in the Indenture. 4 10 "Junior Subordinated Debentures" means the _____% Junior Subordinated Deferrable Interest Debentures due , 2004 of the Company issued under the Indenture. "Normal Unit" means the rights to purchase Common Stock under a Purchase Contract, together with ownership of the Trust Preferred Securities or other Pledged Securities pledged to secure the obligations referred to in (a) and (b) below, subject to (a) the obligations owed to the Company under such Purchase Contract, (b) for so long as any Call Options remain exercisable, the obligations owed to the Call Option Holder under a Call Option and (c) the pledge arrangements securing the foregoing obligations; provided, however, that the term "Normal Unit" will not include any Stripped Unit. "NYSE" has the meaning specified in Section 501. "Officers' Certificate" means a certificate signed by the Chairman of the Board, any Vice Chairman, the President or any Vice President and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company and delivered to the Unit Agent. "Opinion of Counsel" means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company. "Outstanding Unit Certificates" means, as of the date of determination, all Unit Certificates theretofore authenticated, executed and delivered pursuant to this Agreement, except: (a) Unit Certificates theretofore canceled by the Unit Agent or delivered to the Unit Agent for cancellation; and (b) Unit Certificates in exchange for or in lieu of which other Unit Certificates have been authenticated, executed on behalf of the Holder and delivered pursuant to this Agreement, other than any such Unit Certificate in respect of which there shall have been presented to the Unit Agent proof satisfactory to it that such Unit Certificate is held by a bona fide purchaser in whose hands the Units evidenced by such Unit Certificate are valid obligations of the Company. "Outstanding Units" means, as of the date of determination, all Units evidenced by then Outstanding Unit Certificates, except, on or after the Termination Date or Stock Purchase Date, Units for which the underlying Pledged Securities or 5 11 the Common Stock purchasable upon settlement of the underlying Purchase Contracts, as the case may be, have been theretofore deposited with the Unit Agent in trust for the Holders of such Units; provided, however, that in determining whether the Holders of the requisite number of Units have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Units owned by the Company or any Affiliate of the Company shall be disregarded and deemed not to be outstanding, except that, in determining whether the Unit Agent shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Units which the Unit Agent actually knows to be so owned shall be so disregarded. Units so owned which have been pledged in good faith may be regarded as Outstanding Units if the pledgee establishes to the satisfaction of the Unit Agent the pledgee's right so to act with respect to such Units and that the pledgee is not the Company or any Affiliate of the Company. "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Pledge" means the pledge of the Pledged Securities under the Pledge Agreement. "Pledge Agreement" means the Pledge Agreement, dated as of the date hereof, among the Company, the Call Option Holder, the Collateral Agent and the Unit Agent, in its capacity as Unit Agent and as attorney-in-fact for the Holders from time to time of the Units, the form of which is attached hereto as Exhibit D, as the same may be amended from time to time in accordance with the terms hereof and thereof. "Pledged Securities" means the securities pledged to the Collateral Agent pursuant to the Pledge and constituting a part of the Units. "Predecessor Unit Certificate" of any particular Unit Certificate means every previous Unit Certificate evidencing all or a portion of the rights and obligations of the Holder under the Units evidenced thereby; and, for the purposes of this definition, any Unit Certificate authenticated and delivered under Section 3.06 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Unit Certificate shall be deemed to evidence the same rights and obligations of the Holder as the mutilated, destroyed, lost or stolen Unit Certificate. 6 12 "Present Value" shall have the meaning set forth in the Pledge Agreement. "Principal Agreements" means this Agreement, the Pledge Agreement and the Call Option Agreement. "Purchase Contract" means a contract obligating the Company to sell and the Holder of the related Unit to purchase Common Stock on the terms and subject to the conditions set forth in Article Five hereof. "Purchase Contract Settlement Fund" has the meaning specified in Section 5.05. "Purchased Shares" has the meaning specified in Section 5.06(a)(6). "Quarterly Payment Date" means each _________, _________, ________ and __________, commencing _________. "Record Date", when used with respect to any payment date, means the Business Day next preceding such payment date; provided, however, that if any Units are no longer evidenced by a Global Unit Certificate, "Record Date", when used with respect to any payment date for such Units, means the [first day of] [fifteenth day of] [fifteenth day of the month preceding] the month in which such payment date falls; and provided further, that if payments are in respect of Trust Preferred Securities or Junior Subordinated Debentures underlying Normal Units, "Record Date", when used with respect to such payments, means the record date for such payments determined as provided under the Declaration or the Indenture, as the case may be. "Reorganization Event" has the meaning specified in Section 5.06(b). "Responsible Officer", when used with respect to the Unit Agent, means any vice president, any assistant vice president, any assistant secretary, any assistant treasurer, any trust officer or assistant trust officer, or any other officer or assistant officer of the Unit Agent customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Settlement Rate" has the meaning specified in Section 5.01. "Stated Amount" means $_____ per Unit. 7 13 "Stock Purchase Date" means ___________. "Stripped Unit" means the rights to purchase Common Stock under a Purchase Contract, together with ownership of the Treasury Securities pledged to secure the obligations referred to in (a) below, subject to (a) the obligations owed to the Company under such Purchase Contract and (b) the pledge arrangements securing the foregoing obligations; provided, however, that the term "Stripped Unit" will only include Units issued as a result of a Stripped Unit Creation as contemplated by Section 309. "Stripped Unit Creation" has the meaning specified in Section 309(a). "Termination Date" means the date, if any, on which a Termination Event occurs. "Termination Event" means the occurrence of any of the following events at any time on or prior to the Stock Purchase Date: (a) a decree or order of a court having jurisdiction in the premises shall have been entered adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization of the Company under the United States Bankruptcy Code or any other similar applicable Federal or State law, and, unless such decree or order shall have been entered within 60 days prior to the Stock Purchase Date, such decree or order shall have continued undischarged and unstayed for a period of 60 days, or (b) a decree or order of a court having jurisdiction in the premises for the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the Company or of its property, or for the winding up or liquidation of its affairs, shall have been entered, and, unless such decree or order shall have been entered within 60 days prior to the Stock Purchase Date, such decree or order shall have continued undischarged and unstayed for a period of 60 days, or (c) the Company shall institute proceedings to be adjudicated a bankrupt, or shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization under the United States Bankruptcy Code or any other similar applicable Federal or State law, or shall consent to the filing of any such petition, or shall consent to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or of its property, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due. "Threshold Appreciation Price" has the meaning specified in Section 5.01. 8 14 "TIA" means the Trust Indenture Act of 1939 or any statute successor thereto, in each case as amended from time to time. "Trading Day" has the meaning specified in Section 5.01. "Treasury Securities" means United States Treasury Securities. "Trust" means AmerUs Capital II, a statutory business trust created under the laws of the State of Delaware. "Trust Preferred Securities"(sm) means _____% Trust Preferred Securities of the Trust issued under the Declaration, which term may refer to a single security or more than one security as the context may require. "Underwriting Agreement" means the Underwriting Agreement dated __________ among the Company, the Trust and Salomon Smith Barney Inc. and Donaldson, Lufkin & Jenrette Securities Corporation, as the Underwriters named therein. "Unit Agent" means the Person named as the "Unit Agent" in the first paragraph of this Agreement until a successor Unit Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter "Unit Agent" shall mean the Person who is then the Unit Agent hereunder. "Unit Certificate" means a certificate evidencing the rights and obligations of a Holder in respect of the number of Normal Units or Stripped Units, as the case may be, specified on such certificate. "Unit Register" and "Unit Registrar" have the respective meanings specified in Section 305. "Units" means the Normal Units and, if any are issued, the Stripped Units. The Purchase Contracts, Call Options and/or Pledged Securities constituting a part of any Units are sometimes referred to herein as "underlying" such Units and are sometimes herein said to "underlie" such Units. "Vice President" means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president". 9 15 SECTION 1.02 Compliance Certificates and Opinions. Except as otherwise expressly provided by this Agreement, upon any application or request by the Company to the Unit Agent to take any action under any provision of this Agreement, the Company shall furnish to the Unit Agent at the Unit Agent's request (i) an Officers' Certificate stating that all conditions precedent, if any, provided for in this Agreement relating to the proposed action have been complied with and/or (ii) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Agreement relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Agreement shall include: (a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 1.03 Form of Documents Delivered to Unit Agent. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. 10 16 Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Agreement, they may, but need not, be consolidated and form one instrument. SECTION 1.04 Acts of Holders; Record Dates. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Agreement to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Unit Agent and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Agreement and (subject to Section 7.01) conclusive in favor of the Unit Agent and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Unit Agent deems sufficient. 11 17 (c) The ownership of Units shall be proved by the Unit Register. (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Unit shall bind every future Holder of the same Unit and the Holder of every Unit Certificate evidencing such Unit issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Unit Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Unit Certificate. (e) The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Units entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Agreement to be given, made or taken by Holders of Units. If any record date is set pursuant to this paragraph, the Holders of Outstanding Units on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite number of Outstanding Units on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite number of Outstanding Units on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Unit Agent in writing and to each Holder of Units in the manner set forth in Section 1.06. With respect to any record date set pursuant to this Section, the Company may designate any date as the "Expiration Date" and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the Unit Agent in writing, and to each Holder of Units in the manner set forth in Section 1.06, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the Company shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration 12 18 Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date. SECTION 1.05 Notices, etc. to Unit Agent and the Company. Any request, demand, authorization, direction, notice, consent, waiver or other Act of Holders or other document provided or permitted by this Agreement to be made upon, given or furnished to, or filed with, (a) the Unit Agent by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered or mailed, first-class postage prepaid, to the Unit Agent at ______________, Attention: ______________ or at any other address previously furnished in writing by the Unit Agent to the Holders and the Company, or (b) the Company by the Unit Agent or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered or mailed, first-class postage prepaid, to the Company at Fairlane Plaza South, Suite 1100, 330 Town Center Drive, Dearborn, Michigan 48126, Attention, General Counsel, or at any other address previously furnished in writing by the Company to the Unit Agent and the Holders. SECTION 1.06 Notice to Holders; Waiver. Where this Agreement provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Unit Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Agreement provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Unit Agent, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. 13 19 In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Unit Agent shall constitute a sufficient notification for every purpose hereunder. SECTION 1.07 Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 1.08 Successors and Assigns. All covenants and agreements in this Agreement by the Company shall bind its successors and assigns, whether so expressed or not. SECTION 1.09 Separability Clause. In case any provision in this Agreement or in the Units shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof and thereof shall not in any way be affected or impaired thereby. SECTION 1.10 Benefits of Agreement. Nothing in this Agreement or in the Unit Certificates, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefits or any legal or equitable right, remedy or claim under this Agreement. The Holders from time to time shall be beneficiaries of this Agreement and shall be bound by all of the terms and conditions hereof and of the Units evidenced by their Unit Certificates by their acceptance of delivery thereof. SECTION 1.11 Governing Law. THIS AGREEMENT AND THE UNITS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. 14 20 SECTION 1.12 Legal Holidays. In any case where any Quarterly Payment Date or the Stock Purchase Date shall not be a Business Day, then (notwithstanding any other provision of this Agreement or of the Units) payment in respect of distributions or interest on or principal of Pledged Securities or Contract Payments shall not be made, Purchase Contracts shall not be performed and other actions described herein shall not occur, but such payments shall be made, the Purchase Contracts shall be performed and such other actions shall occur, as applicable, on the next succeeding Business Day with the same force and effect as if made on such Quarterly Payment Date or Stock Purchase Date, as the case may be; provided, that to the extent such payment is made on the next succeeding Business Day, no distributions or interest shall accrue or be payable by the Company or any Holder for the period from and after any such Quarterly Payment Date or Stock Purchase Date, as the case may be, to the date of payment or performance; except that if such next succeeding Business Day is in the next succeeding calendar year, such payment shall be made, the Purchase Contracts shall be performed or such other action shall occur on the immediately preceding Business Day with the same force and effect as if made on such Quarterly Payment Date or the Stock Purchase Date. SECTION 1.13 Counterparts. This Agreement may be executed in any number of counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. SECTION 1.14 Inspection of Agreement. A copy of this Agreement shall be available at all reasonable times at the Corporate Trust Office for inspection by any Holder. ARTICLE II UNIT CERTIFICATE FORMS SECTION 2.01 Forms of Unit Certificates Generally. Unit Certificates evidencing Normal Units shall be in substantially the form set forth in Exhibit A hereto and Unit Certificates evidencing the Stripped Units shall be in substantially the form of Exhibit B hereto, in each case with such letters, numbers or other marks of identification or designation and such legends or endorsements 15 21 printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the Units are listed or Depositary therefor, or as may, consistently herewith, be determined by the officers of the Company executing such Unit Certificates, as evidenced by their execution of the Unit Certificates. The definitive Unit Certificates shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers of the Company executing the Unit Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof. Every Global Unit Certificate authenticated, executed and delivered hereunder shall bear a legend in substantially the following form: THIS UNIT CERTIFICATE IS A GLOBAL UNIT CERTIFICATE WITHIN THE MEANING OF THE MASTER UNIT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS UNIT CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A UNIT CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS UNIT CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE MASTER UNIT AGREEMENT. SECTION 2.02 Form of Unit Agent's Certificate of Authentication. The form of the Unit Agent's certificate of authentication of the Units shall be in substantially the form set forth on the form of the Unit Certificates. ARTICLE III THE UNITS SECTION 3.01 Title and Terms; Denominations. The aggregate number of Units evidenced by Unit Certificates authenticated, executed on behalf of the Holders and delivered hereunder is limited to __________ [(subject to increase up to a maximum of ___________ to the extent the over-allotment option of the underwriters under the Underwriting Agreement is exercised)], 16 22 except for Unit Certificates authenticated, executed and delivered upon registration of transfer of, in exchange for, or in lieu of, other Unit Certificates pursuant to Section 3.04, 3.05, 3.06 or 8.05. All of the Unit Certificates authenticated, executed and delivered hereunder shall be Normal Units except for any Unit Certificates evidencing Stripped Units issued in connection with a Stripped Unit Creation pursuant to Section 3.09 and Unit Certificates authenticated, executed and delivered upon registration of transfer of, in exchange for, or in lieu of, other Unit Certificates evidencing Stripped Units pursuant to Section 3.04, 3.05, 3.06 or 8.05. Unit Certificates shall be issuable only in registered form and only in denominations of a single Unit and any integral multiple thereof. SECTION 3.02 Rights and Obligations Evidenced by the Unit Certificates. Each Unit Certificate shall evidence the number of Units specified therein. Prior to the purchase, if any, of shares of Common Stock under the Purchase Contracts, the Units shall not entitle the Holders to any of the rights or privileges of a holder of shares of Common Stock by virtue of holding such Units, including, without limitation, the right to vote or receive any dividends or other distributions or to consent or to receive notice as stockholders in respect of the meetings of stockholders or for the election of directors of the Company or for any other matter. SECTION 3.03 Execution, Authentication, Delivery and Dating. Subject to the provisions of Section 3.09 hereof, upon the execution and delivery of this Agreement, and at any time and from time to time thereafter, the Company may deliver Unit Certificates executed by the Company to the Unit Agent for authentication, execution on behalf of the Holders and delivery, together with its Issuer Order for authentication of such Unit Certificates, and the Unit Agent in accordance with such Issuer Order shall authenticate, execute on behalf of the Holders and make such Unit Certificates available for delivery. The Unit Certificates shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President or one of its Vice Presidents, under its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Unit Certificates may be manual or facsimile. 17 23 Unit Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Unit Certificates or did not hold such offices at the date of such Unit Certificates. Each Unit Certificate shall be dated the date of its authentication. No Purchase Contract or Call Option underlying a Unit evidenced by a Unit Certificate shall be valid until such Unit Certificate has been executed on behalf of the Holder by the manual signature of an authorized signatory of the Unit Agent, as such Holder's attorney-in-fact. Such signature by an authorized signatory of the Unit Agent shall be conclusive evidence that the Holder of such Unit Certificate has entered into the Purchase Contracts and Call Options underlying the Units evidenced by such Unit Certificate. No Unit Certificate shall be entitled to any benefit under this Agreement or be valid or obligatory for any purpose unless there appears on such Unit Certificate a certificate of authentication substantially in the form provided for herein executed by an authorized signatory of the Unit Agent by manual signature, and such certificate upon any Unit Certificate shall be conclusive evidence, and the only evidence, that such Unit Certificate has been duly authenticated and delivered hereunder. SECTION 3.04 Temporary Unit Certificates. Pending the preparation of definitive Unit Certificates, the Company shall execute and deliver (together with an Issuer Order) to the Unit Agent, and the Unit Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu of such definitive Unit Certificates, temporary Unit Certificates which are in substantially the form set forth in Exhibit A or Exhibit B hereto, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the Units are listed or Depositary therefor, or as may, consistently herewith, be determined by the officers of the Company executing such Unit Certificates, as evidenced by their execution of the Unit Certificates. If temporary Unit Certificates are issued, the Company will cause definitive Unit Certificates to be prepared without unreasonable delay. After the preparation of definitive Unit Certificates, the temporary Unit Certificates shall be exchangeable for definitive Unit Certificates upon surrender of the temporary Unit Certificates at the 18 24 Corporate Trust Office, at the expense of the Company and without charge to the Holder. Upon surrender for cancellation of any one or more temporary Unit Certificates, the Company shall execute and deliver to the Unit Agent, and the Unit Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, one or more definitive Unit Certificates of authorized denominations and evidencing a like number of Normal Units or Stripped Units, as the case may be, as the temporary Unit Certificate or Unit Certificates so surrendered. Until so exchanged, the temporary Unit Certificates shall in all respects evidence the same benefits and the same obligations with respect to the Units evidenced thereby as definitive Unit Certificates. SECTION 3.05 Registration; Registration of Transfer and Exchange. The Unit Agent shall keep at the Corporate Trust Office registers (the registers maintained in such office being herein referred to as the "Unit Registers") in which, subject to such reasonable regulations as it may prescribe, the Unit Agent shall provide for the registration of Unit Certificates evidencing the Normal Units and the Stripped Units and of transfers of Unit Certificates evidencing the Normal Units and the Stripped Units (the Unit Agent, in such capacity, the "Unit Registrar"). Upon request from any Trustee or Administrator of the Trust, the Unit Agent shall furnish to such requesting party a copy of the Unit Register for the Unit Certificates evidencing the Normal Units as promptly as practicable. Upon surrender for registration of transfer of any Unit Certificate at the Corporate Trust Office, the Company shall execute and deliver to the Unit Agent, and the Unit Agent shall authenticate, execute on behalf of the designated transferee or transferees, and deliver, in the name of the designated transferee or transferees, one or more new Unit Certificates evidencing a like number of Normal Units or Stripped Units, as the case may be. At the option of the Holder, Unit Certificates may be exchanged for other Unit Certificates evidencing a like number of Normal Units or Stripped Units, as the case may be, upon surrender of the Unit Certificates to be exchanged at the Corporate Trust Office. Whenever any Unit Certificates are so surrendered for exchange, the Company shall execute and deliver to the Unit Agent, and the Unit Agent shall authenticate, execute on behalf of the Holder, and deliver the Unit Certificates which the Holder making the exchange is entitled to receive. 19 25 All Unit Certificates issued upon any registration of transfer or exchange of a Unit Certificate shall evidence the ownership of the same number of Normal Units or Stripped Units, as the case may be, and be entitled to the same benefits and subject to the same obligations, under the Principal Agreements as the Normal Units or Stripped Units, as the case may be, evidenced by the Unit Certificate surrendered upon such registration of transfer or exchange. Every Unit Certificate presented or surrendered for registration of transfer or for exchange shall (if so required by the Unit Agent) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Unit Agent duly executed, by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of a Unit Certificate, but the Company and the Unit Agent may require payment from the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Unit Certificates (which, for these purposes, includes a Stripped Unit Creation or a transfer of Pledged Securities as contemplated by Section 5.04(a)), other than any exchanges pursuant to Sections 3.04, 3.06 and 8.05 not involving any transfer. Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Unit Agent, and the Unit Agent shall not be obligated to authenticate, execute on behalf of the Holder and deliver any Unit Certificate in respect of a Unit Certificate presented or surrendered for registration of transfer or for exchange on or after the Stock Purchase Date or the Termination Date. In lieu of delivery of a new Unit Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Unit Agent shall (a) if the Stock Purchase Date has occurred, deliver the shares of Common Stock issuable in respect of the Purchase Contracts forming a part of the Units evidenced by such Unit Certificate, or (b) if a Termination Event shall have occurred on or prior to the Stock Purchase Date, transfer the liquidation or principal amount of the Pledged Securities evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Article Five hereof. The provisions of Clauses (a), (b), (c) and (d) below shall apply only to Global Unit Certificates: 20 26 (a) Each Global Unit Certificate authenticated and executed on behalf of the Holders under this Agreement shall be registered in the name of the Depositary designated for such Global Unit Certificate or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Unit Certificate shall constitute a single Unit Certificate for all purposes of this Agreement. (b) Notwithstanding any other provision in this Agreement, no Global Unit Certificate may be exchanged in whole or in part for Unit Certificates registered, and no transfer of a Global Unit Certificate in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Unit Certificate or a nominee thereof unless (i) such Depositary (x) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Unit Certificate or (y) has ceased to be a clearing agency registered under the Exchange Act or (ii) there shall have occurred and be continuing a default by the Company in respect of its obligations under one or more Principal Agreements. (c) Subject to Clause (b) above, any exchange of a Global Unit Certificate for other Unit Certificates may be made in whole or in part, and all Unit Certificates issued in exchange for a Global Unit Certificate or any portion thereof shall be registered in such names as the Depositary for such Global Unit Certificate shall direct. (d) Every Unit Certificate authenticated and delivered upon registration of transfer of, in exchange for or in lieu of a Global Unit Certificate or any portion thereof, whether pursuant to this Section, Section 304, 306 or 805 or otherwise, shall be authenticated, executed on behalf of the Holders and delivered in the form of, and shall be, a Global Unit Certificate, unless such Unit Certificate is registered in the name of a Person other than the Depositary for such Global Unit Certificate or a nominee thereof. SECTION 3.06 Mutilated, Destroyed, Lost and Stolen Unit Certificates. If any mutilated Unit Certificate is surrendered to the Unit Agent, the Company shall execute and deliver to the Unit Agent, and the Unit Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, a new Unit Certificate, evidencing the same number of Normal Units or Stripped Units, as the case may be, and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Unit Agent (a) evidence to their satisfaction of the destruction, loss or theft of any Unit Certificate, and (b) such 21 27 security or indemnity as may be required by them to save each of them and any agent of any of them harmless, then, in the absence of notice to the Company or the Unit Agent that such Unit Certificate has been acquired by a bona fide purchaser, the Company shall execute and deliver to the Unit Agent, and the Unit Agent shall authenticate, execute on behalf of the Holder, and deliver to the Holder, in lieu of any such destroyed, lost or stolen Unit Certificate, a new Unit Certificate, evidencing the same number of Normal Units or Stripped Units, as the case may be, and bearing a number not contemporaneously outstanding. Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Unit Agent, and the Unit Agent shall not be obligated to authenticate, execute on behalf of the Holder, and deliver to the Holder, on or after the Stock Purchase Date or the Termination Date, a Unit Certificate in respect of any mutilated, destroyed, lost or stolen Unit Certificate. In lieu of delivery of a new Unit Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Unit Agent shall (a) if the Stock Purchase Date has occurred, deliver the shares of Common Stock issuable in respect of the Purchase Contracts forming a part of the Units evidenced by such Unit Certificate, or (b) if a Termination Event shall have occurred on or prior to the Stock Purchase Date, transfer the liquidation or principal amount of the Pledged Securities evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Article Five hereof. Upon the issuance of any new Unit Certificate under this Section, the Company and the Unit Agent may require the payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Unit Agent) connected therewith. Every new Unit Certificate issued pursuant to this Section in lieu of any destroyed, lost or stolen Unit Certificate shall constitute an original additional contractual obligation of the Company and of the Holder, whether or not the destroyed, lost or stolen Unit Certificate shall be at any time enforceable by anyone, and shall be entitled to all the benefits and be subject to all the obligations of the Principal Agreements equally and proportionately with any and all other Unit Certificates delivered hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or settlement of mutilated, destroyed, lost or stolen Unit Certificates. 22 28 SECTION 3.07 Persons Deemed Owners. Prior to due presentment of a Unit Certificate for registration of transfer, the Company and the Unit Agent, and any agent of the Company or the Unit Agent, may treat the Person in whose name such Unit Certificate is registered as the owner of the Units evidenced thereby, for the purpose of receiving payments of distributions or interest on the Pledged Securities, receiving or making payments of Contract Payments and performance of the underlying Purchase Contracts and Call Options and for all other purposes whatsoever, whether or not the payment of distributions or interest on the Pledged Securities or any Contract Payment payable in respect of the Purchase Contracts constituting a part of the Units evidenced thereby shall be overdue and notwithstanding any notice to the contrary, and neither the Company nor the Unit Agent, nor any agent of the Company or the Unit Agent, shall be affected by notice to the contrary. Notwithstanding the foregoing, with respect to any Global Unit Certificate, nothing herein shall prevent the Company, the Unit Agent or any agent of the Company or the Unit Agent, from giving effect to any written certification, proxy or other authorization furnished by any Depositary (or its nominee), as a Holder, with respect to such Global Unit Certificate or impair, as between such Depositary and owners of beneficial interests in such Global Unit Certificate, the operation of customary practices governing the exercise of rights of such Depositary (or its nominee) as Holder of such Global Unit Certificate. SECTION 3.08 Cancellation. All Unit Certificates surrendered for delivery of shares of Common Stock on or after the Stock Purchase Date, transfer of Pledged Securities after the occurrence of a Termination Event or registration of transfer or exchange shall, if surrendered to any Person other than the Unit Agent, be delivered to the Unit Agent and, if not already canceled, shall be promptly canceled by it. The Company may at any time deliver to the Unit Agent for cancellation any Unit Certificates previously authenticated, executed and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Unit Certificates so delivered shall, upon Issuer Order, be promptly canceled by the Unit Agent. No Unit Certificates shall be authenticated, executed on behalf of the Holder and delivered upon transfer of, in exchange for or in lieu of any Unit Certificates canceled as provided in this Section, except as expressly permitted by this Agreement. All canceled Unit Certificates held by the Unit Agent shall be disposed of as directed by Issuer Order. 23 29 If the Company or any Affiliate of the Company shall acquire any Unit Certificate, such acquisition shall not operate as a cancellation of such Unit Certificate unless and until such Unit Certificate is delivered to the Unit Agent canceled or for cancellation. SECTION 3.09 Substitution of Pledged Securities and Creation of Stripped Units; Units Not Otherwise Separable. (a) A Holder of Normal Units may obtain the release from the Pledge of such Holder's Pledged Securities underlying such Normal Units, free and clear of the Company's and the Call Option Holder's security interests therein, and convert such Normal Units into Stripped Units (collectively, a "Stripped Unit Creation") at any time after the original issuance of such Normal Units and on or prior to the second Business Day immediately preceding the Stock Purchase Date by: (i) delivering to the Collateral Agent: (w) Treasury Securities that through their scheduled payments will generate not later than the Stock Purchase Date an amount of cash that is at least equal to the aggregate Stated Amount of such Normal Units, (x) if the Call Options underlying such Normal Units remain exercisable on the date on which the requirements contained in this Section 3.09(a) for such Stripped Unit Creation are satisfied, an instrument from the Call Option Holder releasing its security interest in the Pledged Securities securing such Call Options and agreeing that such Call Options no longer underlie such Normal Units (or the Stripped Units they become); and (ii) surrendering the Unit Certificate evidencing such Normal Units, with the form of Request to Create Stripped Units thereon duly completed and executed, to the Unit Agent, whereupon the Unit Agent shall promptly request the Collateral Agent to release the Pledged Securities underlying such Normal Units; provided, however, that if Treasury Securities are the Pledged Securities underlying such Normal Units, a Stripped Unit Creation may only be effected with respect to a number of Normal Units that will result in the release from the Pledge of Treasury Securities in denominations of $1,000 and integral multiples thereof. (b) Upon receipt of the items described in subclause (w) of clause (i) of Section 3.09(a) above and the request from the Unit Agent described in clause (ii) of Section 3.09(a) above, the Collateral Agent will, in accordance with the terms of the 24 30 Pledge Agreement, release to the Unit Agent, on behalf of the Holder, from the Pledge, free and clear of the Company's and the Call Option Holders's security interests therein, the securities that theretofore had been the Pledged Securities underlying such Normal Units, and upon receipt thereof the Unit Agent shall promptly: (i) cancel the Unit Certificate for such Normal Units; (ii) transfer such released Pledged Securities to the Holder or, subject to Section 305, the Holder's designee; (iii) authenticate, execute on behalf of such Holder and deliver to the Holder or, subject to Section 3.05, the Holder's designee a Unit Certificate executed by the Company in accordance with Section 3.03 evidencing a number of Stripped Units equal to the number of such Normal Units. Concurrently with the release of the securities that theretofore had been the Pledged Securities underlying such Normal Units as contemplated by the preceding sentence, the Treasury Securities delivered to the Collateral Agent as contemplated by clause (i) of Section 3.09(a) above shall thereupon be substituted for such securities as Pledged Securities underlying the Stripped Units created from such Normal Units. (c) Except for a Stripped Unit Creation effected in compliance with this Section 3.09, for so long as the Purchase Contract underlying a Normal Unit remains in effect such Normal Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Normal Unit in respect of the Pledged Securities, Purchase Contract and Call Option underlying such Normal Unit may be acquired, and may be transferred and exchanged, only as an integrated Normal Unit. For so long as the Purchase Contract underlying a Stripped Unit remains in effect such Stripped Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Stripped Unit in respect of the Pledged Securities and Purchase Contract underlying such Stripped Unit may be acquired, and may be transferred and exchanged, only as an integrated Stripped Unit. Other than a Unit Certificate, no Holder of a Unit, nor any transferee thereof, shall be entitled to receive a certificate evidencing the ownership of Pledged Securities or any other rights or obligations underlying such Unit for so long as the Purchase Contract underlying such Unit remains in effect. 25 31 (d) Upon receipt of the amounts described in subclause (x) of clause (i) of 3.09(a), The Collateral Agent will, in accordance with the terms of the Pledge Agreement, promptly transfer such amounts to the Call Option Holder. SECTION 3.10 Payments on the Units. Contract Payments (if any) payable by the Company to the Holders, and all amounts payable to Holders as required by Section 4.01 or 5.04(b), will be payable at the office of the Unit Agent in The City of New York maintained for that purpose or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such address as it appears on the relevant Unit Register on the Record Date; provided, however, that for so long as any Units are evidenced by Global Certificates, the Unit Agent will pay each such amount payable in respect of such Units by wire transfer in same-day funds, no later than 2:00 p.m., New York City time, on the Business Day such amount is received by the Unit Agent from the Collateral Agent or the Company (or, if such amount is received by the Unit Agent after 1:00 p.m., New York City time, on a Business Day or on a day that is not a Business Day, no later than 10:00 a.m., New York City time, on the next succeeding Business Day), to the Depositary, to the account or accounts designated by it for such purpose. ARTICLE IV THE PLEDGED SECURITIES SECTION 4.01 INTENTIONALLY LEFT BLANK. SECTION 4.02 Transfer of Pledged Securities Upon Occurrence of Termination Event. Upon the occurrence of a Termination Event and the transfer of the Pledged Securities underlying each Holder's Units to the Unit Agent pursuant to the terms of the Pledge Agreement, the Unit Agent shall request transfer instructions with respect to such Pledged Securities from such Holder by written request mailed to such Holder at his address as it appears in the relevant Unit Register. Thereafter, upon surrender to the Unit Agent of a Unit Certificate evidencing a Holder's Units, with transfer instructions in proper form for transfer of the underlying Pledged Securities, the Unit Agent shall transfer the Pledged Securities evidenced by such Unit Certificate to such 26 32 Holder in accordance with such instructions; provided, however, that if the Pledged Securities are to be transferred to a Person other than the Person in whose name such Unit Certificate is registered, no such transfer shall be made unless the Person requesting the transfer has paid any transfer and other taxes required by reason of such transfer to a Person other than the registered Holder of such Unit Certificate or has established to the satisfaction of the Company that such tax either has been paid or is not payable. Until the foregoing conditions to transfer any of the Pledged Securities underlying any Units has been met, the Unit Agent shall hold such Pledged Securities as custodian for the Holder of such Units. If upon a Termination Event any Holder of Units would, after satisfying the foregoing conditions, otherwise be entitled to receive (or have transferred to such Holder's designee) Treasury Securities of any series having a principal amount that is not an integral multiple of $1,000, such Holder shall instead be entitled to receive (or have transferred to such Holder's designee) Treasury Securities of such series in a principal amount equal to the next lower integral multiple of $1,000 plus a portion of the net proceeds from the sale of Treasury Securities of such series contemplated by the succeeding sentence representing such Holder's interest therein. As soon as practicable after transfer to the Unit Agent of the Pledged Securities as provided in the Pledge Agreement, the Unit Agent shall, on behalf of all Holders who, by virtue of the preceding sentence, will not be entitled to a portion of the Treasury Securities of any series to which they would otherwise be entitled, aggregate and sell the Treasury Securities of such series representing such portion to or through one or more U.S. government securities dealers at then prevailing prices, deduct from the proceeds of such sales all commissions and other out-of-pocket transaction costs incurred in connection with such sales and, until the net proceeds therefrom have been distributed to the Holders entitled thereto or their designees, hold such proceeds in trust for such Holders. ARTICLE V THE PURCHASE CONTRACTS SECTION 5.01 Purchase of Shares of Common Stock. Each Purchase Contract underlying a Unit shall obligate the Holder of such Unit to purchase, and the Company to sell, on the Stock Purchase Date, at a price equal to the Stated Amount, a number of shares of Common Stock equal to the Settlement Rate, unless, on or prior to the Stock Purchase Date, there shall have 27 33 occurred a Termination Event. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined below) is greater than or equal to $_____ (the "Threshold Appreciation Price"), ________ of a share of Common Stock per Purchase Contract, (b) if the Applicable Market Value is less than the Threshold Appreciation Price but is greater than $ (the "Floor Price"), a fractional share of Common Stock per Purchase Contract equal to the Stated Amount divided by the Applicable Market Value (rounded upward or downward to the nearest 1/10,000th of a share or, if there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share) and (c) if the Applicable Market Value is less than or equal to the Floor Price, Shares of Common Stock per Purchase Contract, in each case subject to adjustment as provided in Section 5.06. As provided in Section 5.09, no fractional shares of Common Stock will be issued upon settlement of Purchase Contracts. The "Applicable Market Value" means the average of the Closing Prices per share of Common Stock on each of the twenty consecutive Trading Days ending on the last Trading Day immediately preceding the Stock Purchase Date. The "Closing Price" of the Common Stock on any date of determination means the closing sale price (or, if no closing price is reported, the last reported sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such date or, if the Common Stock is not listed for trading on the NYSE on any such date, as reported in the composite transactions for the principal United States securities exchange on which the Common Stock is so listed, or if the Common Stock is not so listed on a United States national or regional securities exchange, as reported by The NASDAQ Stock Market, or, if the Common Stock is not so reported, the last quoted bid price for the Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization, or, if such bid price is not available, the market value of the Common Stock on such date as determined by a nationally recognized investment banking firm retained for this purpose by the Company. A "Trading Day" means a day on which the Common Stock (A) is not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (B) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock. Each Holder of a Unit Certificate evidencing Normal Units, by his acceptance thereof, irrevocably authorizes the Unit Agent to enter into and perform the underlying Purchase Contracts and Call Options on his behalf as his attorney-in-fact, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform his obligations under such Purchase Contracts and Call Options, consents to the provisions of the Principal Agreements, irrevocably authorizes the Unit Agent to enter into and perform the Call Option Agreement and the Pledge Agreement on his behalf as his attorney-in-fact, and consents to and agrees to be bound by the Pledge of the Pledged Securities underlying such Normal Units pursuant to the Pledge Agreement. Each Holder of a Unit Certificate evidencing Stripped Units, by his acceptance thereof, irrevocably authorizes the Unit Agent to enter into 28 34 and perform the underlying Purchase Contracts on his behalf as his attorney-in-fact, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform his obligations under such Purchase Contracts, consents to the provisions of the Principal Agreements, irrevocably authorizes the Unit Agent to perform the Pledge Agreement on his behalf as his attorney-in-fact, and consents to and agrees to be bound by the Pledge of the Pledged Securities underlying such Stripped Units pursuant to the Pledge Agreement. Each Holder of Units, by his acceptance thereof, further irrevocably covenants and agrees that, unless such Holder satisfies its obligations to the Company under the Purchase Contracts underlying such Units as provided in Section 5.04(a), then to the extent and in the manner provided in Section 5.04(b) and the Pledge Agreement, but subject to the terms thereof, payments in respect of all or a portion of the principal of or proceeds from the Pledged Securities on the Stock Purchase Date shall be paid by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such payments. Upon registration of transfer of a Unit Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee) by the terms of the Purchase Contracts and any Call Options evidenced thereby and by the Pledge Agreement and the transferor shall be released from all such obligations evidenced by the Unit Certificate so transferred. The Company covenants and agrees, and each Holder of a Unit Certificate, by his acceptance thereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. SECTION 5.02 Contract Payments. Subject to Section 5.03, if any Contract Payments are or will be payable by the Company to the Holders, the Company shall pay, prior to 1:00 p.m., New York City time, on each Quarterly Payment Date to and including the Stock Purchase Date, the Contract Payments payable in respect of each Purchase Contract to the Person in whose name the Unit Certificate (or one or more Predecessor Unit Certificates) evidencing such Purchase Contract is registered at the close of business on the Record Date next preceding such Quarterly Payment Date. [The Company's obligations with respect to such Contract Payments [subordination language from indenture to be inserted].] 29 35 Each Unit Certificate delivered under this Agreement upon registration of transfer of, in exchange for or in lieu of any other Unit Certificate shall carry the rights to receive and obligations to pay Contract Payments accrued and unpaid, and to accrue, which were carried by the Purchase Contracts evidenced by such other Unit Certificate. SECTION 5.03 Deferral of Payment Dates For Contract Payment. So long as no default in the Company's obligations under the Principal Agreements has occurred and is continuing, the Company shall have the right, at any time prior to the Stock Purchase Date, to defer the payment of any or all of the Contract Payments, if any, otherwise payable by the Company on any Quarterly Payment Date, but only if the Company shall give the Holders and the Unit Agent written notice of its election to defer such payment (specifying the amount to be deferred) at least five Business Days prior to the earlier of (a) the next succeeding Quarterly Payment Date or (b) the date the Company is required to give notice of the Record Date or Quarterly Payment Date with respect to payment of such Contract Payment to the NYSE or other applicable self-regulatory organization or to Holders, or (c) the Record Date for such Quarterly Payment Date. Any Contract Payments so deferred shall bear additional Contract Payments thereon at a rate per annum equal to the Deferral Rate (computed on the basis of a 360-day year of twelve 30- day months), compounding on each succeeding Quarterly Payment Date, until paid in full. Deferred Contract Payments (and additional Contract Payments accrued thereon) shall be due on the next succeeding Quarterly Payment Date except to the extent that payment is deferred pursuant to this Section. No Contract Payments may be deferred to a date that is after the Stock Purchase Date. In the event the Company exercises its option to defer the payment of Contract Payments (if any) payable by it, then, until all deferred Contract Payments (including additional Contract Payments accrued thereon) have been paid in full, the Company shall not (a) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company's capital stock, (b) make any payment of principal, interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank pari passu with or junior in right of payment to the Contract Payments or (c) make any guarantee payments with respect to any guarantee by the Company of any securities of any subsidiary of the Company if such guarantee ranks pari passu or junior in right of payment to the Contract Payments (other than, in the case of clauses (a), (b) and (c), (i) dividends or distributions in shares of, or options, warrants or rights to subscribe for or purchase shares of, common stock of the Company, (ii) any declaration 30 36 of a dividend in connection with the implementation of a stockholder's rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, (iii) payments under the Company's guarantee of the Trust Preferred Securities, (iv) as a result of a reclassification of the Company's capital stock solely into shares of one or more classes or series of the Company's capital stock or the exchange or conversion of one class or series of the Company's capital stock for another class or series of the Company's capital stock, (v) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the securities being converted or exchanged and (vi) purchases of common stock in connection with the satisfaction by the Company of its obligations under any of the Company's benefit plans for its and its subsidiaries' directors, officers or employees or any of the company's dividend reinvestment plans). If any Contract Payments are payable by a Holder to the Company and payments made in respect of Pledged Securities underlying such Holder's Units are insufficient to cover such Holder's obligation to pay such Contract Payments, such obligation shall be deferred until the earlier of the date sufficient cash is available and the Stock Purchase Date. Any such Contract Payments so deferred shall bear additional Contract Payments thereon at a rate per annum equal to the Deferral Rate (computed on the basis of a 360-day year of twelve 30-day months), compounding on each succeeding Quarterly Payment Date, until paid in full. SECTION 5.04 Payment of Purchase Price. (a) A Holder of Units shall, by no later than 10:00 a.m., New York City time, on the Stock Purchase Date, deliver to the Unit Agent payment of the purchase price for the shares of Common Stock to be purchased pursuant to the Purchase Contracts underlying such Units, which payment shall be made in lawful money of the United States by certified or cashier's check payable to the order of the Company in immediately available funds in an amount equal to the aggregate Stated Amount of such Holder's Units. By 11:00 a.m., New York City time, on the Stock Purchase Date, the Unit Agent shall (i) transfer to the Company all of the payments the Company is entitled to receive as contemplated by the preceding sentence, (ii) notify the Collateral Agent and the Company as to the number of Normal Units and the number of Stripped Units, respectively, with respect to which payment has been received as aforesaid (such Units being collectively referred to as "Paid Units") and the number of Normal Units and the number of Stripped Units, respectively, with respect to which payment has 31 37 not been received as aforesaid (such Units being collectively referred to as "Unpaid Units"), and (iii) request the Collateral Agent (with notice of such request to the Company) to release the Pledged Securities underlying the Paid Units (or, in the case of Treasury Securities, the cash payments received thereon) from the Pledge and transfer such released Pledged Securities (or such cash) to the Unit Agent for delivery to the Holders of such Units entitled thereto, free and clear of the Company's security interest therein. By 1:00 p.m., New York City time, on the Stock Purchase Date, the Collateral Agent shall, as provided by the terms of the Pledge Agreement, comply with the request referred to in clause (iii) of the preceding sentence (subject to the Company's right under the Pledge Agreement to prevent the Collateral Agent from doing so to the extent the aggregate amount the Company has received as contemplated by clause (i) of the preceding sentence is less than the aggregate amount payable with respect to the Units referred to in such request). The Unit Agent shall thereupon, subject to its receipt from the Collateral Agent of the Pledged Securities (or cash) referred to in such request and subject to Section 3.05, transfer such released Pledged Securities (or cash) to the respective Holders entitled thereto in accordance with the settlement instructions specified in the form of Settlement Instructions appearing on the Unit Certificates evidencing the Paid Units; provided, however, that if any such Unit Certificate is not surrendered to the Unit Agent with the form of Settlement Instructions thereon duly completed and executed, the Unit Agent shall hold such Pledged Securities (or cash), and any distributions or interest received on such Pledged Securities, as custodian for the Holder entitled thereto, to be delivered to such Holder (without any interest thereon and subject to Section 3.05) upon surrender of such Unit Certificate to the Unit Agent (with the form of Settlement Instructions thereon duly completed and executed). (b) With respect to each Holder's Unpaid Units, pursuant to the terms of the Pledge Agreement, (i) (x) if Trust Preferred Securities underlie such Unpaid Units, the Collateral Agent, on behalf of such Holder, shall exercise such Holder's right under the Declaration to require the Trust to distribute Junior Subordinated Debentures having an aggregate principal amount equal to the aggregate liquidation amount of such Trust Preferred Securities, in exchange for such Trust Preferred Securities, and, upon receiving such Junior Subordinated Debentures, shall thereupon, as Put Agent, exercise the Junior Subordinated Debenture Put Option with respect thereto and (y) if Junior Subordinated Debentures 32 38 underlie such Unpaid Units, the Collateral Agent, on behalf of such Holder, shall, as Put Agent, exercise the Junior Subordinated Debenture Put Option with respect thereto; (ii) the Collateral Agent shall deliver to the Company, out of the proceeds from the exercise of such Junior Subordinated Debenture Put Option or, if Treasury Securities underlie such Unpaid Units, the proceeds from the payment of such Treasury Securities at maturity, an amount equal to the aggregate Stated Amount of such Unpaid Units plus the unpaid Contract Payments, if any, payable by such Holder to the Company in respect of such Unpaid Units to satisfy in full such Holder's obligations under such Unpaid Units; and (iii) the Collateral Agent shall remit to the Unit Agent, on behalf of such Holder, the remainder of the proceeds, if any, from the Pledged Securities underlying such Unpaid Units for distribution to such Holder. The amount referred to in clause (iii) above shall, subject to receipt thereof by the Unit Agent from the Collateral Agent, be paid to the Person in whose name the Unit Certificate (or one or more Predecessor Unit Certificates) evidencing such Unpaid Units is registered at the close of Business on the Record Date next preceding the Stock Purchase Date. (c) Each Holder will be entitled to apply any unpaid amounts owing by the Company to such Holder as a set-off to reduce, dollar-for-dollar, any amounts then owing by such Holder to the Company in respect of such Holder's Units, and such set-off amounts will be treated for all purposes as having been paid in full by such Holder as required hereby. (d) The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificates therefor to the Holder of the related Unit unless the Company shall have received payment in full of the aggregate purchase price for the shares of Common Stock to be purchased thereunder in the manner herein set forth (either directly or by operation of set-off as contemplated by the preceding sentence). 33 39 SECTION 5.05 Issuance of Shares of Common Stock. As promptly as practicable on or after the Stock Purchase Date, upon receipt by the Company of payment in full of the aggregate purchase price for the shares of Common Stock purchased by the Holders pursuant to the foregoing provisions of this Article, and subject to Section 5.06(b), the Company shall deposit with the Unit Agent, for the benefit of the Holders of the Units, one or more certificates representing the shares of Common Stock registered in the name of the Unit Agent (or its nominee) as custodian for the Holders (such certificates for shares of Common Stock, together with any dividends or distributions with respect thereto, being hereinafter referred to as the "Purchase Contract Settlement Fund") to which the Holders are entitled hereunder. Subject to the foregoing, upon surrender of a Unit Certificate to the Unit Agent on or after the Stock Purchase Date, with the form of Settlement Instructions thereon duly completed and executed, the Holder of such Unit Certificate shall be entitled to receive in exchange therefor a certificate representing that number of whole shares of Common Stock which such Holder is entitled to receive pursuant to the provisions of this Article Five (after taking into account all Units then held by such Holder) together with cash in lieu of fractional shares as provided in Section 5.09 and any dividends or distributions with respect to such shares constituting part of the Purchase Contract Settlement Fund, but without any interest thereon, and the Unit Certificate so surrendered shall forthwith be cancelled. Such shares shall be registered in the name of the Holder or the Holder's designee as specified in the form of Settlement Instructions appearing on the surrendered Unit Certificate. If any shares of Common Stock issued in respect of a Purchase Contract are to be registered to a Person other than the Person in whose name the Unit Certificate evidencing such Purchase Contract is registered, no such registration shall be made unless the Person requesting such registration has paid any transfer and other taxes required by reason of such registration in a name other than that of the registered Holder of the Unit Certificate evidencing such Purchase Contract or has established to the satisfaction of the Company that such tax either has been paid or is not payable. SECTION 5.06 Adjustment of Settlement Rate. (a) Adjustments for Dividends, Distributions, Stock Splits, Etc. (1) In case the Company shall pay or make a dividend or other distribution on any class of Common Stock of the Company in Common Stock, the Settlement Rate in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be increased by dividing such Settlement Rate by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of 34 40 business on the date fixed for such determination and the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (1), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Company will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company. (2) In case the Company shall issue rights, options or warrants to all holders of its Common Stock (not being available on an equivalent basis to Holders of the Units upon settlement of the Purchase Contracts underlying such Units) entitling them, for a period expiring within 45 days after the record date for the determination of stockholders entitled to receive such rights, options or warrants, to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price per share of the Common Stock on the date fixed for the determination of stockholders entitled to receive such rights, options or warrants (other than pursuant to a dividend reinvestment plan), the Settlement Rate in effect at the opening of business on the day following the date fixed for such determination shall be increased by dividing such Settlement Rate by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price and the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (2), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Company shall not issue any such rights, options or warrants in respect of shares of Common Stock held in the treasury of the Company. (3) In case outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Settlement Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and, conversely, in case outstanding 35 41 shares of Common Stock shall each be combined into a smaller number of shares of Common Stock, the Settlement Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (4) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock evidences of its indebtedness or assets (including securities, but excluding any rights or warrants referred to in paragraph (2) of this Section, any dividend or distribution paid exclusively in cash and any dividend or distribution referred to in paragraph (1) of this Section), the Settlement Rate shall be increased so that the same shall equal the rate determined by dividing the Settlement Rate in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution by a fraction of which the numerator shall be the Current Market Price per share of the Common Stock on the date fixed for such determination less the then fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution filed with the Unit Agent) of the portion of the assets or evidences of indebtedness so distributed applicable to one share of Common Stock and the denominator shall all be such Current Market Price per share of the Common Stock, such adjustment to become effective immediately prior to the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such distribution. In any case in which this paragraph (4) is applicable, paragraph (2) of this Section shall not be applicable. (5) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock cash (excluding any cash that is distributed in a Reorganization Event to which Section 5.06(b) applies or as part of a distribution referred to in paragraph (4) of this Section) in an aggregate amount that, when combined with (I) the aggregate amount of any other distributions to all holders of its Common Stock made exclusively in cash within the 12 months preceding the date of payment of such distribution to the extent such amount has not already been applied in a prior adjustment pursuant to this paragraph (5) and (II) the aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution), as of the date of expiration of such tender or exchange offer, of the consideration paid in respect of any tender or exchange offer by the Company or any of its subsidiaries for all or any portion of the Common Stock expiring within the 12 months preceding the date of payment of such distribution and in respect of which no adjustment pursuant to paragraph (6) of this 36 42 Section has been made, exceeds 15% of the product of the Current Market Price per share of the Common Stock on the date fixed for the determination of stockholders entitled to receive such distribution times the number of shares of Common Stock outstanding on such date (such excess portion of such distribution being herein referred to as the "Excess Amount"), the Settlement Rate shall be increased so that the same shall equal the rate determined by dividing the Settlement Rate in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution by a fraction of which (i) the numerator shall be the Current Market Price per share of the Common Stock on the date fixed for such determination less an amount equal to (x) such Excess Amount divided by (y) the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and (ii) the denominator shall be the Current Market Price per share of the Common Stock on the date fixed for such determination, such adjustment to become effective immediately prior to the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such distribution. (6) In case the Company or any subsidiary of the Company shall consummate a tender or exchange offer for all or any portion of the Common Stock and pay an aggregate consideration in respect thereof having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) that, when combined with (I) the aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution), as of the date of expiration of such tender or exchange offer, of the consideration paid in respect of any other tender or exchange offer by the Company or any of its subsidiaries for all or any portion of the Common Stock expiring within the 12 months preceding the date of expiration of such tender or exchange offer and in respect of which no adjustment pursuant to this paragraph (6) has been made and (II) the aggregate amount of any distributions to all holders of the Company's Common Stock made exclusively in cash within 12 months preceding the date of expiration of such tender or exchange offer to the extent such amount has not already been applied in a prior adjustment pursuant to paragraph (5) of this Section, exceeds 15% of the product of the Current Market Price per share of the Common Stock on the date of expiration of such tender or exchange offer times the number of shares of Common Stock outstanding (including any tendered shares) at the close of business on the date of such expiration, the Settlement Rate shall be increased so that the same shall equal the rate determined by dividing the Settlement Rate in effect immediately prior to the close of business on the date of such expiration by a fraction of which (i) the numerator shall be (A) the product of (I) the Current Market Price per share of the Common Stock on the date 37 43 of such expiration and (II) the number of shares of Common Stock outstanding (including any tendered shares) at the close of business on the date of such expiration less (B) the amount of cash plus the fair market value (determined as aforesaid) of the aggregate consideration paid in respect of such tender or exchange offer and (ii) the denominator shall be the product of (A) the Current Market Price per share of the Common Stock on the date of such expiration and (B) the number of shares of Common Stock outstanding (including any tendered shares) at the close of business on the date of such expiration less the number of shares acquired pursuant to such tender or exchange, such adjustment to become effective immediately prior to the opening of business on the day following the date of such expiration. (7) The reclassification of Common Stock into securities including securities other than Common Stock (other than any reclassification upon a Reorganization Event to which Section 5.06(b) applies) shall be deemed to involve (i) a distribution of such securities other than Common Stock to all holders of Common Stock (and the effective date of such reclassification shall be deemed to be "the date fixed for the determination of stockholders entitled to receive such distribution" and the "date fixed for such determination" within the meaning of paragraph (4) of this Section), and (ii) a subdivision or combination, as the case may be, of the number of shares of Common Stock outstanding immediately prior to such reclassification into the number of shares of Common Stock outstanding immediately thereafter (and the effective date of such reclassification shall be deemed to be "the day upon which such subdivision becomes effective" or "the day upon which such combination becomes effective", as the case may be, and "the day upon which such subdivision or combination becomes effective" within the meaning of paragraph (3) of this Section). (8) The "Current Market Price" per share of Common Stock on any day means the average of the daily Closing Prices for the 5 consecutive Trading Days selected by the Company commencing not more than 20 Trading Days before, and ending not later than, the earlier of the day in question and the day before the "ex" date with respect to the issuance or distribution requiring such computation. For purposes of this paragraph, the term " 'ex' date", when used with respect to any issuance or distribution, shall mean the first date on which the Common Stock trades regular way on such exchange or in such market without the right to receive such issuance or distribution. (9) All adjustments to the Settlement Rate shall be calculated to the nearest 1/10,000th of a share of Common Stock (or, if there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment in the Settlement Rate shall be required unless such adjustment would require an increase or 38 44 decrease of at least one percent therein; provided, however, that any adjustments which by reason of this subparagraph are not required to be made shall be carried forward and taken into account in any subsequent adjustment. If an adjustment is made to the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 506(a), an adjustment shall also be made to the Applicable Market Value solely to determine which of clauses (a), (b) or (c) of the definition of Settlement Rate in Section 501 will apply on the Stock Purchase Date. Such adjustment shall be made by multiplying the Applicable Market Value by a fraction of which the numerator shall be the Settlement Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 506(a) and the denominator shall be the Settlement Rate immediately before such adjustment. (10) The Company may make such increases in the Settlement Rate, in addition to those required by this Section, as it considers to be advisable in order to avoid or diminish any income tax to any holders of shares of Common Stock resulting from any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from any event treated as such for income tax purposes or for any other reasons. (b) Adjustment for Consolidation, Merger or Other Reorganization Event. In the event of (i) any consolidation or merger of the Company with or into another Person (other than a merger or consolidation in which the Company is the continuing corporation and in which the Common Stock outstanding immediately prior to the merger or consolidation is not exchanged for cash, securities or other property of the Company or another corporation), (ii) any sale, transfer, lease or conveyance to another Person of the property of the Company as an entirety or substantially as an entirety, (iii) any statutory exchange of securities of the Company with another Person (other than in connection with a merger or acquisition) or (iv) any liquidation, dissolution or winding up of the Company (any such event, a "Reorganization Event"), the Settlement Rate will be adjusted to provide that each Holder of Units will receive on the Stock Purchase Date with respect to each Pur chase Contract forming a part thereof, the kind and amount of securities, cash and other property receivable upon such Reorganization Event by a Holder of the number of shares of Common Stock issuable on account of each Purchase Contract if the Stock Purchase Date had occurred immediately prior to such Reorganization Event, assuming such Holder of Common Stock is not a Person with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be ("constituent Person"), or an Affiliate of a constituent Person, and failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such Reorganization 39 45 Event (provided that if the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each share of Common Stock held immediately prior to such Reorganization Event by other than a constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purpose of this Section the kind and amount of securities, cash and other property receivable upon such Reorganization Event by each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). In the event of such a Reorganization Event, the Person formed by such consolidation, merger or exchange or the Person which acquires the assets of the Company or, in the event of a liquidation or dissolution of the Company, the Company or a liquidating trust created in connection therewith, shall execute and deliver to the Unit Agent an agreement supplemental hereto providing that the Holders of each Outstanding Unit shall have the rights provided by this Section 5.06. Such supplemental agreement shall provide for adjustments which, for events subsequent to the effective date of such supplemental agreement, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section. The above provisions of this Section shall similarly apply to successive Reorganization Events. SECTION 5.07 Notice of Adjustments and Certain Other Events. (a) Whenever the Settlement Rate is adjusted as herein provided, the Company shall: (i) forthwith compute the adjusted Settlement Rate in accordance with Section 506 and prepare and transmit to the Unit Agent an Officers' Certificate setting forth the Settlement Rate, the method of calculation thereof in reasonable detail, and the facts requiring such adjustment and upon which such adjustment is based; and (ii) within 10 Business Days following the occurrence of an event that permits or requires an adjustment to the Settlement Rate pursuant to Section 5.06 (or if the Company is not aware of such occurrence, as soon as practicable after becoming so aware), provide a written notice to the Holders of the Units of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the Settlement Rate was determined and setting forth the adjusted Settlement Rate. 40 46 (b) The Unit Agent shall not at any time be under any duty or responsibility to any holder of Units to determine whether any facts exist which may require any adjustment of the Settlement Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed in making the same. The Unit Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at the time be issued or delivered with respect to any Purchase Contract; and the Unit Agent makes no representation with respect thereto. The Unit Agent shall not be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock pursuant to a Purchase Contract or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article. SECTION 5.08 No Fractional Shares. No fractional shares or scrip representing fractional shares of Common Stock shall be issued or delivered upon settlement on the Stock Purchase Date. If Unit Certificates evidencing more than one Purchase Contract shall be surrendered for settlement at one time by the same Holder, the number of full shares of Common Stock which shall be delivered upon settlement shall be computed on the basis of the aggregate number of Purchase Contracts evidenced by the Unit Certificates so surrendered. Instead of any fractional share of Common Stock which would otherwise be deliverable upon settlement of any Purchase Contracts on the Stock Purchase Date, the Company, through the Unit Agent, shall make a cash payment in respect of such fractional interest in an amount equal to such fraction times the Applicable Market Value. The Company shall provide the Unit Agent from time to time with sufficient funds to permit the Unit Agent to make all cash payments required by this Section 5.08 in a timely manner. SECTION 5.09 Charges and Taxes. The Company will pay all stock transfer and similar taxes attributable to the initial issuance and delivery of the shares of Common Stock pursuant to the Purchase Contracts; provided, however, that the Company shall not be required to pay any such tax or taxes which may be payable in respect of any exchange of or substitution for a Unit Certificate evidencing a Purchase Contract or any issuance of a share of Common Stock in a name other than that of the registered Holder of a Unit Certificate surrendered in respect of the Purchase Contracts evidenced thereby, other than in the name of the Unit Agent, as custodian for such Holder, and the Company shall not be required to issue or deliver such share certificates or Unit Certificates unless or until 41 47 the Person or Persons requesting the transfer or issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. SECTION 5.10 Termination Event; Notice. The Purchase Contracts and the obligations and rights of the Company and the Holders thereunder, including, without limitation, all obligations and rights to pay or receive any accrued or deferred Contract Payments or to settle such Purchase Contracts pursuant to this Article Five, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Unit Agent or the Company, if, on or prior to the Stock Purchase Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall give written notice to the Unit Agent, the Collateral Agent and the Holders, at their addresses as they appear in the Unit Registers. Upon and after the occurrence of a Termination Event, the provisions of this Article Five (other than this Section 5.10) shall automatically terminate and be of no further force or effect, and the Unit Certificates shall thereafter represent only the right to receive the Pledged Securities forming a part of the Units theretofore evidenced thereby in accordance with the provisions of Section 4.02 and the Pledge Agreement. ARTICLE VI REMEDIES SECTION 6.01 Unconditional Rights of Holders. Notwithstanding any other provision in this Agreement, the Holder of any Unit shall have the right, which is absolute and unconditional but which is subject to Section 5.10, to purchase Common Stock pursuant to the Purchase Contract underlying such Unit and to receive payment of Contract Payments, if any, payable by the Company to such Holder with respect to such Purchase Contract and, in each such case, to institute suit for the enforcement of any such right, and such rights shall not be impaired without the consent of such Holder. SECTION 6.02 Restoration of Rights and Remedies. If any Holder of Units has instituted any proceeding to enforce any right or remedy under this Agreement and such proceeding has been discontinued or abandoned 42 48 for any reason, or has been determined adversely to such Holder, then and in every such case, subject to any determination in such proceeding, the Company and such Holder shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of such Holder shall continue as though no such proceeding had been instituted. SECTION 6.03 Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement of mutilated, destroyed, lost or stolen Unit Certificates in the last paragraph of Section 3.06, no right or remedy herein conferred upon or reserved to the Holders of Units is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 6.04 Delay or Omission Not Waiver. No delay or omission of any Holder to exercise any right or remedy shall impair any such right or remedy or constitute a waiver of any such right. Every right and remedy given by this Article or by law to the Holders may be exercised from time to time, and as often as may be deemed expedient, by such Holders. SECTION 6.05 Undertaking for Costs. All parties to this Agreement agree, and each Holder of any Unit by his acceptance of the Unit Certificate evidencing such Unit shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Agreement, or in any suit against the Unit Agent for any action taken, suffered or omitted by it as Unit Agent, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Unit Agent, to any suit instituted by any Holder of Units, or group of Holders, holding in the aggregate more than 10% of the number of Outstanding Units, or to any suit instituted by any Holder of Units for the enforcement of payments 43 49 due in respect of Pledged Securities or Contract Payments on Purchase Contracts underlying such Units on or after the respective due dates therefor, or for enforcement of the right to purchase shares of Common Stock under the Purchase Contracts constituting a part of such Units. SECTION 6.06 Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Agreement; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Unit Agent or the Holders, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE VII THE UNIT AGENT SECTION 7.01 Certain Duties and Responsibilities. (a) The Unit Agent undertakes to perform, with respect to the Units, such duties and only such duties as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Unit Agent; and (i) in the absence of bad faith or negligence on its part, the Unit Agent may, with respect to the Units, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Unit Agent and conforming to the requirements of this Agreement, but in the case of any certificates or opinions which by any provision hereof are specifically required to be furnished to the Unit Agent, the Unit Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Agreement. 44 50 (b) No provision of this Agreement shall be construed to relieve the Unit Agent from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that (i) this Subsection shall not be construed to limit the effect of Subsection (a) of this Section; (ii) the Unit Agent shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Unit Agent was negligent in ascertaining the pertinent facts; and (iii) no provision of this Agreement shall require the Unit Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (c) Whether or not therein expressly so provided, every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Unit Agent shall be subject to the provisions of this Section. SECTION 7.02 Notice of Default. Within 90 days after the occurrence of any default by the Company hereunder, of which a Responsible Officer of the Unit Agent has actual knowledge, the Unit Agent shall transmit by mail to all Holders of Units, as their names and addresses appear in the Unit Registers, notice of such default hereunder, unless such default shall have been cured or waived. SECTION 7.03 Certain Rights of Unit Agent. Subject to the provisions of Section 7.01: (a) the Unit Agent may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; 45 51 (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by an Officers' Certificate, Issuer Order or Issuer Request, and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Agreement the Unit Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Unit Agent (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate of the Company; (d) the Unit Agent may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Unit Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Unit Agent, in its discretion, may make reasonable further inquiry or investigation into such facts or matters related to the issuance of the Units and the execution, delivery and performance of the Purchase Contracts as it may see fit, and, if the Unit Agent shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and promises of the Company, personally or by agent or attorney; and (f) the Unit Agent may execute any of its powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Unit Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. SECTION 7.04 Not Responsible for Recitals or Issuance of Units. The recitals contained herein and in the Unit Certificates shall be taken as the statements of the Company and the Unit Agent assumes no responsibility for their correctness. The Unit Agent makes no representations as to the validity or sufficiency of this Agreement or of the Units. The Unit Agent shall not be accountable for the 46 52 use or application by the Company of the proceeds in respect of the Trust Preferred Securities or Purchase Contracts. SECTION 7.05 May Hold Units. Any Unit Registrar or any other agent of the Company, or the Unit Agent, in its individual or any other capacity, may become the owner or pledgee of Units and may otherwise deal with the Company with the same rights it would have if it were not Unit Registrar or such other agent, or the Unit Agent. SECTION 7.06 Money Held in Trust. Money held by the Unit Agent in trust hereunder need not be segregated from other funds except to the extent required by law. The Unit Agent shall be under no obligation to invest or pay interest on any money received by it hereunder except as otherwise agreed with the Company. SECTION 7.07 Compensation and Reimbursement. The Company agrees: (a) to pay to the Unit Agent from time to time reasonable compensation for all services rendered by it hereunder as the Company and the Unit Agent shall from time to time agree in writing; (b) except as otherwise expressly provided herein, to reimburse the Unit Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Unit Agent in accordance with any provision of this Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (c) to indemnify the Unit Agent and any predecessor Unit Agent and their agents for, and to hold each of them harmless against, any and all loss, damage, claim, liability or expense, including taxes (other than taxes based upon, measured by or determined by the income of the Unit Agent), incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of its duties hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. 47 53 SECTION 7.08 Corporate Unit Agent Required; Eligibility. There shall at all times be an Unit Agent hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or State authority and having its Corporate Trust Office in the Borough of Manhattan, The City of New York, if there be such a corporation in the Borough of Manhattan, The City of New York qualified and eligible under this Article and willing to act on reasonable terms. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Unit Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION 7.09 Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Unit Agent and no appointment of a successor Unit Agent pursuant to this Article shall become effective until the acceptance of appointment by the successor Unit Agent in accordance with the applicable requirements of Section 7.10. (b) The Unit Agent may resign at any time by giving written notice thereof to the Company 60 days prior to the effective date of such resignation. If the instrument of acceptance by a successor Unit Agent required by Section 7.10 shall not have been delivered to the Unit Agent within 30 days after the giving of such notice of resignation, the resigning Unit Agent may petition any court of competent jurisdiction for the appointment of a successor Unit Agent. (c) The Unit Agent may be removed at any time by Act of the Holders of a majority in number of the Outstanding Units delivered to the Unit Agent and the Company. (d) If at any time 48 54 (i) the Unit Agent fails to comply with Section 310(b) of the TIA, as if the Unit Agent were an indenture trustee under an indenture qualified under the TIA, after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Unit for at least six months, or (ii) the Unit Agent shall cease to be eligible under Section 708 and shall fail to resign after written request therefor by the Company or by any such Holder, or (iii) the Unit Agent shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Unit Agent or of its property shall be appointed or any public officer shall take charge or control of the Unit Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (x) the Company by a Board Resolution may remove the Unit Agent, or (y) any Holder who has been a bona fide Holder of a Unit for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Unit Agent and the appointment of a successor Unit Agent. (e) If the Unit Agent shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Unit Agent for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Unit Agent and shall comply with the applicable requirements of Section 7.10. If no successor Unit Agent shall have been so appointed by the Company and accepted appointment in the manner required by Section 7.10, any Holder who has been a bona fide Holder of a Unit for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Unit Agent. (f) The Company shall give, or shall cause such successor Unit Agent to give, notice of each resignation and each removal of the Unit Agent and each appointment of a successor Unit Agent by mailing written notice of such event by first-class mail, postage prepaid, to all Holders of Units as their names and addresses appear in the Unit Registers. Each notice shall include the name of the successor Unit Agent and the address of its Corporate Trust Office. 49 55 SECTION 7.10 Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Unit Agent, every such successor Unit Agent so appointed shall execute, acknowledge and deliver to the Company and to the retiring Unit Agent an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Unit Agent shall become effective and such successor Unit Agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, agencies and duties of the retiring Unit Agent; but, on the request of the Company or the successor Unit Agent, such retiring Unit Agent shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Unit Agent all the rights, powers and trusts of the retiring Unit Agent and shall duly assign, transfer and deliver to such successor Unit Agent all property and money held by such retiring Unit Agent hereunder. (b) Upon request of any such successor Unit Agent, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Unit Agent all such rights, powers and agencies referred to in paragraph (a) of this Section. (c) No successor Unit Agent shall accept its appointment unless at the time of such acceptance such successor Unit Agent shall be qualified and eligible under this Article. SECTION 7.11 Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Unit Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Unit Agent shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Unit Agent, shall be the successor of the Unit Agent hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Unit Certificates shall have been authenticated and executed on behalf of the Holders, but not delivered, by the Unit Agent then in office, any successor by merger, conversion or consolidation to such Unit Agent may adopt such authentication and execution and deliver the Unit Certificates so authenticated and executed with the same effect as if such successor Unit Agent had itself authenticated and executed such Units. 50 56 SECTION 7.12 Preservation of Information; Communications to Holders. (a) The Unit Agent shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders received by the Unit Agent in its capacity as Unit Registrar. (b) If three or more Holders (herein referred to as "applicants") apply in writing to the Unit Agent, and furnish to the Unit Agent reasonable proof that each such applicant has owned a Unit for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders with respect to their rights under this Agreement or under the Units and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Unit Agent shall, within five Business Days after the receipt of such application, afford such applicants access to the information preserved at the time by the Unit Agent in accordance with Section 7.12(a). (c) Every Holder of Units, by receiving and holding the Unit Certificates evidencing the same, agrees with the Company and the Unit Agent that none of the Company, the Unit Agent nor any agent of any of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 7.12(b), regardless of the source from which such information was derived. SECTION 7.13 No Obligations of Unit Agent. Except to the extent otherwise provided in this Agreement, the Unit Agent assumes no obligations and shall not be subject to any liability under this Agreement or any Purchase Contract or Call Option in respect of the obligations of the Holder of any Unit thereunder. The Company agrees, and each Holder of a Unit Certificate, by his acceptance thereof, shall be deemed to have agreed, that the Unit Agent's execution of the Unit Certificates on behalf of the Holders shall be solely as agent and attorney-in-fact for the Holders, and that the Unit Agent shall have no obligation to perform such Purchase Contracts or Call Options on behalf of the Holders, except to the extent expressly provided in Article Five hereof. SECTION 7.14 Tax Compliance. (a) The Unit Agent, on its own behalf and on behalf of the Company, will comply with all applicable certification, information reporting and withholding (including "backup" withholding) requirements imposed by applicable tax laws, regulations or administrative practice with respect to (i) any payments made with 51 57 respect to the Units or (ii) the issuance, delivery, holding, transfer, redemption or exercise of rights under the Units. Such compliance shall include, without limitation, the preparation and timely filing of required returns and the timely payment of all amounts required to be withheld to the appropriate taxing authority or its designated agent. (b) The Unit Agent shall comply with any direction received from the Company with respect to the application of such requirements to particular payments or Holders or in other particular circumstances, and may for purposes of this Agreement rely on any such direction in accordance with the provisions of Section 7.01(a)(ii) hereof. (c) The Unit Agent shall maintain all appropriate records documenting compliance with such requirements, and shall make such records available, on written request, to the Company or to its authorized representative within a reasonable period of time after receipt of such request. ARTICLE VIII SUPPLEMENTAL AGREEMENTS SECTION 8.01 Supplemental Agreements Without Consent of Holders. Without the consent of any Holders, the parties to any Principal Agreement, at any time and from time to time, may enter into one or more agreements supplemental hereto or thereto, in form satisfactory to such parties, for any of the following purposes: (1) to evidence the succession of another Person to any such party, and the assumption by any such successor of the covenants of such party herein or therein and under the Units; or (2) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company; or (3) to evidence and provide for the acceptance of appointment hereunder by a successor Unit Agent; or 52 58 (4) to evidence the succession of another Person to the rights of the Call Option Holder under the Call Options, in connection with a transfer of such rights by the Call Option Holder to such Person; or (5) to make provision with respect to the rights of Holders pursuant to the requirements of Section 5.06(b); or (6) to cure any ambiguity, to correct or supplement any provisions herein or therein which may be inconsistent with any other provisions herein or therein, or to make any other provisions with respect to such matters or questions arising under such Principal Agreement, provided such action shall not adversely affect the interests of the Holders. SECTION 8.02 Supplemental Agreements with Consent of Holders. With the consent of the Holders of not less than a majority of the Outstanding Units (or, with respect to modifications that adversely affect only the Holders of Normal Units or only the Holders of Stripped Units, with the consent of the Holders of not less than a majority of the Outstanding Units that comprise Normal Units or Stripped Units, as the case may be), by Act of said Holders delivered to the parties to any Principal Agreement, such parties (when authorized, in the case of the Company, by a Board Resolution) may enter into an agreement or agreements supplemental to such Principal Agreement for the purpose of modifying in any manner the terms of the Units, or the provisions of such Principal Agreement or the rights of the Holders in respect of the Units; provided, however, that no such supplemental agreement shall, without the consent of the Holder of each Outstanding Unit affected thereby, (1) change any payment date; (2) change the amount or type of Pledged Securities underlying a Unit, impair the right of the Holder of any Unit to receive distributions or interest payments on the underlying Pledged Securities or otherwise adversely affect the Holder's rights in or to such Pledged Securities (including the rights of Holders of Normal Units to effect a Stripped Unit Creation); (3) reduce the Contract Payments, if any, or other amounts receivable by Holders in respect of Units or change any place where, or the coin or currency in which, any Contract Payments or other amounts payable in respect of Units are payable; 53 59 (4) impair the right to institute suit for the enforcement of any Purchase Contract; (5) reduce the number of shares of Common Stock to be purchased pursuant to any Purchase Contract, increase the price to purchase shares of Common Stock upon settlement of any Purchase Contract, change the Stock Purchase Date or otherwise adversely affect the Holder's rights under any Purchase Contract; or (6) reduce the amount payable on exercise of any Call Option, extend the Call Option Expiration Date (as defined in the Call Option Agreement) or otherwise adversely affect any Holder's rights under any Call Option; or (7) reduce the percentage of the Outstanding Units the consent of whose Holders is required for any such supplemental agreement. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental agreement, but it shall be sufficient if such Act shall approve the substance thereof. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any supplemental agreement to any Principal Agreement. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to consent to such supplemental agreement, whether or not such Holders remain Holders after such record date; provided, that unless such consent shall have become effective by virtue of the requisite percentage having been obtained prior to the date which is 90 days after such record date, any such consent previously given shall automatically and without further action by any Holder be cancelled and of no further effect. SECTION 8.03 Execution of Supplemental Agreements. In executing, or accepting the additional agencies created by, any supplemental agreement permitted by this Article or the modifications thereby of the agencies created by the Principal Agreements, the Unit Agent shall be entitled to receive and (subject to Section 701) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental agreement is authorized or permitted by this Agreement. The Unit Agent may, but shall not be obligated to, enter into any such supplemental agreement which affects the Unit Agent's own rights, duties or immunities under this Agreement or otherwise. 54 60 SECTION 8.04 Effect of Supplemental Agreements. Upon the execution of any supplemental agreement under this Article, the relevant Principal Agreement shall be modified in accordance therewith, and such supplemental agreement shall form a part of such Principal Agreement for all purposes; and every Holder of Unit Certificates theretofore or thereafter authenticated, executed on behalf of the Holder and delivered hereunder shall be bound thereby. SECTION 8.05 Reference to Supplemental Agreements. Unit Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any supplemental agreement pursuant to this Article may, and shall if required by the Unit Agent, bear a notation in form approved by the Unit Agent as to any matter provided for in such supplemental agreement. If the Company shall so determine, new Unit Certificates so modified as to conform, in the opinion of the Unit Agent and the Company, to any such supplemental agreement may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Unit Agent in exchange for Outstanding Unit Certificates evidencing the same number of Normal Units or Stripped Units, as the case may be. ARTICLE IX CONSOLIDATION, MERGER, SALE OR CONVEYANCE SECTION 9.01 Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under Certain Conditions. The Company covenants that it will not merge or consolidate with any other Person or sell or convey all or substantially all of its assets to any Person, except that the Company may merge or consolidate with, or sell or convey all or substantially all of its assets to, any other Person, provided that (a) the Company shall be the continuing corporation, or the successor (if other than the Company) shall be a corporation organized and existing under the laws of the United States of America or a State thereof and such corporation shall assume the obligations of the Company under the Purchase Contracts and the Pledge Agreement by one or more supplemental agreements in form satisfactory to the Unit Agent and, in the case of the Pledge Agreement, the Collateral Agent, executed and delivered to the Unit Agent, and, in the case of the Pledge Agreement, the Collateral Agent by such corporation, and (b) the 55 61 Company or such successor corporation, as the case may be, shall not, immediately after such merger or consolidation, or such sale or conveyance, be in default in the performance of any covenant or condition under any Principal Agreement or under any of the Units. SECTION 9.02 Rights and Duties of Successor Corporation. In case of any such consolidation, merger, sale or conveyance and upon any such assumption by the successor corporation, such successor corporation shall succeed to and be substituted for the Company with the same effect as if it had been named in the Principal Agreements as the Company. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of CMS Energy Corporation, any or all of the Unit Certificates evidencing Units issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Unit Agent; and, upon the order of such successor corporation, instead of the Company, and subject to all the terms, conditions and limitations in this Agreement prescribed, the Unit Agent shall authenticate and execute on behalf of the Holders and deliver any Unit Certificates which previously shall have been signed and delivered by the officers of the Company to the Unit Agent for authentication and execution, and any Unit Certificate evidencing Units which such successor corporation thereafter shall cause to be signed and delivered to the Unit Agent for that purpose. All the Unit Certificates so issued shall in all respects have the same legal rank and benefit under this Agreement as the Unit Certificates theretofore or thereafter issued in accordance with the terms of this Agreement as though all of such Unit Certificates had been issued at the date of the execution hereof. In case of any such consolidation, merger, sale or conveyance such change in phraseology and form (but not in substance) may be made in the Unit Certificates evidencing Units thereafter to be issued as may be appropriate. SECTION 9.03 Opinion of Counsel to Unit Agent. The Unit Agent, subject to Sections 7.01 and 7.03, may receive an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale or conveyance, and any such assumption, complies with the provisions of this Article. 56 62 ARTICLE X COVENANTS SECTION 10.01 Performance Under Purchase Contracts. The Company covenants and agrees for the benefit of the Holders from time to time of the Units that it will duly and punctually perform its obligations under the Purchase Contracts in accordance with the terms of the Purchase Contracts and this Agreement. SECTION 10.02 Maintenance of Office or Agency. The Company will maintain in the Borough of Manhattan, The City of New York an office or agency where Unit Certificates may be presented or surrendered for acquisition of shares of Common Stock upon settlement and for transfer of Pledged Securities upon occurrence of a Termination Event, where Unit Certificates may be surrendered for registration of transfer or exchange or for effecting Stripped Unit Creations, where payment of Contract Payments, if any, payable by the Company to the Holders may be made and where notices and demands to or upon the Company in respect of the Units and this Agreement may be served. The Company will give prompt written notice to the Unit Agent of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Unit Agent with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Company hereby appoints the Unit Agent as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies where Unit Certificates may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company will give prompt written notice to the Unit Agent of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates as the place of payment for the Units the Corporate Trust Office and appoints the Unit Agent at its Corporate Trust Office as paying agent in such city. SECTION 10.03 Company to Reserve Common Stock. The Company shall at all times prior to the Stock Purchase Date reserve and keep available, free from preemptive rights, out of its authorized but unissued 57 63 Common Stock the full number of shares of Common Stock issuable against tender of payment in respect of all Purchase Contracts underlying the Units. SECTION 10.04 Covenants as to Common Stock. The Company covenants that all shares of Common Stock which may be issued against tender of payment in respect of the Purchase Contracts underlying the Units will, upon issuance, be newly issued (i.e., not issued out of treasury shares) and be duly authorized, validly issued, fully paid and nonassessable. SECTION 10.05 Statements of Officers of the Company as to Default. The Company will deliver to the Unit Agent, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions hereof, and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. 58 64 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. CMS ENERGY CORPORATION By: ------------------------------- THE BANK OF NEW YORK, as Unit Agent By: ------------------------------- 59 65 EXHIBIT A FORM OF NORMAL UNIT CERTIFICATE CMS ENERGY CORPORATION _____% ADJUSTABLE CONVERTIBLE TRUST SECURITY UNITS (STATED AMOUNT $____ PER NORMAL UNIT) CUSIP No. ______ No. _____ _____ Normal Units This Unit Certificate certifies that ____________ is the registered Holder of the number of Normal Units set forth above. Each Normal Unit represents the right to purchase Common Stock under a Purchase Contract with CMS Energy Corporation, a Michigan corporation (the "Company"), together with ownership of the Trust Preferred Securities or other Pledged Securities pledged to secure the obligations referred to in (a) and (b) below, subject to (a) the obligations owed to the Company under such Purchase Contract, (b) for so long as any Call Options remain exercisable, the obligations owed to the Call Option Holder under a Call Option and (c) the pledge arrangements securing the foregoing obligations. Each Purchase Contract evidenced hereby is governed by a Master Unit Agreement, dated as of __________ (the "Master Unit Agreement"), between the Company and The Bank of New York, as unit agent (herein called the "Unit Agent"). All terms used herein which are defined in the Master Unit Agreement have the meanings set forth therein. Each Call Option evidenced hereby is governed by the Call Option Agreement. The Pledge of the Pledged Securities evidenced hereby is governed by the Pledge Agreement. Reference is hereby made to the Master Unit Agreement, the Call Option Agreement and the Pledge Agreement, and any supplemental agreements thereto, for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Unit Agent, the Company, the Call Option Holder, the Collateral Agent and the Holders. The summary contained herein is qualified in its entirety by the provisions of the Principal Agreements, and the Principal Agreements shall govern the rights of the parties to the extent that there is any conflict between such summary and such provisions. A-1 66 Each Purchase Contract evidenced hereby obligates the Holder of this Unit Certificate to purchase, and the Company to sell, on ___________ (the "Stock Purchase Date"), at a price equal to $ (the "Stated Amount"), a number of shares of Common Stock, par value per share ("Common Stock"), of the Company equal to the Settlement Rate, unless on or prior to the Stock Purchase Date there shall have occurred a Termination Event. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined in the Master Unit Agreement) is greater than or equal to $ (the "Threshold Appreciation Price"), _________ of a share of Common Stock per Purchase Contract, (b) if the Applicable Market Value is less than the Threshold Appreciation Price but is greater than $ (the "Floor Price"), a fractional share of Common Stock per Purchase Contract equal to the Stated Amount divided by the Applicable Market Value (rounded to the nearest 1/10,000th of a share or, if there is no nearest 1/10,000th of a share, rounded downward to the nearest 1/10,000th of a share) and (c) if the Applicable Market Amount is less than or equal to the Floor Price, shares of Common Stock per Purchase Contract, in each case subject to adjustment as provided in the Master Unit Agreement. No fractional shares of Common Stock will be issued upon settlement of Purchase Contracts, but instead of issuing any fractional interest the Company shall make a cash payment as provided in the Master Unit Agreement. The purchase price for the shares of Common Stock to be purchased pursuant to each Purchase Contract evidenced hereby, if not paid by 10:00 a.m., New York City time, on the Stock Purchase Date, shall be paid by application of payments received by the Company on the Stock Purchase Date from the Collateral Agent pursuant to the Pledge Agreement in respect of the Pledged Securities pledged to secure such Holder's obligations under such Purchase Contract. The Purchase Contracts and the obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights and obligations to receive and pay accrued or deferred Contract Payments, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Unit Agent or the Company, if, on or prior to the Stock Purchase Date, a Termination Event shall have occurred. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Pledged Securities from the Pledge. The Normal Units shall thereafter represent the right to receive the Pledged Securities forming a part of such Normal Units in accordance with the provisions of the Master Unit Agreement and the Pledge Agreement. The Call Options evidenced hereby entitle the Call Option Holder to acquire the Trust Preferred Securities (or Junior Subordinated Debentures substituted therefor) evidenced hereby on or before ______________, unless prior to the exercise thereof there shall have occurred a Termination Event. The Call Option Holder may A-2 67 exercise such Call Options only in whole together with the Call Options underlying the other Normal Units, by delivering to the Unit Agent a notice of exercise and delivering to the Collateral Agent the Aggregate Consideration Deliverable Upon Exercise of Call Options, whereupon the Trust Preferred Securities or Junior Subordinated Debentures underlying the Normal Units will be released from the Pledge and the Treasury Securities constituting all or part of the Aggregate Consideration Deliverable Upon Exercise of Call Options delivered to the Collateral Agent will be substituted as the Pledged Securities underlying the Normal Units. The Company shall pay, on each ________, ________, __________ and ___________, commencing ___________ (each, a "Quarterly Payment Date"), in respect of each Purchase Contract evidenced hereby, a payment (the "Contract Payment") accruing on the Stated Amount of such Unit from and including the date of first issuance of any Units at a rate per annum equal to _____% (the "Contract Payment Rate") (computed on the basis of a 360-day year of twelve 30-day months and subject to deferral as described in the Master Unit Agreement), plus any additional fees accrued thereon pursuant to Section 503 of the Master Unit Agreement. The Company's obligations with respect to Contract Payments shall be, to the extent provided in the Master Unit Agreement, subordinate and subject in right of payment to all Senior Indebtedness. Payments due to the Holder in respect of the Normal Units evidenced hereby will be payable to the Person in whose name this Unit Certificate (or a Predecessor Unit Certificate) is registered at the close of business on the Record Date next preceding the relevant payment date. The transfer of any Unit Certificate will be registered and Unit Certificates may be exchanged as provided in the Master Unit Agreement. The Unit Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Master Unit Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Unit Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Except as provided in the Master Unit Agreement in connection with a Stripped Unit Creation, for so long as the Purchase Contract underlying a Normal Unit remains in effect, such Normal Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Normal Unit in respect of the Pledged Securities and Purchase Contract constituting such Normal Unit may be transferred and exchanged only as an integrated Normal Unit. A-3 68 Upon registration of transfer of this Unit Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee) by the terms of the Purchase Contracts and Call Options evidenced hereby and by the Pledge Agreement, and the transferor shall be released from such obligations. The Company covenants and agrees, and the Holder, by his acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. The Holder of this Unit Certificate, by his acceptance hereof, irrevocably authorizes the Unit Agent to enter into and perform the related Purchase Contracts and Call Options evidenced hereby on his behalf as his attorney-in-fact, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform his obligations under such Purchase Contracts and Call Options, consents to the provisions of the Principal Agreements, irrevocably authorizes the Unit Agent to enter into and perform the Call Option Agreement and the Pledge Agreement on his behalf as his attorney-in-fact, and consents to and agrees to be bound by the Pledge of the Pledged Securities evidenced hereby pursuant to the Pledge Agreement. Subject to certain exceptions, the provisions of the Principal Agreements may be amended with the consent of the Holders of at least a majority of the Outstanding Units or, if the amendment affects only the Holders of the Normal Units or only the Holders of the Stripped Units, at least a majority of the Outstanding Units comprising Normal Units or Stripped Units, as the case may be. THE PURCHASE CONTRACTS AND CALL OPTIONS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. The Company, the Unit Agent and any agent of the Company or the Unit Agent may treat the Person in whose name this Unit Certificate is registered as the owner of the Normal Units evidenced hereby for the purpose of receiving payments of distributions or interest on the Pledged Securities, receiving the rights and performing the obligations under the Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Unit Agent nor any such agent shall be affected by notice to the contrary. The Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of shares of Common Stock. A-4 69 Copies of the Principal Agreements are available for inspection at the offices of the Unit Agent. Unless the certificate of authentication hereon has been executed by the Unit Agent by manual signature, this Unit Certificate shall not be entitled to any benefit under the Principal Agreements or be valid or obligatory for any purpose. A-5 70 IN WITNESS WHEREOF, the Company and the Holder hereby agree to their respective obligations under the Purchase Contracts evidenced by this instrument, and the Holder hereby acknowledges that the Pledged Securities evidenced by this instrument are subject to the Pledge under the Pledge Agreement. CMS ENERGY CORPORATION By: ------------------------------- Attest: ------------------ HOLDER SPECIFIED ABOVE By: The Bank of New York, as Attorney-in-Fact of such Holder By: ------------------------------- IN WITNESS WHEREOF, the Holder hereby agrees, for the benefit of the Call Option Holder, to its obligations under any Call Options evidenced by this instrument, and the Holder hereby acknowledges, for the benefit of the Call Option Holder, that the Pledged Securities evidenced by this instrument are subject to the Pledge under the Pledge Agreement. HOLDER SPECIFIED ABOVE By: The Bank of New York, as Attorney-in-Fact of such Holder By: ------------------------------- Dated: Unit Agent's Certificate of Authentication This is one of the Unit Certificates referred to in the within mentioned Master Unit Agreement. The Bank of New York, as Unit Agent By: ----------------------- A-6 71 SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon settlement on or after the Stock Purchase Date of the Purchase Contracts underlying the number of Normal Units evidenced by this Unit Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: --------------------------- ---------------------------------- Signature* If shares are to be registered in the REGISTERED HOLDER name of and delivered to a Person other than the Holder, please print Person's Please print name and address of name and address: such Registered Holder: - ---------------------------------- ---------------------------------- Name Name - ---------------------------------- ---------------------------------- Address Address - ---------------------------------- ---------------------------------- Social Security or other Taxpayer Identification Number, if any ---------------------------------- * Signature must be guaranteed by an eligible Guarantor Institution (banks, stockbrokers, savings and loan associations and credit unions) with membership in an approved signature medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if Common Stock is to be delivered other than to, and in the name of, the registered Holder. A-7 72 REQUEST TO CREATE STRIPPED UNITS The undersigned Holder directs that (a) the Pledged Securities underlying the number of Normal Units indicated below (which number does not exceed the number of Normal Units evidenced by this Unit Certificate) be released from the Pledge and registered in the name of, and delivered to, the undersigned at the address indicated below unless a different name and address have been indicated below and (b) a corresponding number of Stripped Units be registered in the name of, and delivered to, the undersigned at the address indicated below unless a different name and address have been indicated below. If the released Pledged Securities or the Stripped Units are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. The undersigned confirms that the requisite Treasury Securities, any required cash and the instrument from the Call Option Holder have been delivered to the Collateral Agent. Dated: --------------------------- ---------------------------------- Signature* If shares are to be registered in the REGISTERED HOLDER name of and delivered to a Person other than the Holder, please print Person's Please print name and address of name and address: such Registered Holder: - ---------------------------------- ---------------------------------- Name Name - ---------------------------------- ---------------------------------- Address Address - ---------------------------------- ---------------------------------- Social Security or other Taxpayer Identification Number, if any ---------------------------------- If Stripped Units are to be registered in the name of and delivered to a Person other than the Holder, please print such Person's name and address: 67 * Signature must be guaranteed by an eligible Guarantor Institution (banks, stockbrokers, savings and loan associations and credit unions) with membership in an approved signature medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if Pledged Securities or Stripped Units are to be delivered other than to, and in the name of, the registered Holder. A-8 73 EXHIBIT B FORM OF STRIPPED UNIT CERTIFICATE CMS ENERGY CORPORATION _____% ADJUSTABLE CONVERTIBLE SECURITY UNITS (STATED AMOUNT $____ PER UNIT) CUSIP No. _______ No. _____ _____ Stripped Units This Unit Certificate certifies that ____________ is the registered Holder of the number of Stripped Units set forth above. Each Stripped Unit represents the right to purchase Common Stock under a Purchase Contract with CMS Energy Corporation, a Michigan corporation (the "Company"), together with ownership of the Treasury Securities pledged to secure the obligations referred to in (a) below, subject to (a) the obligations owed to the Company under such Purchase Contract and (b) the pledge arrangements securing the foregoing obligations. Each Purchase Contract evidenced hereby is governed by a Master Unit Agreement, dated as of __________ (the "Master Unit Agreement"), between the Company and The Bank of New York, as unit agent (herein called the "Unit Agent"). All terms used herein which are defined in the Master Unit Agreement have the meanings set forth therein. The Pledge of the Pledged Securities evidenced hereby is governed by the Pledge Agreement. Reference is hereby made to the Master Unit Agreement and the Pledge Agreement, and any supplemental agreements thereto, for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Unit Agent, the Company, the Collateral Agent and the Holders. The summary contained herein is qualified in its entirety by the provisions of the Principal Agreements, and the Principal Agreements shall govern the rights of the parties to the extent that there is any conflict between such summary and such provisions. Each Purchase Contract evidenced hereby obligates the Holder of this Unit Certificate to purchase, and the Company to sell, on __________ (the "Stock Purchase Date"), at a price equal to $_____ (the "Stated Amount"), a number of shares of Common Stock, par value per share ("Common Stock"), of the Company equal to the Settlement Rate, unless on or prior to the Stock Purchase Date B-1 74 there shall have occurred a Termination Event. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined in the Master Unit Agreement) is greater than or equal to $______ (the "Threshold Appreciation Price"), ___________ of a share of Common Stock per Purchase Contract, (b) if the Applicable Market Value is less than the Threshold Appreciation Price but is greater than $ (the "Floor Price"), a fractional share of Common Stock per Purchase Contract equal to the Stated Amount divided by the Applicable Market Value (rounded to the nearest 1/10,000th of a share or, if there is no nearest 1/10,000th of a share, rounded downward to the nearest 1/10,000th of a share) and (c) if the Applicable Market Amount is less than or equal to the floor Price, shares of Common Stock per Purchase Contract, in each case subject to adjustment as provided in the Master Unit Agreement. No fractional shares of Common Stock will be issued upon settlement of Purchase Contracts, but instead of any fractional interest the Company shall make a cash payment as provided in the Master Unit Agreement. The purchase price for the shares of Common Stock to be purchased pursuant to each Purchase Contract evidenced hereby, if not paid by 10:00 a.m., New York City time, on the Stock Purchase Date, shall be paid by application of payments received by the Company on the Stock Purchase Date from the Collateral Agent pursuant to the Pledge Agreement in respect of the Pledged Securities pledged to secure such Holder's obligations under such Purchase Contract. The Purchase Contracts and the obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights and obligations to receive and pay accrued or deferred Contract Payments, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Unit Agent or the Company, if, on or prior to the Stock Purchase Date, a Termination Event shall have occurred. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Pledged Securities from the Pledge. The Stripped Units shall thereafter represent the right to receive the Pledged Securities forming a part of such Stripped Units in accordance with the provisions of the Master Unit Agreement and the Pledge Agreement. The Company shall pay, on each ________, ________, _______ and __________, commencing ______________ (each, a "Quarterly Payment Date"), in respect of each Purchase Contract evidenced hereby, a fee (the "Contract Payment") accruing on the Stated Amount of such Unit from and including the date of first issuance of any Units at a rate per annum equal to _____% (the "Contract Payment Rate") (computed on the basis of a 360-day year of twelve 30-day months and subject to deferral as described in the Master Unit Agreement), plus any additional fees accrued thereon pursuant to Section 503 of the Master Unit Agreement. [The B-2 75 Company's obligations with respect to Contract Payments shall be, to the extent provided in the Master Unit Agreement, subordinated and subject in right of payment to all Senior Indebtedness. Payments due to the Holder in respect of the Stripped Units evidenced hereby will be payable to the Person in whose name this Unit Certificate (or a Predecessor Unit Certificate) is registered at the close of business on the Record Date next preceding the relevant payment date. The transfer of any Unit Certificate will be registered and Unit Certificates may be exchanged as provided in the Master Unit Agreement. The Unit Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Master Unit Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Unit Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. For so long as the Purchase Contract underlying a Stripped Unit remains in effect, such Stripped Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Stripped Unit in respect of the Pledged Securities and Purchase Contract constituting such Stripped Unit may be transferred and exchanged only as an integrated Stripped Unit. Upon registration of transfer of this Unit Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee) by the terms of the Purchase Contracts evidenced hereby and by the Pledge Agreement, and the transferor shall be released from such obligations. The Company covenants and agrees, and the Holder, by his acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. The Holder of this Unit Certificate, by his acceptance hereof, irrevocably authorizes the Unit Agent to enter into and perform the related Purchase Contracts evidenced hereby on his behalf as his attorney-in-fact, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform his obligations under such Purchase Contracts, consents to the provisions of the Principal Agreements, irrevocably authorizes the Unit Agent to enter into and perform the Pledge Agreement on his behalf as his attorney-in-fact, and consents to and agrees to be bound by the Pledge of the Pledged Securities evidenced hereby pursuant to the Pledge Agreement. Subject to certain exceptions, the provisions of the Principal Agreements may be amended with the consent of the Holders of at least a majority of the Outstanding B-3 76 Units or, if the amendment affects only the Holders of the Normal Units or only the Holders of the Stripped Units, at least a majority of the Outstanding Units comprising Normal Units or Stripped Units, as the case may be. THE PURCHASE CONTRACTS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF. The Company, the Unit Agent and any agent of the Company or the Unit Agent may treat the Person in whose name this Unit Certificate is registered as the owner of the Stripped Units evidenced hereby for the purpose of receiving payments of distributions or interest on the Pledged Securities, receiving the rights and performing the obligations under the Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Unit Agent nor any such agent shall be affected by notice to the contrary. THE PURCHASE CONTRACTS SHALL NOT, PRIOR TO THE SETTLEMENT THEREOF, ENTITLE THE HOLDER TO ANY OF THE RIGHTS OF A HOLDER OF SHARES OF COMMON STOCK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF. Copies of the Principal Agreements are available for inspection at the offices of the Unit Agent. Unless the certificate of authentication hereon has been executed by the Unit Agent by manual signature, this Unit Certificate shall not be entitled to any benefit under the Principal Agreements or be valid or obligatory for any purpose. B-4 77 IN WITNESS WHEREOF, the Company and the Holder hereby agree to their respective obligations under the Purchase Contracts evidenced by this instrument, and the Holder hereby acknowledges that the Pledged Securities evidenced by this instrument are subject to the Pledge under the Pledge Agreement. CMS ENERGY CORPORATION By: -------------------------------- Attest: ------------------------ HOLDER SPECIFIED ABOVE By: The Bank of New York, as Attorney-in-Fact of such Holder By: -------------------------------- Dated: Unit Agent's Certificate of Authentication This is one of the Unit Certificates referred to in the within mentioned Master Unit Agreement. The Bank of New York, as Unit Agent By: ---------------------------- B-5 78 SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon settlement on or after the Stock Purchase Date of the Purchase Contracts underlying the number of Stripped Units evidenced by this Unit Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: --------------------------- ---------------------------------- Signature* If shares are to be registered in the REGISTERED HOLDER name of and delivered to a Person other than the Holder, please print Person's Please print name and address of name and address: such Registered Holder: - ---------------------------------- ---------------------------------- Name Name - ---------------------------------- ---------------------------------- Address Address - ---------------------------------- ---------------------------------- Social Security or other Taxpayer Identification Number, if any ---------------------------------- * Signature must be guaranteed by an eligible Guarantor Institution (banks, stockbrokers, savings and loan associations and credit unions) with membership in an approved signature medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if Common Stock is to be delivered other than to, and in the name of, the registered Holder. The Sponsor will provide a copy of the Declaration, the Indenture, the Trust Preferred Securities Guarantee or the Common Trust Securities Guarantee (as may be appropriate) and the Indenture (including any supplemental indenture) to a Holder without charge on written request to the Sponsor at its principal place of business. B-6 79 EXHIBIT A-1 FORM OF TRUST PREFERRED SECURITIES FORM OF FACE OF SECURITY [IF THIS TRUST PREFERRED SECURITY ("TRUST PREFERRED SECURITY") IS A GLOBAL SECURITY, INSERT: THIS QUARTERLY INCOME PREFERRED SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING AGENCY. THIS TRUST PREFERRED SECURITY IS EXCHANGEABLE FOR TRUST PREFERRED SECURITY REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS TRUST PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS TRUST PREFERRED SECURITY AS A WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.] [UNLESS THIS TRUST PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK), A NEW YORK CORPORATION, TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY TRUST PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] Certificate Number Number of Trust Preferred Securities CUSIP NO. AA-1 80 Certificate Evidencing Trust Preferred Securities of CMS Energy Trust II __% Trust Preferred Securities (liquidation amount $1,000 per Trust Preferred Security) CMS Energy Trust II, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that __________ (the "Holder") is the registered owner of _____ securities of the Trust representing preferred undivided beneficial interests in the assets of the Trust designated the ___% Trust Preferred Securities (liquidation amount $1,000 per Trust Preferred Security (the "Trust Preferred Securities"). Subject to the terms of the Declaration (as defined below), the Trust Preferred Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Trust Preferred Securities represented hereby are issued and shall in all respects be subject to the provisions of the Amended and Restated Declaration of Trust of the Trust dated as of July , 1999, as the same may be amended from time to time (the "Declaration"), including the designation of the terms of the Trust Preferred Securities as set forth in Annex I to the Declaration. Capitalized terms used but not defined herein shall have the meaning given them in the Declaration. The Sponsor will provide a copy of the Declaration, the Trust Preferred Securities Guarantee and the Indenture to a Holder without charge upon written request to the Trust at its principal place of business. Upon receipt of this certificate, the Holder is bound by the Declaration and is entitled to the benefits thereunder and to the benefits of the Trust Preferred Securities Guarantee to the extent provided therein. By acceptance, the Holder agrees to treat, for United States Federal income tax purposes, the Trust as a grantor trust, the Debentures as indebtedness and the Trust Preferred Securities as evidence of indirect beneficial ownership in the Debentures. IN WITNESS WHEREOF, the Trust has executed this certificate this _____ day of July, 1999. CMS ENERGY TRUST II By: ----------------------------- Name: Title: Administrator AA-2 81 PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Trust Preferred Securities referred to in the within-mentioned Declaration. Dated: --------------- THE BANK OF NEW YORK, not in its individual capacity, but solely as Property Trustee By: ------------------------------- Authorized Signatory AA-3 82 FORM OF REVERSE OF SECURITY Distributions payable on each Trust Preferred Security will be fixed at a rate per annum of ___% until the Call Option Expiration Date, and at the Reset Rate thereafter (the "Coupon Rate") of the liquidation amount of $1,000 per Trust Preferred Security, such rate being the rate of interest payable on the Debentures to be held by the Property Trustee. Distributions in arrears for more than one quarterly period will bear interest thereon compounded quarterly at the Coupon Rate (to the extent permitted by applicable law). The term "Distributions", as used herein, includes such cash distributions and any such interest unless otherwise stated. A Distribution is payable only to the extent that payments are made in respect of the Debentures held by the Property Trustee and to the extent the Property Trustee has funds on hand legally available therefor. Distributions on the Trust Preferred Securities will be cumulative, will accumulate from the most recent date to which Distributions have been paid or, if no Distributions have been paid, from July , 1999 and will be payable quarterly in arrears, on , , , and of each year, commencing on , 1999, except as otherwise described below. Distributions will be computed on the basis of a 360-day year consisting of twelve 30-day months. As long as no Event of Default has occurred and is continuing under the Indenture, the Debenture Issuer has the right under the Indenture to elect to defer payments of interest by extending the interest payment period at any time and from time to time on the Debentures (each an "Extension Period"), provided that no Extension Period shall end on a date other than an Interest Payment Date for the Debentures or extend beyond the Maturity Date of the Debentures. As a consequence of such deferral, Distributions will also be deferred. Despite such deferral, quarterly Distributions will continue to accumulate with interest thereon (to the extent permitted by applicable law, but not at a rate exceeding the rate of interest then accruing on the Debentures) at the Coupon Rate compounded quarterly during any such Extension Period. Prior to the termination of any such Extension Period, the Debenture Issuer may further defer payments of interest by further extending such Extension Period; provided that such Extension Period may not extend beyond the Maturity Date of the Debentures. Payments of accumulated Distributions will be payable to Holders as they appear on the books and records of the Trust on the first record date after the end of the Extension Period. Upon the termination of any Extension Period and the payment of all amounts then due, the Debenture Issuer may commence a new Extension Period, subject to the above requirements. Subject to the conditions set forth in the Declaration and the Indenture, the Property Trustee may, at the direction of the Sponsor, at any time dissolve the Trust AA-4 83 and, after satisfaction of liabilities to creditors of the Trust as required by applicable law, cause the Debentures to be distributed to the holders of the Securities in liquidation of the Trust. The Trust Preferred Securities will be subject to mandatory redemption on the Maturity Date of the Debentures as provided in the Declaration. The Trust Preferred Securities and the rights of the Holders shall be governed by and interpreted in accordance with the laws of the State of Delaware and all rights and remedies shall be governed by such laws without regard to principles of conflict of laws. AA-5 84 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Security to: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert assignee's social security or tax identification number) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert address and zip code of assignee) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- and irrevocably appoints agent to transfer this Security on the books of the Trust. The agent may substitute another to act for him or her. Date: -------------------- Signature: ------------------------------ (Sign exactly as your name appears on the other side of this Security) Signature Guarantee(1): -------------------------------- - --------------------- (1) Signature must be guaranteed by an "eligible guarantor institution" that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Registrar, which requirements include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities and Exchange Act of 1934, as amended. AA-6 85 NOTICE TO REQUIRE EXERCISE OF JUNIOR SUBORDINATED DEBENTURE PUT OPTION The undersigned holder of this Security hereby irrevocably exercises the right to require the Trust to distribute to the Put Agent Debentures having an aggregate principal amount equal to the Liquidation Amount of the number of Trust Preferred Securities listed below (which number does not exceed the number evidenced hereby) in exchange for such number of Trust Preferred Securities, on the Put Date indicated below in connection with the concurrent exercise by the Put Agent on behalf of the holder of this Security of the Debenture Put Option related hereto on such date. Pursuant to the aforementioned exercise of the right to require the Trust to distribute to the Put Agent Debentures in exchange for such number of Trust Preferred Securities, the undersigned hereby directs the Property Trustee to take any actions necessary to effect the exchange of such number of Trust Preferred Securities for such principal amount of Debentures. Date: ------------------- Put Date (check one) Stock Purchase Date - ----- Final Put Date - ----- Number of Trust Preferred Securities (not to exceed number of Trust Preferred Securities evidenced hereby) Signature: ----------------------------- (Sign exactly as your name appears on the other side of this Security) Please Print or Type Name and Address, Including Zip Code, and Social Security or Other Identifying Number - -------------------------- - -------------------------- - -------------------------- Signature Guarantee(1): -------------------------------- - ------------------ (1) Signature must be guaranteed by an "eligible guarantor institution" that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Registrar, which requirements include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities and Exchange Act of 1934, as amended. AA-7 EX-4.(U) 4 FORM OF PLEDGE AGREEMENT 1 EXHIBIT 4(u) - -------------------------------------------------------------------------------- CMS ENERGY CORPORATION DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION as Call Option Holder THE CHASE MANHATTAN BANK as Collateral Agent AND THE BANK OF NEW YORK, as Unit Agent and as Attorney-In-Fact ------------------------- PLEDGE AGREEMENT ------------------------- Dated as of July , 1999 ---- - -------------------------------------------------------------------------------- 2 PLEDGE AGREEMENT PLEDGE AGREEMENT, dated as of July __, 1999 among CMS Energy Corporation, a Michigan corporation (the "Company", as such term is more fully defined in the Master Unit Agreement referred to below), Donaldson, Lufkin & Jenrette Securities Corporation, as Call Option Holder, The Chase Manhattan Bank, and The Bank of New York, as Unit Agent and as attorney-in-fact of the Holders from time to time of the Units. RECITALS The Company and the Unit Agent are parties to the Master Unit Agreement, dated as of the date hereof (as the same may be supplemented or amended from time to time in accordance with the terms thereof, the "Master Unit Agreement"). The Master Unit Agreement contemplates that the Trust Preferred Securities, Junior Subordinated Debentures and Treasury Securities that from time to time underlie the Units be pledged to the Collateral Agent to secure the obligations of the Holders of Units under the Purchase Contracts and Call Options that underlie such Units. Pursuant to the terms of the Principal Agreements and the Unit Certificates, the Holders from time to time of the Units irrevocably authorize the Unit Agent, as attorney-in-fact of such Holders, to execute and deliver this Agreement on behalf of such Holders and to grant the pledge provided hereby of the Pledged Securities underlying such Units as provided herein and subject to the terms hereof. Accordingly, the Company, the Call Option Holder, the Collateral Agent and the Unit Agent, in its capacity as Unit Agent and as attorney-in-fact of the Holders from time to time of the Units, agree as follows: SECTION 1. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) capitalized terms used herein and not defined are used herein as defined in the Master Unit Agreement; and (b) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. "Aggregate Consideration Deliverable on Exercise of the Call Options" has the meaning specified in the Call Option Agreement. 3 "Agreement" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof. "Applicable Treasury Regulations" means Subpart O-Book-Entry Procedure of Title 31 of the Code of Federal Regulations (31 CFR Section 306.115 et seq.) and any other regulations of the United States Treasury Department from time to time applicable to the transfer or pledge of book-entry Treasury Securities. "Date of Deemed Receipt" means, with respect to any payment received by the Collateral Agent, the date of receipt thereof; provided, however, that if such payment is received on a date which is not a Quarterly Payment Date and is not either a payment in respect of defaulted distributions or interest on Trust Preferred Securities or Junior Subordinated Debentures or a payment comprising a part of the Aggregate Consideration Deliverable on Exercise of the Call Options, "Date of Deemed Receipt" means, with respect to such payment, the Quarterly Payment Date next succeeding such date of receipt. "Present Value" shall have the meaning set forth in Section 5(g). SECTION 2. The Pledge. The Holders from time to time of the Units acting through the Unit Agent, as their attorney-in-fact, hereby pledge to the Collateral Agent (for the benefit of the Company and the Call Option Holder as their interests may appear), and grant to the Collateral Agent, the Company and the Call Option Holder (as their interests may appear) a security interest in all of the right, title and interest of such Holders in and to the Pledged Securities underlying such Units (and proceeds therefrom), as collateral security to ensure the performance when due by such Holders of their respective obligations under the Purchase Contracts and Call Options underlying such Units. Concurrently with the execution of this Agreement, the initial Holders of the [first] ____________ Normal Units issued under the Master Unit Agreement, the Unit Agent and the Collateral Agent are causing ________ Trust Preferred Securities to be delivered to, and registered in the name of, the Collateral Agent, and such Trust Preferred Securities will thereupon constitute Pledged Securities forming a part of such Normal Units. As used in this Section 2, the term "delivery" shall have the meaning ascribed to it in the Uniform Commercial Code of the State of New York. [In the event that any or all of the additional __________ Normal Units that may be issued as a result of an exercise of the overallotment option of the underwriters under the Underwriting Agreement are issued pursuant to the Master Unit Agreement at or after the execution of this Agreement, the initial Holders of such Normal Units, the Unit Agent and the Collateral Agent shall cause a number of 2 4 Trust Preferred Securities equal to the number of such Normal Units to be delivered to, and registered in the name of, the Collateral Agent, and such Trust Preferred Securities will thereupon constitute Pledged Securities forming a part of such Normal Units.] In addition, the execution hereof by the Unit Agent and the Collateral Agent shall constitute an acknowledgment by the Collateral Agent (as securities intermediary or otherwise) of the Pledge and of its holding of such Trust Preferred Securities or other Pledged Securities substituted therefor in accordance with the provisions hereof subject to the Pledge and of its crediting such Trust Preferred Securities or other Pledged Securities to a separate account for purposes of perfecting the Pledge under applicable law, including, to the extent applicable, the Uniform Commercial Code as adopted and in effect in any applicable jurisdiction and the Applicable Treasury Regulations. Subject to the Pledge, the Holders from time to time of the Units shall have full beneficial ownership of the Pledged Securities underlying such Units, and shall be entitled (directly or through the Collateral Agent) to all of the rights provided by such Pledged Securities, and the Company and the Call Option Holder shall have no rights with respect to such Pledged Securities other than their respective security interests therein. SECTION 3. Payments in Respect of the Pledged Securities. Any payment received by the Collateral Agent in respect of the Pledged Securities underlying any Normal Units or Stripped Units shall be paid by the Collateral Agent, by wire transfer in same day funds no later than 1:00 p.m., New York City time, on the Date of Deemed Receipt (or, if the Date of Deemed Receipt is not a Business Day or if such payment is received by the Collateral Agent after noon, New York City time, on the Date of Deemed Receipt, then such payment shall be made by the Collateral Agent no later than 10:00 a.m., New York City time, on the next succeeding Business Day), as follows: (a) in the case of payments not scheduled to fall on and that are not in respect of amounts due on the Stock Purchase Date, (i) first, to the Company, to the account designated by it for such purpose, in an amount equal to the Contract Fees, if any, then payable to the Company in respect of such Units, and (ii) second, to the extent of any amount remaining after the payment (if any) referred to in clause (i) above, to the Unit Agent, to the account designated by it for payments in respect of Normal Units or the account designated by it for payments in respect of Stripped Units, as the case may be; and (b) in the case of payments scheduled to fall on or that are in respect of amounts due on the Stock Purchase Date, (i) with respect to payments received in respect of Units which are Paid Units (as specified in the notice from the Unit Agent 3 5 referred to in Section 4), to the Unit Agent, to the account designated by it for payments in respect of Paid Units which are Normal Units or the account designated by it for payments in respect of Paid Units which are Stripped Units, as the case may be; and (ii) with respect to payments received in respect of Units which are Unpaid Units (as specified in the notice from the Unit Agent referred to in Section 4), to the Unit Agent, to the account designated by it for payments in respect of Unpaid Units which are Normal Units; provided, however, that if the Company disputes the notice from the Unit Agent referred to in Section 4 and notifies the Collateral Agent, prior to noon, New York City time, on the Stock Purchase Date, that the number of Paid Units or the number of Unpaid Units (or both) is different than that indicated in such notice, the foregoing payments with respect to any Paid Units or Unpaid Units subject to dispute shall not be paid until such dispute is resolved. All payments received by the Unit Agent as provided herein shall be applied by the Unit Agent pursuant to the provisions of the Master Unit Agreement. SECTION 4. Notice with Respect to Numbers of Paid Units and Unpaid Units; Exercise of Junior Subordinated Debenture Put Options with Respect to Unpaid Units. By 11:00 a.m., New York City time, on the Stock Purchase Date, the Unit Agent shall, as provided in the Master Unit Agreement, notify the Company and the Collateral Agent as to the number of Normal Units and the number of Stripped Units, respectively, which are Paid Units and the number of Normal Units and the number of Stripped Units, respectively, which are Unpaid Units. Promptly after receiving such notification, (a) if Trust Preferred Securities underlie the Unpaid Units of any Holder, the Collateral Agent, on behalf of such Holder, shall exercise such Holder's right under the Declaration to require the Trust to distribute Junior Subordinated Debentures having an aggregate principal amount equal to the aggregate liquidation amount of such Trust Preferred Securities, in exchange for such Trust Preferred Securities, and, upon receiving such Junior Subordinated Debentures, shall thereupon, as Put Agent, exercise the Junior Subordinated Debenture Put Option with respect thereto and (b) if Junior Subordinated Debentures underlie such Unpaid Units, the Collateral Agent, on behalf of such Holder, shall, as Put Agent, exercise the Junior Subordinated Debenture Put Option with respect thereto. The payment received by the Collateral Agent from the exercise of any Junior Subordinated Debenture Put Option shall then be applied by the Collateral Agent in accordance with Section 3(b). SECTION 5. Release and Substitution of Pledged Securities. (a) Upon notice to the Collateral Agent by the Company or the Unit Agent that there has occurred a Termination Event, the Collateral Agent shall release all Pledged Securities from the Pledge and shall transfer, without recourse, such released Pledged Securities, free and 4 6 clear of any lien, pledge or security interest created hereby, to the Unit Agent for delivery by the Unit Agent pursuant to the provisions of the Master Unit Agreement. (a) Upon notice to the Collateral Agent by the Call Option Holder that the Call Option Holder is exercising the Call Options in accordance with the terms of the Call Option Agreement with respect to the Trust Preferred Securities or Junior Subordinated Debentures underlying the Normal Units, provided that the Collateral Agent receives the requisite Aggregate Consideration Deliverable on Exercise of the Call Options on the Call Settlement Date specified in such notice, the Collateral Agent shall release such Trust Preferred Securities or Junior Subordinated Debentures from the Pledge and transfer, without recourse, such released Trust Preferred Securities or Junior Subordinated Debentures, free and clear of any lien, pledge or security interest created hereby, to the Call Option Holder or its designee as specified in such notice, whereupon (i) the Treasury Securities constituting all or a part of the Aggregate Consideration Deliverable On Exercise of the Call Options so received by the Collateral Agent shall be subject to the Pledge with respect to the Normal Units and (ii) the Pledge shall cease to constitute a security interest for the benefit of the Call Option Holder. (b) In connection with a Stripped Unit Creation, upon request by the Unit Agent to the Collateral Agent to release the then Pledged Securities underlying the number of Normal Units indicated in such request, provided that the Collateral Agent has received (i) the Treasury Securities and cash required by Section 309(a)(i) of the Master Unit Agreement for a Stripped Unit Creation relating to such Normal Units and (ii) if the Call Options underlying such Normal Units remain exercisable on the date of receipt of such instruction, an instrument from the Call Option Holder releasing its security interest in the Pledged Securities underlying such Normal Units and agreeing that such Call Options no longer underlie such Normal Units (or the Stripped Units, they become), the Collateral Agent shall release such Pledged Securities from the Pledge and transfer, without recourse, such released Pledged Securities, free and clear of any lien, pledge or security interest created hereby, to the Unit Agent for delivery by the Unit Agent pursuant to the provisions of the Master Unit Agreement, whereupon the Treasury Securities so received by the Collateral Agent in connection with such Stripped Unit Creation shall be subject to the Pledge and constitute the Pledged Securities underlying the Stripped Units so created. (c) In connection with the delivery to the Collateral Agent of Treasury Securities and cash pursuant to Section 5(b) or (c), such delivery shall be by Federal Reserve Bank-Wire to the account of the Collateral Agent designated by it for such purpose, and the Collateral Agent and the Call Option Holder or transferring Holder 5 7 of Normal Units, as the case may be, shall take appropriate action (i) so that the applicable Federal Reserve Bank through which such Treasury Securities have been purchased will reflect such transfer and the Pledge of such Treasury Securities in accordance with Applicable Treasury Regulations and (ii) as may be required to perfect the Pledge under Applicable Treasury Regulations. (d) In the event the Trust is dissolved while any Trust Preferred Securities are Pledged Securities underlying Normal Units, the Junior Subordinated Debentures issued upon dissolution thereof shall be delivered to the Collateral Agent in exchange for such Trust Preferred Securities, whereupon such Trust Preferred Securities shall cease to constitute Pledged Securities and the Junior Subordinated Debentures so received by the Collateral Agent shall be subject to the Pledge and constitute the Pledged Securities underlying such Normal Units. (e) On the Stock Purchase Date, the Collateral Agent shall release the Trust Preferred Securities or Junior Subordinated Debentures underlying Units which are Paid Units (as specified in the notice from the Unit Agent referred to in Section 4) from the Pledge and transfer, without recourse, such released Trust Preferred Securities or Junior Subordinated Debentures, free and clear of any lien, pledge or security interest created hereby, to the Unit Agent for delivery pursuant to the provisions of the Master Unit Agreement; provided, however, that if the Company disputes the notice from the Unit Agent referred to in Section 4 and notifies the Collateral Agent, prior to noon, New York City time, on the Stock Purchase Date, that the number of Paid Units is different from that indicated in such notice, the foregoing release with respect to any Paid Units subject to dispute shall not be made until such dispute is resolved. (f) The Call Option Holder will deliver to a holder wishing to create a Stripped Unit the instrument referred to in Section 5 (c) (ii) upon the receipt of cash from such holder in an amount equal to the Present Value of each Call Option, at such time, relating to such Trust Preferred Security that the holder wishes to have released. "PRESENT VALUE" means, with respect to each Call Option relating to the Trust Preferred Securities which the holder of Normal Units seeks to replace with Treasury Securities, the present value of 0.60% of the Stated Amount on the Substitution Date of such Call Option, which shall be computed using a discount rate equal to the Treasury Rate. For purposes of this definition, the Present Value of the Call Option will be determined in good faith by the Call Option Holder in accordance with generally accepted principles of financial analysis. 6 8 "TREASURY RATE" means the bond equivalent yield on United States Treasury notes or bills having a term interest nearest in length to the length of the period from the Substitution Date to the Call Option Expiration Date. "SUBSTITUTION DATE" means the date on which a holder of Normal Units exercises its right to substitute Treasury Securities for Pledged Securities. SECTION 6. Rights and Remedies. (a) The Collateral Agent shall have all of the rights and remedies with respect to the Pledged Securities of a secured party under the Uniform Commercial Code as in effect in the State of New York (the "Code") (whether or not said Code is in effect in the jurisdiction where the rights and remedies are asserted) and, with respect to Pledged Securities which are Treasury Securities, the Applicable Treasury Regulations, and such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction where any rights and remedies hereunder may be asserted. (a) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, in the event the Collateral Agent is unable to make payments due to the Company pursuant to the Purchase Contracts underlying any Units, the Collateral Agent shall have and may exercise, with reference to the Pledged Securities underlying such Units and the obligations of the Holders of such Units, any and all of the rights and remedies available to a secured party under the Code and the Applicable Treasury Regulations after default by a debtor, and as otherwise granted herein or under any other law. (b) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably authorized to receive and collect all payments of principal of or distributions or interest on the Pledged Securities, in each case subject to the provisions hereof. (c) The Unit Agent, the Call Option Holder and each Holder of Units agree that, from time to time, upon the written request of the Collateral Agent, the Unit Agent, the Call Option Holder or such Holder of Units shall execute and deliver such further documents and do such other acts and things as the Collateral Agent may reasonably request in order to maintain the Pledge, and the perfection and priority thereof, and to confirm the rights of the Collateral Agent hereunder. SECTION 7. The Collateral Agent. The Collateral Agent, the Company and the Call Option Holder hereby agree among themselves as follows (it being under- 7 9 stood and agreed that, except as provided in Section 7.08, neither the Unit Agent nor any Holder of Units shall have any rights or duties under this Section 7): 7.1 Appointment, Powers and Immunities. The Collateral Agent shall act hereunder as agent for the Company and the Call Option Holder, with such powers as are specifically vested in the Collateral Agent by the terms of this Agreement, together with such other powers as are reasonably incidental thereto. The Collateral Agent: (a) shall have no duties or responsibilities except those expressly set forth in this Agreement and no implied covenants or obligations shall be inferred from this Agreement against the Collateral Agent, nor shall the Collateral Agent be bound by the provisions of any agreement by any party hereto beyond the specific terms hereof; (b) shall not be responsible to the Company or the Call Option Holder for any recitals contained in this Agreement, or in any certificate or other document referred to or provided for in, or received by it under, this Agreement, the Units, the Master Unit Agreement, or the Call Option Agreement or for the value, validity, effective ness, genuineness, enforceability or sufficiency of this Agreement (other than as against the Collateral Agent), the Units, the Master Unit Agreement or the Call Option Agreement or any other document referred to or provided for herein or therein or for any failure by the Company, the Call Option Holder, or any other Person (except the Collateral Agent) to perform any of its obligations hereunder or thereunder; (c) shall not be required to initiate or conduct any litigation or collection proceedings hereunder (except pursuant to directions furnished under Section 7.2 hereof); (d) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other document or instrument referred to or provided for herein or in connection herewith or therewith, except for its own negligence; and (e) shall not be required to advise any party as to selling or retaining, or taking or refraining from taking any action with respect to, any Units or any property deposited hereunder. Subject to the foregoing, during the term of this Agreement the Collateral Agent shall take all reasonable action in connection with the safekeeping and preservation of the Pledged Securities hereunder. No provision of this Agreement shall require the Collateral Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. In no event shall the Collateral Agent be liable for any amount in excess of the value of the Pledged Securities. 7.2 Instructions of the Company. The Company (or, with respect to matters relating to the Call Options, the Call Option Holder) shall have the right, by one or more instruments in writing executed and delivered to the Collateral Agent, to direct the time, method and place of conducting any proceeding for any right or remedy 8 10 available to the Collateral Agent, or of exercising any power conferred on the Collateral Agent, or to direct the taking or refraining from taking of any action authorized by this Agreement; provided, however, that (a) no Company direction shall in any way adversely affect the rights of the Call Option Holder hereunder or under the Call Options and no Call Option Holder direction shall in any way adversely affect the rights of the Company hereunder or under the Purchase Contracts, (b) such direction shall not conflict with the provisions of any law or of this Agreement and (c) the Collateral Agent shall be adequately indemnified as provided herein. Nothing in this Section 7.2 shall impair the right of the Collateral Agent in its discretion to take any action or omit to take any action which it deems proper and which is not inconsistent with such direction. 7.3 Reliance by Collateral Agent. The Collateral Agent shall be entitled to rely upon any certification, order, judgment, opinion, notice or other communication (including, without limitation, any thereof by telephone, telecopy, telex, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons (without being required to determine the correctness of any fact stated therein), and upon advice and statements of legal counsel and other experts selected by the Collateral Agent. As to any matters not expressly provided for by this Agreement, the Collateral Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with instructions given by the Company or the Call Option Holder, as the case may be, in accordance with this Agreement. 7.4 Rights in Other Capacities. The Collateral Agent and its affiliates may (without having to account therefor to the Company or the Call Option Holder) accept deposits from, lend money to, make investments in and generally engage in any kind of banking, trust or other business with the Unit Agent and any Holder of Units as if it were not acting as the Collateral Agent, and the Collateral Agent and its affiliates may accept fees and other consideration from the Unit Agent and any Holder of Units without having to account for the same to the Company or the Call Option Holder, provided that the Collateral Agent covenants and agrees with the Company and the Call Option Holder that the Collateral Agent shall not accept, receive or permit there to be created in its favor any security interest, lien or other encumbrance of any kind in or upon the Pledged Securities. 7.5 Non-Reliance on Collateral Agent. The Collateral Agent shall not be required to keep itself informed as to the performance or observance by the Unit Agent or any Holder of Units of this Agreement, the Master Unit Agreement, the Call Option Agreement, the Units or any other document referred to or provided for 9 11 herein or therein or to inspect the properties or books of the Unit Agent or any Holder of Units. The Collateral Agent shall not have any duty or responsibility to provide the Company or the Call Option Holder with any credit or other information concerning the affairs, financial condition or business of the Unit Agent or any Holder of Units that may come into the possession of the Collateral Agent or any of its affiliates. 7.6 Compensation and Indemnity. The Company agrees: (a) to pay the Collateral Agent from time to time reasonable compensation for all services rendered by it hereunder and (b) to indemnify the Collateral Agent for, and to hold it harmless against, any loss, liability or expense including taxes (other than taxes based upon, measured by or determined by the income of the Collateral Agent) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of its powers and duties under this Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of such powers and duties. 7.7 Failure to Act. In the event of any ambiguity in the provisions of this Agreement or any dispute between or conflicting claims by or among the under signed and/or any other person or entity with respect to any funds or property deposited hereunder, the Collateral Agent shall be entitled, at its sole option, to refuse to comply with any and all claims, demands or instructions with respect to such property or funds so long as such dispute or conflict shall continue, and the Collateral Agent shall not be or become liable in any way to any of the undersigned for its failure or refusal to comply with such conflicting claims, demands or instructions. The Collateral Agent shall be entitled to refuse to act until either (a) such conflicting or adverse claims or demands shall have been finally determined by a court of competent jurisdiction or settled by agreement between the conflicting parties as evidenced in a writing satisfactory to the Collateral Agent or (b) the Collateral Agent shall have received security or an indemnity satisfactory to the Collateral Agent sufficient to save the Collateral Agent harmless from and against any and all loss, liability or expense which the Collateral Agent may incur by reason of its acting. The Collateral Agent may in addition elect to commence an interpleader action or seek other judicial relief or orders as the Collateral Agent may deem necessary. Notwithstanding anything contained herein to the contrary, the Collateral Agent shall not be required to take any action that is in its opinion contrary to law or to the terms of this Agreement, or which would in its opinion subject it or any of its officers, employees or directors to liability. 10 12 7.8 Resignation of Collateral Agent. Subject to the appointment and acceptance of a successor Collateral Agent as provided below, (a) the Collateral Agent may resign at any time by giving notice thereof to the Company, the Unit Agent and, if the Call Options are exercisable or have been exercised but not settled, the Call Option Holder, (b) the Collateral Agent may be removed at any time by the Company (provided, that, if the Call Options are exercisable or have been exercised but not settled, the Call Option Holder shall have consented to such removal), and (c) if the Collateral Agent fails to perform any of its material obligations hereunder in any material respect for a period of not less than 20 days after receiving notice of such failure by the Unit Agent and such failure shall be continuing, the Collateral Agent may be removed by the Unit Agent. The Unit Agent shall promptly notify the Company and, if the Call Options are exercisable or have been exercised but not settled, the Call Option Holder of any removal of the Collateral Agent pursuant to clause (c) of the immediately preceding sentence. Upon any such resignation or removal, the Company and, if the Call Options are exercisable or have been exercised but not settled, the Call Option Holder shall have the right to appoint a successor Collateral Agent. If no successor Collateral Agent shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Collateral Agent's giving of notice of resignation or such removal, then the retiring Collateral Agent may petition any court of competent jurisdiction for the appointment of a successor Collateral Agent. The Collateral Agent shall be a bank which has an office in New York, New York with a combined capital and surplus of at least $50,000,000. Upon the acceptance of any appointment as Collateral Agent hereunder by a successor Collateral Agent, such successor Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall take all appropriate action to transfer any money and property held by it hereunder (including the Pledged Securities) to such successor Collateral Agent. The retiring Collateral Agent shall, upon such succession, be discharged from its duties and obligations as Collateral Agent hereunder. After any retiring Collateral Agent's resignation hereunder as Collateral Agent, the provisions of this Section 7 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Collateral Agent. 7.9 Right to Appoint Agent or Advisor. The Collateral Agent shall have the right to appoint agents or advisors in connection with any of its duties hereunder, and the Collateral Agent shall not be liable for any action taken or omitted by such agents or advisors selected in good faith. 11 13 The provisions of this Section 7 shall survive termination of this Agreement and the resignation or removal of the Collateral Agent. SECTION 8. Miscellaneous. 8.1 Amendments. This Agreement may be amended in the manner set forth in Section 801 of the Master Unit Agreement for supplemental agreements. In executing any amendment permitted by this Section, the Collateral Agent shall be entitled to receive and (subject to Section 7.1 hereof) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and is for a purpose set forth in Section 801 of the Master Unit Agreement. 8.2 No Waiver. No failure on the part of the Collateral Agent or any of its agents to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Collateral Agent or any of its agents of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law. 8.3 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. The Company, the Call Option Holder, the Collateral Agent and the Holders from time to time of the Units, acting through the Unit Agent as their attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in New York City for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Company, the Call Option Holder, the Collateral Agent and the Holders from time to time of the Units, acting through the Unit Agent as their attorney-in-fact, irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. 8.4 Legal Holidays. In any case where any Quarterly Payment Date or the Stock Purchase Date shall not be a Business Day, then (notwithstanding any other provision of this Agreement or of the Units) the actions required by this Agreement to 12 14 occur on such date shall not occur on such date, but instead shall occur on the next succeeding Business Day with the same force and effect as if they had occurred on such Quarterly Payment Date or Stock Purchase Date, as the case may be; except that if such next succeeding Business Day is in the next calendar year, such actions shall occur on the immediately preceding Business Day with the same force and effect as if made on such Quarterly Payment Date or Stock Purchase Date. 8.5 Notices. All notices, requests, consents and other communications provided for herein (including, without limitation, any modifications of, or waivers or consents under, this Agreement) shall be given or made in writing (including, without limitation, by telecopy) delivered to the intended recipient at the "Address for Notices" specified below its name on the signature pages hereof or, as to any party, at such other address as shall be designated by such party in a notice to the other parties. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by telecopier or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. 8.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the Company, the Call Option Holder, the Collateral Agent and the Unit Agent, and the Holders from time to time of the Units, by their acceptance of the same, shall be deemed to have agreed to be bound by the provisions hereof and to have ratified the agreements of, and the grant of the Pledge hereunder by, the Unit Agent, as their attorney-in-fact. 8.7 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. 8.8 Severability. If any provision hereof is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (a) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible and (b) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. 8.9 Expenses, etc. The Company agrees to reimburse the Collateral Agent for: (a) all reasonable out-of-pocket costs and expenses of the Collateral Agent 13 15 (including, without limitation, the reasonable fees and expenses of counsel to the Collateral Agent), in connection with (i) the negotiation, preparation, execution and delivery or performance of this Agreement and (ii) any modification, supplement or waiver of any of the terms of this Agreement; (b) all reasonable costs and expenses of the Collateral Agent (including, without limitation, reasonable fees and expenses of counsel) in connection with (i) any enforcement or proceedings resulting or incurred in connection with causing any Holder of Units to satisfy its obligations under the Purchase Contracts or Call Options forming a part of the Units and (ii) the enforcement of this Section 8.9; and (c) all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any other document referred to herein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated hereby. 8.10 Security Interest Absolute. All rights of the Collateral Agent and security interests hereunder, and all obligations of the Holders from time to time of the Units here under, shall be absolute and unconditional irrespective of: (a) any lack of validity or enforceability of any provision of the Units or any other agreement or instrument relating thereto; (b) any change in the time, manner or place of payment of, or any other term of, or any increase in the amount of, all or any of the obligations of Holders of Units under the related Purchase Contracts or Call Options or any other amendment or waiver of any term of, or any consent to any departure from any requirement of, the Master Unit Agreement or any Units or any other agreement or instrument relating thereto; or (c) any other circumstance which might otherwise constitute a defense available to, or discharge of, a borrower, a guarantor or a pledgor. 14 16 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. CMS ENERGY CORPORATION By: -------------------------------- Name: Title: Address for Notices: Fairlane Plaza South, Suite 1100 330 Town Center Drive Dearborn, Michigan 48126 Attention: General Counsel Telecopy: DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION, as Call Option Holder ----------------------------------- (Donaldson, Lufkin & Jenrette Securities Corporation) Address for Notices: 277 Park Avenue New York, New York 10172 Attention: Registration Department CHASE MANHATTAN BANK, as Collateral Agent By: -------------------------------- Name: Title: 15 17 Address for Notices: ----------------------------------- ----------------------------------- Telecopy: ----------------------------------- Attention: ----------------------------------- THE BANK OF NEW YORK, as Unit Agent and as attorney-in- fact of the Holders from time to time of the Units By: -------------------------------- Name: Title: Address for Notices: ----------------------------------- ----------------------------------- Attention: ------------------------ 16 EX-4.(V) 5 FORM OF CALL OPTION AGREEMENT 1 EXHIBIT 4(v) - -------------------------------------------------------------------------------- DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION, as Call Option Holder AND THE BANK OF NEW YORK, as Unit Agent and as Attorney-In-Fact -------------- CALL OPTION AGREEMENT -------------- Dated as of July , 1999 - -------------------------------------------------------------------------------- 2 CALL OPTION AGREEMENT CALL OPTION AGREEMENT, dated as of July , 1999, between Donaldson, Lufkin & Jenrette Securities Corporation, as Call Option Holder, and The Bank of New York, as Unit Agent and as attorney-in-fact of the Holders from time to time of the Normal Units. RECITALS GF CMS Energy Corporation and the Unit Agent are parties to the Master Unit Agreement, dated as the date hereof (as the same may be supplemented or amended in accordance with the terms thereof, the "Master Unit Agreement"). The Master Unit Agreement contemplates that the Company will issue Trust Preferred Securities and Junior Subordinated Debentures, and that Trust Preferred Securities or Junior Subordinated Debentures will underlie Normal Units outstanding from time to time thereunder. It is intended that the Holders from time to time of the Normal Units grant Call Options entitling the Call Option Holder to acquire the Trust Preferred Securities or Junior Subordinated Debentures underlying the related Normal Units on the terms and subject to the conditions set forth herein. Pursuant to the terms of the Principal Agreements and the Unit Certificates for the Normal Units, the Holders from time to time of the Normal Units irrevocably authorize the Unit Agent, as attorney-in-fact of such Holders, to enter into such Call Options and execute and deliver this Agreement on behalf of such Holders. Accordingly, the Call Option Holder and the Unit Agent, on its own behalf and as attorney-in-fact of the Holders from time to time of the Normal Units, agree as follows: ARTICLE I Definitions Section 1.1 Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) capitalized terms used herein and not defined are used herein as defined in the Master Unit Agreement; and 3 (b) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. "Aggregate Call Option Exercise Consideration" means consideration comprised of: (a) Treasury Securities that through their scheduled payments will generate by each Quarterly Payment Date falling after the Call Settlement Date and on or before the Stock Purchase Date an amount of cash equal to the aggregate distributions or interest payments that are scheduled to be payable in respect of the Trust Preferred Securities or Junior Subordinated Debentures underlying the Normal Units on such Quarterly Payment Date (assuming for this purpose, even if not true, that (i) no distributions or interest payments will then have been deferred and (ii) that the rate of distribution on the Trust Preferred Securities and the rate of interest on the Junior Subordinated Debentures remains at %); (b) Treasury Securities that through their scheduled payments will generate by the Stock Purchase Date an amount of cash equal to the aggregate Stated Amount of the Normal Units; and (c) if the Company is, at the Call Settlement Date, deferring distributions on the Trust Preferred Securities or interest payments on the Junior Subordinated Debentures, an amount in cash equal to (i) the aggregate unpaid distributions on the Trust Preferred Securities or interest payments on the Junior Subordinated Debentures underlying the Normal Units accrued to the Call Settlement Date, if the Call Settlement Date is a Quarterly Payment Date, or (ii) the aggregate unpaid distributions on the Trust Preferred Securities or interest payments on the Junior Subordinated Debentures underlying the Normal Units accrued to the Quarterly Payment Date immediately preceding the Call Settlement Date plus interest thereon at the Deferral Rate for the period from and including such Quarterly Payment Date to but excluding such Call Settlement Date (computed on the basis of a 360-day year of twelve 30-day months), if the Call Settlement Date is not a Quarterly Payment Date. "Call Option Expiration Date" means , 2002 (or, if such date is not a Business Day, the next succeeding Business Day). 2 4 ARTICLE II Call Option Section 2.1 Grant. The Unit Agent, on behalf of and as attorney-in-fact for the Holders from time to time of the Normal Units, hereby grants the Call Options to the Call Option Holder on the terms and subject to the conditions set forth herein. Section 2.2 Consideration. As consideration for such Call Options, concurrently with the execution hereof, the Call Option Holder is paying to the underwriters under the Underwriting Agreement (who are acting in this regard on behalf of the initial investors in the Normal Units) an amount equal to $ per Call Option. Section 2.3 Expiration or Termination of Call Options. The Call Options shall be irrevocable, but the Call Options and the rights of the Call Option Holder and the obligations of the Holders of Normal Units thereunder shall (a) expire on the Call Option Expiration Date if the Call Settlement Date has not occurred on or prior to such date and (b) automatically terminate upon the occurrence of a Termination Event. ARTICLE III Exercise of Call Options Section 3.1 Exercise Mechanics. (a) The Call Option Holder may exercise all (but not less than all) the Call Options by (i) delivering to the Unit Agent and the Collateral Agent, on or prior to the Call Option Expiration Date, a notice, substantially in the form set forth in Annex A attached hereto, stating that the Call Option Holder is exercising its Call Options and specifying the Call Settlement Date therefor (which must be a Business Day falling on or before the Call Option Expiration Date) and (ii) delivering to the Collateral Agent, by Noon, New York City time, on the Call Settlement Date, the Aggregate Call Option Exercise Consideration. (b) Pursuant to the Pledge Agreement, upon receipt by the Collateral Agent of the Aggregate Call Option Exercise Consideration in the manner contemplated hereby and by the Pledge Agreement, the Collateral Agent shall release 3 5 the Trust Preferred Securities or Junior Subordinated Debentures underlying the Normal Units, free and clear of any lien, pledge or security interest created by the Pledge Agreement, and transfer such released Trust Preferred Securities or Junior Subordinated Debentures to the Call Option Holder or its designee as specified in the notice referred to in Section 3.1(a) above. (c) The Unit Agent shall, not later than three Business Days following the Call Settlement Date, mail notice of the exercise of the Call Options to the Holders of Normal Units in the manner prescribed by the Master Unit Agreement. ARTICLE IV Miscellaneous Section 4.1 This Agreement may be amended in the manner set forth in Section 8.01 of the Master Unit Agreement with respect to supplemental agreements. Section 4.2 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. The Call Option Holder, the Unit Agent and the Holders from time to time of the Normal Units, acting through the Unit Agent as their attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in New York City for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Call Option Holder, the Unit Agent and the Holders from time to time of the Normal Units, acting through the Unit Agent as their attorney-in-fact, irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. Section 4.3 Notices. All notices, requests, consents and other communications provided for herein (including, without limitation, any modifications of, or waivers or consents under, this Agreement) shall be given or made in writing (including, without limitation, by telecopy) delivered to the intended recipient at the "Address for Notices"specified below its name on the signature pages hereof or, as to 4 6 any party, at such other address as shall be designated by such party in a notice to the other party. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by telecopier or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. Section 4.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the Call Option Holder and the Unit Agent, and the Holders from time to time of the Normal Units, by their acceptance of the same, shall be deemed to have agreed to be bound by the provisions hereof and to have ratified the agreements of, and the grant of the Call Options hereunder by, the Unit Agent. Section 4.5 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. Section 4.6 Severability. If any provision hereof is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (a) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible and (b) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. 5 7 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION, as Call Option Holder (Donaldson, Lufkin & Jenrette Securities Corporation) Address for Notices: 277 Park Avenue New York, New York 10172 Attention: THE BANK OF NEW YORK, as Unit Agent and as attorney-in-fact of the Holders from time to time of the Normal Units By: ---------------------------------------- Name: Title: Address for Notices: 6 8 ANNEX A EXERCISE NOTICE Reference is made to the Call Option Agreement, dated as of July , 1999 (the "Call Option Agreement"), between Donaldson, Lufkin & Jenrette Securities Corporation, as Call Option Holder, and The Bank of New York, as Unit Agent and attorney-in-fact of the Holders from time to time of the Normal Units. Capitalized terms used herein but not defined are used herein as defined in the Call Option Agreement. The undersigned hereby exercises all of the Call Options underlying the Normal Units and specifies ______________ as the Call Settlement Date. Certificates representing the Trust Preferred Securities or Junior Subordinated Debentures underlying the Normal Units should be registered in the name of ____________ and delivered to [insert address]. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION As Call Option Holder -------------------------------- (Donaldson, Lufkin & Jenrette Securities Corporation) Date: --------------------- 7 EX-99.(A) 6 SUMMARY OF PRINCIPAL TERMS 1 EXHIBIT 99.(a) - -------------------------------------------------------------------------------- CMS ENERGY CORPORATION ("CMS") REDEEMABLE HYBRID INCOME OVERNIGHT SHARES ("RHINOS") ISSUANCE OF TRUST PREFERRED SECURITIES AND FORWARD UNDERWRITING OF CMS COMMON STOCK SUMMARY OF PRINCIPAL TERMS OF TRANSACTION CLOSED JUNE 10, 1999 I. TRUST PREFERRED SECURITIES Trust Securities Issuer: CMS RHINOS Trust Initial Purchaser: A trust organized by Banc of America Securities LLC("BAS") Preferred Issue: Trust Preferred Securities Preferred Issue Size: $250 million Maturity Date: September 1, 2001 Distributions: LIBOR plus 175 basis points, adjusted quarterly Distribution Payments: Quarterly, provided that the Trust may defer such payments (but no later than the Maturity Date or earlier Redemption Date), with such deferred payments compounded quarterly, if CMS defers interest on the Subordinated Notes. Mandatory Redemption: The Trust Preferred Securities are required to be redeemed for the face amount thereof plus accrued and unpaid distributions three months following an underwriting of CMS Common Stock pursuant to the Forward Underwriting Agreement (described below) as follows: (a) if the underwriting is for less than $250 million, Trust Preferred Securities in a face amount equal to the aggregate public offering price of the underwritten shares will be redeemed; and (b) if the underwriting is for an amount equal to or greater than $250 million, the Trust Preferred Securities will be redeemed in full. 2 Remarketing Provisions: If the CMS Common Stock price declines to $29.00 (approximately 66-2/3% of the closing price of the CMS Common Stock on the date preceding closing), the holder of the Trust Preferred Securities will have the option to require BAS as the Remarketing Agent to remarket the Trust Preferred Securities. If remarketed, the maturity of the remarketed securities will be reset as the later of September 1, 2001 or one year from the date on which the remarketed securities are issued. The coupon will be reset pursuant to a bid process to value the remarketed securities at 100.25% of the face amount thereof. II. SUBORDINATED NOTES Debt Issuer: CMS Subordinated Note Purchaser: CMS RHINOS Trust Debt Issue: Subordinated Notes Debt Issue Size: $250 million ($258 million including Subordinated Notes related to Trust Common Securities) Maturity Date: September 1, 2001 Interest: LIBOR plus 175 basis points, adjusted quarterly Interest Payments: Quarterly, provided that CMS may defer such interest payments (but no later than the Maturity Date or earlier Redemption Date), with such deferred payments compounded quarterly. Remarketing Provisions: If under certain circumstances the Trust is dissolved and the Initial Purchaser directly holds the Subordinated Notes, then the Remarketing Provisions described above will be applicable to the Subordinated Notes. III. COMMON STOCK FORWARD UNDERWRITING AGREEMENT Issuer: CMS Underwriter: BAS Issue: CMS Common Stock, par value $.01 per share Equity Issue Size: $250 million (plus a 15% over-allotment option) 3 Underwriting: CMS will designate by written notice to BAS a time in CMS' discretion during the period beginning June 9, 1999 and ending June 9, 2001 for an underwriting of a number of shares of CMS Common Stock with an aggregate public offering price of $250 million (plus the over-allotment, if elected). If the underwriting has not occurred prior to April 9, 2001, BAS will be entitled to designate a targeted date for an underwriting of the shares. If an underwriting is completed for less than $250 million of shares, the underwriting commitment will continue with respect to the remainder of the amount. Registration Covenant: CMS has agreed to maintain an effective shelf registration statement with availability for the issuance of up to $250 million of shares of Common Stock (plus the over-allotment). -----END PRIVACY-ENHANCED MESSAGE-----