Exhibit 1.1
WISCONSIN ENERGY CORPORATION
DEBT SECURITIES
UNDERWRITING AGREEMENT
New York, New York
Dated the date set
forth in
Schedule B
hereto
To the Underwriters set forth
on
Schedule A
hereto
Ladies and Gentlemen:
Wisconsin Energy Corporation, a Wisconsin corporation (the “
Company
”), proposes to
issue and sell to one or more underwriters (the “
Underwriters
”) named in
Schedule A
to this underwriting agreement (this “
Agreement
”) the aggregate principal amount of one or
more new series of its debt securities (the “
Securities
”) with the terms set forth in
Schedule B
hereto. The Securities will be issued under an indenture, dated as of March 15,
1999 (the “
Indenture
”), between the Company and The Bank of New York Trust Company, N.A.
(as successor to The First National Bank of Chicago), as Trustee (the “
Trustee
”), in one or
more series, which series may vary as to interest rates, maturities, redemption provisions, selling
prices and other terms, with all such terms for any particular series of the Securities being
determined at the time of sale.
The Company understands that the Underwriters propose to make a public offering of the
Securities as soon as their representative or representatives identified on
Schedule A
hereto (the “
Representatives
”) deem advisable after this Agreement has been executed and
delivered.
SECTION 1.
REPRESENTATIONS AND WARRANTIES
.
(a)
Representations and Warranties by the Company
. The Company represents and
warrants to each Underwriter and agrees with each Underwriter, as follows:
(i)
Compliance with Registration Requirements
. The Company has filed with the
Securities and Exchange Commission (the “
Commission
”) an automatic shelf
registration statement on Form S-3 (having the number(s) set forth on
Schedule B
hereto), which became effective upon filing with the Commission (including information (if
any) deemed to be part of the registration statement at the time of effectiveness pursuant
to Rule 430A under the Securities Act of 1933, as amended (the “1933 Act”)), for the
registration under the 1933 Act of the Securities; and no stop order suspending its
effectiveness has been issued and no proceeding for that purpose or pursuant to Section 8A
of the 1933 Act against the Company or related to the offering has been initiated or, to the
best knowledge of the Company, threatened by the Commission. Such registration statement
meets the requirements set forth in Rule 415(a)(1)(x) under the 1933 Act and
complies in all other material respects with said Rule, and as amended at the date of
this Agreement, including the exhibits thereto, and the information deemed a part thereof
pursuant to Rule 430B(f)(1) under the 1933 Act on the date of such registration statement’s
effectiveness for purposes of Section 11 of the 1933 Act, as such section applies to the
Company and the Underwriters for the Securities pursuant to Rule 430B(f)(2) under the 1933
Act (the “
Effective Date
”), is hereinafter called the “
Registration
Statement
”. The form of prospectus included in such Registration Statement is
hereinafter called the “
Basic Prospectus
”, and the Basic Prospectus, as supplemented
by the preliminary prospectus supplement dated May 8, 2007 relating to the Securities, in
the form filed with the Commission pursuant to Rule 424(b) under the 1933 Act (the
“
Preliminary Prospectus Supplement
”), is hereinafter referred to as the
“
Preliminary Prospectus
”. The Basic Prospectus, as amended or supplemented in final
form, including by a prospectus supplement relating to the Securities in the form in which
it is filed with the Commission pursuant to Rule 424(b) under the 1933 Act (the
“
Prospectus Supplement
”), is hereinafter referred to as the “
Prospectus
”.
The Company will file with the Commission the Prospectus Supplement in accordance with Rule
424(b). As filed, the Prospectus Supplement, together with the Basic Prospectus, shall
contain all information required by the 1933 Act and the rules thereunder, and, except to
the extent the Representatives shall agree in writing to a modification, the Prospectus
Supplement shall be in all substantive respects in the form furnished to the Representatives
prior to the Execution Time (as defined below) or, to the extent not completed at the
Execution Time, shall contain only such specific additional information and other changes
(beyond that contained in the Basic Prospectus and any Preliminary Prospectus) as the
Company has advised the Representatives, prior to the Execution Time, will be included or
made therein. Any reference herein to the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed
under the Securities Exchange Act of 1934, as amended (the “
1934 Act
”), on or before
the date of this Agreement, or the issue date of the Basic Prospectus, any Preliminary
Prospectus or the Prospectus, as the case may be; and any reference herein to the terms
“amend,” “amendment” or “supplement” with respect to the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the filing of any document under the 1934 Act after the date of this Agreement, or
the issue date of the Basic Prospectus, any Preliminary Prospectus or the Prospectus, as the
case may be, deemed to be incorporated therein by reference.
“
Execution Time
” shall mean the date and time that this Agreement is executed
and delivered by the parties hereto.
(ii)
No Misstatements or Omissions
. (i) As of the Effective Date and as of the
applicable effective date of any subsequent amendment to the Registration Statement
(including the filing of any document incorporated by reference in the Registration
Statement) that becomes effective prior to the Closing Time (as defined in Section 2(b)),
the Registration Statement, as then amended as of any such time, and the Indenture, complied
or will comply, as the case may be, in all material respects with the applicable
requirements of the 1933 Act, the Trust Indenture Act of 1939, as amended (the “
1939
2
Act
”), and the 1934 Act and the respective rules thereunder, (ii) as of the
date hereof, and as of the date of any further supplement to the Prospectus, the Prospectus,
as then amended or supplemented as of any such time, will comply in all material respects
with the applicable requirements of the 1933 Act, the 1939 Act and the 1934 Act and the
respective rules thereunder, (iii) as of the Effective Date and as of the applicable
effective date of any subsequent amendment to the Registration Statement that becomes
effective prior to the Closing Time, the Registration Statement, as then amended as of such
time, did not or will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make the statements
therein not misleading, (iv) the Disclosure Package does not, and at the Execution Time and
at the Closing Time, will not contain any 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, not misleading and (v) as of the date hereof,
as of the date of any further supplement to the Prospectus and as of the Closing Time, the
Prospectus, as then amended or supplemented as of such time, did not or will not contain any
untrue statement of material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading;
provided
, however, that the Company makes no representations or
warranties as to (i) that part of the Registration Statement which shall constitute the
Statement of Eligibility on Form T-1 under the 1939 Act of the Trustee (the “
Form
T-1
”) or (ii) the information contained in or omitted from the Registration Statement or
the Prospectus or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for use in the Registration Statement
and the Prospectus.
“
Disclosure Package
” shall mean (i) the Basic Prospectus, (ii) the Preliminary
Prospectus used most recently prior to the Execution Time, (iii) the Issuer Free Writing
Prospectuses, if any, identified in
Schedule C
hereto, including the final term
sheet as attached hereto as
Schedule B
, and (iv) any other Free Writing Prospectus
that the parties hereto shall hereafter expressly agree in writing to treat as part of the
Disclosure Package.
“
Free Writing Prospectus
” shall mean a free writing prospectus, as defined in
Rule 405.
“
Issuer Free Writing Prospectus
” shall mean an issuer free writing prospectus,
as defined in Rule 433.
(iii)
Free Writing Prospectuses
. At the determination date for purposes of the
Securities within the meaning of Rule 164(h) under the 1933 Act, the Company was not an
“ineligible issuer” as defined in Rule 405 under the 1933 Act. Any Free Writing Prospectus
that the Company is required to file pursuant to Rule 433(d) under the 1933 Act has been, or
will be, filed with the Commission in accordance with the requirements of the 1933 Act and
the applicable rules and regulations of the Commission thereunder. Each Free Writing
Prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under
the 1933 Act or that was prepared by or on behalf of or used or referred to by the Company
complies or will comply in all material respects with the
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requirements of the 1933 Act and the applicable rules and regulations of the Commission
thereunder and does not and will not include anything that conflicts with the information
contained or incorporated by reference in the Registration Statement, the Preliminary
Prospectus or the Prospectus. Except for the Free Writing Prospectuses, if any, identified
in
Schedule C
hereto, the Company has not prepared, used or referred to, and will
not, without the Representatives’ prior consent, prepare, use or refer to, any Free Writing
Prospectus.
(iv)
Automatic Shelf Registration Statement
. With respect to the Registration
Statement, (i) the Registration Statement is an “automatic shelf registration statement” (as
defined in Rule 405 under the 1933 Act), (ii) the Company has not received from the
Commission any notice pursuant to Rule 401(g)(2) of the 1933 Act objecting to the use of the
automatic shelf registration statement and (iii) the conditions for use of Form S-3, as set
forth in the General Instructions thereof, have been satisfied.
(v)
Well-Known Seasoned Issuer
. (A) At the time of filing of the Registration
Statement, (B) at the time of the most recent amendment to the Registration Statement for
purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the
1934 Act or form of prospectus) and (C) at the time the Company or any person acting on its
behalf (within the meaning, for this clause only, of Rule 163(c) under the 1933 Act) made
any offer relating to the Securities in reliance on the exemption of Rule 163 under the 1933
Act, the Company was a “well-known seasoned issuer” (as defined in Rule 405 under the 1933
Act).
(vi)
Authorization of Agreement
. This Agreement has been duly authorized,
executed and delivered by the Company.
(vii)
Authorization of the Indenture
. The Indenture has been duly authorized
by the Company and duly qualified under the 1939 Act and constitutes a valid and binding
agreement of the Company, enforceable against the Company in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization, moratorium
or similar laws affecting enforcement of creditors’ rights generally, general principles of
equity (regardless of whether enforcement is considered in a proceeding in equity or at law)
or an implied covenant of good faith and fair dealing.
(viii)
Authorization of the Securities
. The Securities have been duly
authorized and, at the Closing Time, will have been duly executed by the Company and, when
authenticated, issued and delivered in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors’ rights
generally, general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law) or an implied covenant of
4
good faith and fair dealing, and will be in the form contemplated by, and entitled to
the benefits of, the Indenture.
(ix)
Description of the Securities and the Indenture
. The Securities and the
Indenture will conform in all material respects to the respective statements relating
thereto contained in the Disclosure Package and the Prospectus and will be in substantially
the respective forms filed or incorporated by reference, as the case may be, as exhibits to
the Registration Statement.
(x)
Absence of Defaults and Conflicts
. Neither the Company nor any
“significant subsidiary” of the Company (as such term is defined in Rule 1-02 of Regulation
S-X) (each, a “Subsidiary” and collectively, the “Subsidiaries” and each of which is listed
on Schedule D hereto) is in violation of its charter or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its Subsidiaries is a party or
by which it or any of them may be bound or to which any of the property or assets of the
Company or any Subsidiary is subject (collectively, “
Agreements and Instruments
”)
except for such defaults as would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or business prospects of the
Company and its consolidated subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business (a “
Material Adverse Effect
”); and the
execution, delivery and performance of this Agreement and the consummation of the
transactions contemplated herein and in the Registration Statement (including the issuance
and sale of the Securities and the use of the proceeds from the sale of the Securities as
described in the Disclosure Package and the Prospectus under the caption “Use of Proceeds”)
and compliance by the Company with its obligations hereunder have been duly authorized by
all necessary corporate action and do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary
pursuant to, the Agreements and Instruments (except for such conflicts, breaches, Repayment
Events or defaults or liens, charges or encumbrances that would not result in a Material
Adverse Effect), nor will such action result in any violation of the provisions of the
charter or by-laws of the Company or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its assets, properties
or operations. As used herein, a “
Repayment Event
” means any event or condition
which gives the holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder’s behalf) the right to require the repurchase, redemption or
repayment (through acceleration or otherwise), in each case prior to its stated maturity, of
all or a portion of such indebtedness by the Company or any Subsidiary.
(xi)
Absence of Further Requirements
. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the performance by the
5
Company of its obligations hereunder, in connection with the offering, issuance or sale
of the Securities hereunder or the consummation of the transactions contemplated by this
Agreement, except such as have been already obtained or as may be required under the 1933
Act or the rules and regulations of the Commission thereunder (the “
1933 Act
Regulations
”) or state securities laws.
(xii)
Investment Company Act
. The Company is not, and upon the issuance and
sale of the Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Disclosure Package and the Prospectus will not be, an
“investment company” or an entity “controlled” by an “investment company” as such terms are
defined in the Investment Company Act of 1940, as amended (the “
1940 Act
”).
(xiii)
Independent Public Accountants
. The registered public accounting firm
that certified the audited financial statements of the Company included in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2006, which are incorporated by
reference in the Registration Statement, Disclosure Package and Prospectus, is an
independent registered public accounting firm as required by the 1933 Act and the 1933 Act
Regulations.
(b)
Officer’s Certificates
. Any certificate signed by any officer of the Company
delivered to the Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters covered thereby.
SECTION 2.
SALE AND DELIVERY TO UNDERWRITERS; CLOSING
.
(a)
Securities
. On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, at a price equal to 98.734% of the principal amount thereof, the
aggregate principal amount of Securities set forth in
Schedule A
opposite the name of such
Underwriter, plus any additional amount of Securities which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 10 hereof.
(b)
Payment
. Payment of the purchase price for, and delivery of certificates
representing, the Securities shall be made at the offices of Troutman Sanders LLP, 600 Peachtree
Street, NE, Suite 5200, Atlanta, Georgia 30308, or at such other place as shall be agreed upon by
the Representatives and the Company at 9:00 A.M. (Eastern Time) (unless postponed in accordance
with the provisions of Section 10), or such other time not later than ten business days after such
date as shall be agreed upon by the Representatives and the Company (such time and date of payment
and delivery being herein called “
Closing Time
”).
Payment shall be made to the Company by wire transfer of immediately available or next day
funds as set forth in
Schedule A
to a bank account(s) designated by the Company against
delivery (to or for the account of the Representatives for the respective accounts of the
Underwriters) of certificates representing the Securities to be purchased by them. It is
understood that each Underwriter has authorized the Representatives, for its account, to accept
6
delivery of, receipt for, and make payment of the purchase price for, the Securities which it
has agreed to purchase.
(c)
Denominations; Registration
. Certificates representing the Securities shall be in
such principal amounts and registered in such names as the Representatives may request in writing
at least one full business day before the Closing Time. The certificates representing the
Securities will be made available for examination by the Representatives not later than 10:00 A.M.
(Eastern Time) on the business day prior to the Closing Time.
(d)
Free Writing Prospectuses
. Each Underwriter, severally and not jointly, agrees
that, except for the information contained in the Free Writing Prospectuses identified in
Schedule C
hereto, including the final term sheet attached hereto as
Schedule B
, or
any free writing prospectus that is not required to be filed by the Company pursuant to Rule 433
under the 1933 Act, such Underwriter has not prepared, used or referred to, and will not, without
the Company’s prior consent, prepare, use or refer to, any Free Writing Prospectus.
SECTION 3.
COVENANTS OF THE COMPANY
. The Company covenants with each Underwriter as
follows:
(a)
Compliance with Securities Regulations and Commission Requests
. The Company,
subject to Section 3(c), will prepare the Prospectus in a form approved by the Representatives and
file such Prospectus pursuant to Rule 424(b) within the time prescribed under Rule 424(b) (or Rule
430A, as the case may be) and will notify the Representatives immediately, and confirm the notice
in writing, (i) when any post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended Prospectus shall have been filed,
(ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any notice objecting to its use that has been
received by the Company or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or
pursuant to Section 8A of the 1933 Act against the Company or related to the offering. The Company
will promptly effect the filings necessary pursuant to Rule 424(b) (or Rule 430A, as the case may
be) and will take such steps as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) (or Rule 430A, as the case may be) was received
for filing by the Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued or any notice objecting to the use of the Registration
Statement is issued, to obtain the lifting thereof at the earliest possible moment. The Company
will prepare a final term sheet, substantially in the form of Schedule B hereto and approved by the
Representatives, and will file such pricing term sheet pursuant to Rule 433(d) under the 1933 Act
within the time period prescribed by such Rule.
(b)
Disclosure Package
. If, at any time prior to the filing of the Prospectus
pursuant to Rule 424(b), any event occurs as a result of which the Disclosure Package would
7
include any untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under which they were made or the
circumstances then prevailing not misleading, the Company will (i) notify promptly the
Representatives so that any use of the Disclosure Package may cease until it is amended or
supplemented; (ii) amend or supplement the Disclosure Package to correct such statement or
omission; and (iii) supply any amendment or supplement to you in such quantities as the
Representatives may reasonably request.
(c)
Filing of Amendments
. At any time when a prospectus is required to be delivered
in connection with sales of Securities under the 1933 Act (including in circumstances where such
requirement may be satisfied pursuant to Rule 172), the Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration Statement or any
amendment, supplement or revision to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise, will furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and will not file or use
any such document to which the Representatives or counsel for the Underwriters shall reasonably
object.
(d)
Delivery of Registration Statements
. The Company has furnished or will deliver to
the Representatives and counsel for the Underwriters, without charge, two reproduced copies of an
original signed copy of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference therein) and one reproduced copy of an
original signed copy of all consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration Statement as originally filed
and of each amendment thereto (without exhibits) for each of the Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the Representatives will be
identical to the electronically transmitted copies thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System (“
EDGAR
”) except to the extent
permitted by Regulation S-T under the 1933 Act.
(e)
Delivery of Prospectuses
. The Company has delivered to each Underwriter, without
charge, as many copies of any Preliminary Prospectus relating to the Securities as such Underwriter
reasonably requested, and the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each Underwriter, without charge, during
the period when the Prospectus is required to be delivered under the 1933 Act (including in
circumstances where such requirement may be satisfied pursuant to Rule 172), such number of copies
of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T under the 1933 Act.
(f)
Continued Compliance with Securities Laws
. The Company will comply with the 1933
Act and the 1933 Act Regulations and the 1934 Act and the rules and regulations of the Commission
thereunder (the “
1934 Act Regulations
”) so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement and in the Prospectus. If at
8
any time when a prospectus is required by the 1933 Act to be delivered in connection with
sales of the Securities (including in circumstances where such requirement may be satisfied
pursuant to Rule 172), any event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the Prospectus will not
include any untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel,
at any such time to amend the Registration Statement or amend or supplement the Prospectus in order
to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 3(c), such amendment or
supplement as may be necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the Underwriters may
reasonably request.
(g)
Rule 158
. The Company will timely file such reports pursuant to the 1934 Act as
are necessary in order to make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h)
Use of Proceeds
. The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Disclosure Package and the Prospectus under
“Use of Proceeds”.
(i)
Restriction on Sale of Securities
. Until the business day following the Closing
Time, the Company will not, without the prior written consent of the Representatives, sell or
contract to sell or announce the offering of, any debt securities of the Company with
characteristics and terms similar to those of the Securities.
(j)
Automatic Shelf Registration Statement
. If at any time when Securities remain
unsold by the Underwriters after the Closing Time, the Company receives from the Commission a
notice pursuant to Rule 401(g)(2) of the 1933 Act or otherwise ceases to be eligible to use the
automatic shelf registration statement form, the Company will (i) promptly notify the
Representatives, (ii) promptly file a new registration statement or post-effective amendment on the
proper form relating to the Securities, in a form reasonably satisfactory to the Representatives,
(iii) use its reasonable best efforts to cause such registration statement or post-effective
amendment to be declared effective and (iv) promptly notify the Representatives of such
effectiveness. The Company will take such other reasonable action necessary or appropriate to
permit the public offerings and sale of the Securities to continue as contemplated in the
registration statement that was the subject of the Rule 401(g)(2) notice or for which the Company
has otherwise become ineligible. References herein to the Registration Statement shall include
such new registration statement or post-effective amendment, as the case may be.
(k)
Reporting Requirements
. The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act, will file all documents required to be
9
filed with the Commission pursuant to the 1934 Act within the time periods required by the
1934 Act and the 1934 Act Regulations.
SECTION 4.
PAYMENT OF EXPENSES
.
(a)
Expenses
. The Company will pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and exhibits and the Form T-1)
as originally filed and of each amendment thereto, (ii) the preparation, printing, reproduction and
delivery to the Underwriters of this Agreement, any Agreement among Underwriters, the Indenture and
such other documents as may be required in connection with the offering, purchase, sale, issuance
or delivery of the Securities, (iii) the preparation, issuance and delivery of the certificates
representing the Securities to the Underwriters, including any transfer taxes and any stamp or
other duties payable upon the sale, issuance or delivery of the Securities to the Underwriters,
(iv) the fees and disbursements of the Company’s counsel, other advisors and registered public
accountants, (v) the printing and delivery to the Underwriters of copies of each Preliminary
Prospectus, each Issuer Free Writing Prospectus and of the Prospectus and any amendments or
supplements thereto, (vi) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee in connection with the Indenture and the Securities, (vii)
any fees payable in connection with the rating of the Securities and (viii) the fees and expenses
incurred in connection with the listing, if applicable, of the Securities on any such exchange or
exchanges as are listed on
Schedule B
hereto.
(b)
Termination of Agreement
. If this Agreement is terminated by the Representatives
in accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees
and disbursements of counsel for the Underwriters.
SECTION 5.
CONDITIONS OF UNDERWRITERS’ OBLIGATIONS
. The obligations of the several
Underwriters hereunder are subject to the accuracy of the representations and warranties of the
Company contained in Section 1(a) hereof or in certificates of any officer of the Company delivered
pursuant to the provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:
(a)
Effectiveness of Registration Statement
. The Prospectus shall have been filed
with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the 1933 Act Regulations and in accordance with Section 3(a) hereof; no stop order
suspending the effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose or pursuant to Section 8A of the 1933 Act against the
Company or related to the offering shall have been initiated or threatened by the Commission; and
no notice pursuant to Rule 401(g)(2) of the 1933 Act objecting to the use of the automatic shelf
registration statement shall have been received by the Company from the Commission. The pricing
term sheet contemplated by Section 3(a) hereto, and any other material required to be filed by the
Company pursuant to Rule 433(d) under the 1933 Act, shall have been filed by the Company with the
Commission within the applicable time period prescribed for such filing by Rule 433 under the 1933
Act.
10
(b)
Opinion of Counsel for Company
. At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of (i) Troutman Sanders LLP, counsel for
the Company, to the effect set forth in
Exhibit A-1
hereto and (ii) Sally R. Bentley, Esq.,
or Joshua M. Erickson, Esq., counsel for the Company, to the effect set forth in
Exhibit
A-2
hereto, each in form and substance satisfactory to the Representatives and to counsel for
the Underwriters, together with signed or reproduced copies of such letter for each of the other
Underwriters and addressed to the Underwriters and to such further effect as the Representatives
and counsel to the Underwriters may reasonably request. In giving such opinion, Troutman Sanders
LLP may rely, as to all matters governed by the laws of jurisdictions other than the law of the
State of New York and the federal law of the United States, upon the opinions of counsel
satisfactory to the Representatives. In giving such opinion, Sally R. Bentley or Joshua M.
Erickson may rely, as to all matters governed by the laws of jurisdictions other than the law of
the State of Wisconsin and the federal law of the United States, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon certificates of
officers of the Company, the Trustee and public officials.
(c)
Opinion of Counsel for Underwriters
. At Closing Time, the Representatives shall
have received the favorable opinion, dated as of Closing Time, of Dewey Ballantine LLP, the counsel
for the Underwriters, together with signed or reproduced copies of such letter for each of the
other Underwriters and addressed to the Underwriters with respect to such matters as the
Representatives may reasonably request. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the State of New York and the
federal law of the United States, upon the opinions of counsel for the Company, including such
counsel referred to above in Sections 5(b) hereof, or other counsel satisfactory to the
Representatives. Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of officers of the
Company, and certificates of the Trustee and public officials.
In addition, such counsel shall state that they have participated in conferences with officers
and other representatives of the Company, representatives of the Underwriters and representatives
of the independent public accountants for the Company at which conferences the contents of the
Prospectus, the Registration Statement and the Disclosure Package and related matters were
discussed, and that given the limitations inherent in the role of outside counsel and the character
of determinations involved in the preparation of such documents, such counsel are not passing upon
and do not assume any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Disclosure Package or the Prospectus and have made no
independent check or verification thereof (except as otherwise indicated in such letter). Such
counsel shall further state that, on the basis of the foregoing, no facts have come to their
attention that lead them to believe that the Registration Statement, as of the date of the
Underwriting Agreement, or any subsequent amendment thereto, at the time such amendment became
effective, 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, that the
Prospectus, as of its date or as of the Closing Time, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading or
the Disclosure Package, taken together as a whole, as of the Execution Time,
11
contained 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, not misleading (it being understood that such counsel express no comment with respect to the
Form T-1 or the financial statements, including the notes thereto, or any other financial or
statistical data set forth or referred to in the Registration Statement, the Prospectus or the
Disclosure Package).
(d)
Officers’ Certificate
. At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the Prospectus or the
Disclosure Package, any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its consolidated subsidiaries,
considered as one enterprise, whether or not arising in the ordinary course of business, from that
set forth in the Prospectus and the Disclosure Package (a “
Material Adverse Change
”), and
the Representatives shall have received a certificate of the President or a Vice President of the
Company and of the chief financial officer, chief accounting officer or treasurer of the Company,
dated as of Closing Time, to the effect that (i) there has been no such Material Adverse Change,
(ii) the representations and warranties in Section 1(a) hereof are true and correct in all material
respects, with the same force and effect as though expressly made at and as of Closing Time, (iii)
the Company has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings for that purpose or
pursuant to Section 8A of the 1933 Act against the Company or related to the offering have been
instituted or are pending or are, to the knowledge of such officers, contemplated by the
Commission.
(e)
Accountant’s Comfort Letter
. At the Execution Time, the Representatives shall
have received letter(s) dated such date from the Company’s independent public accountants for the
periods covered by their respective reports included or incorporated by reference in the
Registration Statement, the Preliminary Prospectus and the Prospectus (and the applicable interim
periods), in form and substance satisfactory to the Representatives and to counsel for the
Underwriters together with signed or reproduced copies of such letters for each of the other
Underwriters and addressed to the Underwriters containing statements and information of the type
ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial
statements and certain financial information contained in the Registration Statement, the
Preliminary Prospectus and the Prospectus.
(f)
Bring-down Comfort Letter
. At Closing Time, the Representatives shall have
received from the Company’s independent public accountants referred to in subsection (e) of this
Section, letters dated as of the Closing Time, together with signed or reproduced copies of such
letters for each of the other Underwriters and addressed to the Underwriters, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a date not more than three business
days prior to Closing Time.
(g)
Maintenance of Rating
. At Closing Time, the Securities shall be rated by each of
Moody’s Investors Service Inc. and Standard & Poor’s Ratings Services, a division of McGraw-Hill,
Inc., as set forth in
Schedule B
hereto. Since the Execution Time, there (i) shall
12
not have occurred a downgrading in the rating assigned to the Securities or any of the
Company’s other debt securities by any “nationally recognized statistical rating agency,” as that
term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act, and (ii) no
such organization shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of the Securities or any of the Company’s other debt
securities.
(h)
Additional Documents
. At Closing Time, counsel for the Underwriters shall have
been furnished with such documents and opinions as they reasonably may require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the Company in connection
with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form
and substance to the Representatives and counsel for the Underwriters.
(i)
Termination of Agreement
. If any condition specified in this Section shall not
have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the
Representatives by notice to the Company at any time at or prior to Closing Time and such
termination shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 6 and 7 shall survive any such termination and remain in full
force and effect.
SECTION 6.
INDEMNIFICATION
.
(a)
Indemnification of Underwriters
. The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact included in any Preliminary Prospectus, the Disclosure
Package, the Prospectus or any Issuer Free Writing Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission; provided that
(subject to Section 6(d) below) any such settlement is effected with the written consent of
the Company; and
13
(iii) against any and all expense whatsoever, as incurred (including the reasonable
fees and disbursements of counsel chosen by the Representatives), reasonably incurred in
investigating, preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided
, however, that this indemnity agreement shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or any Preliminary Prospectus, the Prospectus or
any Issuer Free Writing Prospectus (or any amendment or supplement thereto; and
provided
,
further, that the indemnity agreement in this paragraph (a) with respect to the Preliminary
Prospectus and other information included in the Disclosure Package shall not inure to the benefit
of any Underwriter from whom the person asserting any such losses, claims, damages or other
liabilities purchased Securities, or any person controlling such Underwriter, to the extent that
(i) prior to the Execution Time the Company shall have notified such Underwriter that the
Preliminary Prospectus or other information included in the Disclosure Package contains an untrue
statement of material fact or omits to state therein a material fact required to be stated therein
in order to make the statements therein not misleading, (ii) such untrue statement or omission of a
material fact was corrected in an amended or supplemented Preliminary Prospectus or, where
permitted by law, an Issuer Free Writing Prospectus and such corrected Preliminary Prospectus or
Issuer Free Writing Prospectus was provided to such Underwriter and filed with the Commission far
enough in advance of the Execution Time so that such corrected Preliminary Prospectus or Issuer
Free Writing Prospectus could have been conveyed to such person prior to the Execution Time, (iii)
such corrected Preliminary Prospectus or Issuer Free Writing Prospectus (excluding any document
then incorporated or deemed incorporated therein by reference) was not conveyed to such person at
or prior to the Execution Time, and (iv) such loss, claim, damage or liability would not have
occurred had the corrected Preliminary Prospectus or Issuer Free Writing Prospectus (excluding any
document then incorporated or deemed incorporated therein by reference) been conveyed to such
person prior to the Execution Time. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b)
Indemnification of Company, Directors and Officers
. Each Underwriter severally
and not jointly agrees to indemnify and hold harmless the Company, its directors, each of its
officers who signed the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement, or any amendment thereto, or
any Preliminary Prospectus, the Disclosure Package, the Prospectus or any Issuer Free Writing
Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the Representatives expressly for
use in the Registration Statement (or any amendment
14
thereto) or such Preliminary Prospectus, the Disclosure Package, the Prospectus or any Issuer
Free Writing Prospectus (or any amendment or supplement thereto).
(c)
Actions Against Parties; Notification
. Promptly after receipt by an indemnified
party under this Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party under this Section
6, notify the indemnifying party in writing within a reasonable period of time of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this Section 6. In case
any such action is brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the defense thereof, with
counsel satisfactory to such indemnified party;
provided
, however, that if the defendants
(including impleaded parties) in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded that there may be
legal defenses available to it which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to select separate
counsel to assert such legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such indemnified party
under this Section 6 for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the indemnifying party shall not
be liable for the expenses of more than one separate counsel (in addition to local counsel)
representing the indemnified parties), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the indemnifying party.
(d)
Settlement Without Consent if Failure to Reimburse
. If at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of
the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.
SECTION 7.
CONTRIBUTION
. If the indemnification provided for in Section 6 hereof is
for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses, liabilities, claims,
15
damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Underwriters on the
other hand in connection with the offering of the Securities pursuant to this Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by the Company and the
total underwriting discount received by the Underwriters, in each case as set forth on the cover of
the Prospectus, bear to the aggregate initial public offering price of the Securities as set forth
on such cover.
The relative fault of the Company on the one hand and the Underwriters on the other hand shall
be determined by reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by an Underwriter in writing through the Representatives and
the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7. The aggregate amount
of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred
to above in this Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 7, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the
16
same rights to contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters’ respective obligations to
contribute pursuant to this Section 7 are several in proportion to the principal amount of
Securities set forth opposite their respective names in
Schedule A
hereto and not joint.
SECTION 8.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY
. All
representations, warranties and agreements contained in this Agreement or in certificates of
officers of the Company submitted pursuant hereto shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the Securities to the
Underwriters.
SECTION 9.
TERMINATION OF AGREEMENT
.
(a)
Termination; General
. The Representatives may terminate this Agreement, by notice
to the Company, at any time at or prior to Closing Time (i) if there has been any Material Adverse
Change, or (ii) if there has occurred any material adverse change in the financial markets in the
United States or the international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis (including any terrorist activity), the effect of which is such
as to make it, in the judgment of the Representatives, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New York Stock Exchange,
or if trading generally on the American Stock Exchange or the New York Stock Exchange or in the
Nasdaq National Market has been suspended or materially limited (other than to provide for an
orderly market), or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal or New York
authorities or a material disruption in commercial banking or securities settlement or clearance
services shall have occurred.
(b)
Liabilities
. If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as provided in
Section 4 hereof, and; provided further that Sections 6 and 7 shall survive such termination and
remain in full force and effect.
SECTION 10.
DEFAULT BY ONE OR MORE OF THE UNDERWRITERS
. If one or more of the
Underwriters shall fail at Closing Time to purchase the Securities which it or they are obligated
to purchase under this Agreement (the “
Defaulted Securities
”), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters reasonably acceptable to the Company, to
purchase all, but not less than all, of the Defaulted Securities in such principal amounts as may
be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
17
(a) if the aggregate principal amount of the Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportion that its respective underwriting obligation hereunder bears to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of the Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities to be purchased on such date, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting Underwriter from
liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement
either (i) the Representatives or (ii) the Company shall have the right to postpone Closing Time
for a period not exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As used in this Agreement, the
term “Underwriter” includes any person substituted for an Underwriter under this Section 10.
SECTION 11.
NOTICES
. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be directed to the Representatives at
Citigroup Global Markets Inc., 388 Greenwich Street, New York, New York 10013, Attention: General
Counsel and J.P. Morgan Securities Inc., 270 Park Avenue, New York, New York 10017, Attention: High
Grade Syndicate; notices to the Company shall be directed to it at 231 West Michigan Street, P.O.
Box 1331, Milwaukee, Wisconsin 53201, attention of Treasurer.
SECTION 12.
PARTIES
. This Agreement shall inure to the benefit of and be binding upon
the Underwriters, the Company and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives,
any legal or equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions hereof are intended to
be for the sole and exclusive benefit of the Underwriters, the Company and their respective
successors, and said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13.
GOVERNING LAW AND TIME
. This agreement shall be governed by and construed
in accordance with the laws of the State of New York. Except as otherwise set forth herein,
specified times of day refer to New York City time.
18
SECTION 14.
EFFECT OF HEADINGS
. The Section headings herein are for convenience only
and shall not affect the construction hereof.
SECTION 15.
COUNTERPARTS
. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
SECTION 16.
NATURE OF UNDERWRITERS’ OBLIGATIONS
. The Company acknowledges that in
connection with the offering of the Securities: (a) the Underwriters have acted at arms length, are
not agents of, and owe no fiduciary duties to, the Company or any other person, (b) the
Underwriters owe the Company only those duties and obligations set forth in this Agreement and (c)
the Underwriters may have interests that differ from those of the Company. The Company waives to
the full extent permitted by applicable law any claims it may have against the Underwriters arising
from an alleged breach of fiduciary duty in connection with the offering of the Securities.
19
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement between the Company and the Underwriters.
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Very truly yours,
WISCONSIN ENERGY CORPORATION
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By:
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/s/ Jeffrey West
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Name:
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Jeffrey West
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Title:
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Vice President and Treasurer
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The foregoing Agreement is hereby
confirmed and accepted as of the date
specified in
Schedule B.
CITIGROUP GLOBAL MARKETS INC.
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By:
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/s/ Brian Bednarski
Name: Brian Bednarski
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Title: Director
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J.P. MORGAN SECURITIES INC.
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By: /
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s/ Jose C. Padilla
Name: Jose C. Padilla
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Title: Vice President
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For themselves and the other
Underwriters named in
Schedule A
to the foregoing Agreement.
20
SCHEDULE A
WISCONSIN ENERGY CORPORATION
Debt Securities
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Aggregate Principal Amount of 2007 Series A
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Underwriter
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Junior Subordinated Notes due 2067
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Citigroup Global Markets Inc.
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$
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187,500,000
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J.P. Morgan Securities Inc.
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187,500,000
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Banc of America Securities LLC
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62,500,000
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Deutsche Bank Securities Inc.
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62,500,000
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Total
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$
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500,000,000
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Representatives:
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Citigroup Global Markets Inc.
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J.P. Morgan Securities Inc.
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Proceeds to issuer (before offering expenses): $493,670,000
Pricing Term Sheet
Filed Pursuant to Rule 433(d)
Registration No. 333-142664
May 8, 2007
SCHEDULE B
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Issuer:
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Wisconsin Energy Corporation
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Security:
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2007 Series A Junior Subordinated Notes due 2067
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Principal Amount:
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$500,000,000
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Maturity:
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May 15, 2067
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Interest Rate During Fixed Rate Period:
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From Settlement Date to May 15, 2017, at the annual rate of 6.25%, payable
semi-annually in arrears on May 15 and November 15 of each year, beginning November
15, 2007.
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Interest Rate During Floating Rate Period:
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From May 15, 2017 to maturity at a floating rate based on the Three-Month LIBOR Rate
plus 211.25 basis points, reset quarterly, payable quarterly in arrears on February
15, May 15, August 15 and November 15 of each year, beginning August 15, 2017.
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Optional Deferral:
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Maximum of 10 consecutive years per deferral.
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Initial Price to Public:
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99.734%
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Benchmark Treasury:
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UST 4.625% due February 15, 2017
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Benchmark Yield:
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4.636%
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Spread to Benchmark Treasury:
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+165 basis points
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Reoffer Yield:
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6.286%
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Make-Whole Call:
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Redeemable in whole or in part at the option of the Issuer at any time at the
following applicable redemption price:
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• before May 15, 2017, the greater of (i)
100% of the principal amount of the Notes
being redeemed or (ii) the sum of the
present value of each scheduled payment of
principal and interest on the Notes from the
redemption date to May 15, 2017, discounted
to the redemption date on a semi-annual
basis (assuming a 360-day year consisting of
twelve 30-day months) at a discount rate equal
to the Treasury Rate plus 25 basis points, in
each case plus accrued and unpaid interest to
the redemption date; or
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• on or after May 15, 2017, 100% of the
principal amount of the Notes, plus any
accrued and unpaid interest to the
redemption date.
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Tax Event Call:
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Before May 15, 2017, redeemable in
whole, but not in part, at any time
within 90 days after the occurrence
and continuation of a Tax Event, at
the greater of (i) 100% of the
principal amount of the Notes being
redeemed or (ii) the sum of the
present value of each scheduled
payment of principal and interest on
the Notes from the redemption date
to May 15, 2017, discounted to the
redemption date on a semi-annual
basis (assuming a 360-day year
consisting of twelve 30-day months)
at a discount rate equal to the
Treasury Rate plus 50 basis points,
in each case plus accrued and unpaid
interest to the redemption date.
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Rating Agency Event Call:
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Before May 15, 2017, redeemable in
whole or in part, at any time
following the occurrence and
continuation of a Rating Agency
Event, at the greater of (i) 100% of
the principal amount of the Notes
being redeemed or (ii) the sum of
the present value of each scheduled
payment of principal and interest on
the Notes from the redemption date
to May 15, 2017, discounted to the
redemption date on a semi-annual
basis (assuming a 360-day year
consisting of twelve 30-day months)
at a discount rate equal to the
Treasury Rate plus 50 basis points,
in each case plus accrued and unpaid
interest to the redemption date.
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Replacement Capital Covenant:
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A Replacement Capital Covenant will
apply until May 15, 2037.
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Trade Date:
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May 8, 2007
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Expected Settlement Date:
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May 11, 2007 (T+3)
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Ratings* (Moody’s/S&P/Fitch):
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Baa1/BBB-/BBB+
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CUSIP:
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976657AH9
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Joint Book-Running Managers and Joint
Structuring Advisors:
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J.P. Morgan Securities Inc.
Citigroup Global Markets Inc.
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Co-Managers:
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Banc of America Securities LLC
Deutsche Bank Securities Inc.
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*
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Note: A securities rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any time.
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The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
EDGAR on the SEC web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer
participating in the offering will arrange to send you the prospectus if you request it by calling
Citigroup Global Markets Inc. toll-free at 1-877-858-5407 or J.P. Morgan Securities Inc. collect at
1-212-834-4533.
SCHEDULE C
ISSUER FREE WRITING PROSPECTUSES
1. Pricing Term Sheet dated as of May 8, 2007 and attached hereto as Schedule B.
SCHEDULE D
WISCONSIN ENERGY CORPORATION
List of Significant Subsidiaries
Wisconsin Electric Power Company
Wisconsin Gas LLC
W.E. Power, LLC
Exhibit A-1
FORM OF OPINION OF COMPANY’S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
Capitalized terms used herein shall have the same definitions as set forth in the underwriting
agreement (the “
Underwriting Agreement
”) to which this Exhibit A-1 is attached.
(i) The Securities and the Indenture conform as to legal matters in all material respects to
the descriptions thereof contained in the Disclosure Package and the Prospectus.
(ii) The Registration Statement became effective under the 1933 Act upon filing with the
Commission; any required filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of our knowledge, (a)
no stop order suspending the effectiveness of the Registration Statement has been issued under the
1933 Act and (b) no proceedings for that purpose or pursuant to Section 8A of the 1933 Act against
the Company or related to the offering have been instituted or are pending or threatened by the
Commission.
(iii) The Registration Statement, as of the date of the Underwriting Agreement, any subsequent
amendment thereto, as of its effective date, and the Prospectus, as of its issue date, appeared on
their face to comply as to form in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations, and the Exchange Act Documents incorporated by reference in the
Prospectus, as of their respective dates of filing with the Commission, appeared on their face to
comply as to form in all material respects with the requirements of the 1933 Act or the 1934 Act,
as applicable, and the rules and regulations of the Commission thereunder, except that in each
case, we express no opinion as to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the Prospectus or the
documents incorporated by reference in the Registration Statement or the Prospectus and we express
no opinion as to the Form T-1.
(iv) To the best of our knowledge, no filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any federal court or federal governmental
authority or agency (other than under the 1933 Act and the 1933 Act Regulations and the 1939 Act,
which have been obtained or made) is necessary or required in connection with the due
authorization, execution and delivery of the Underwriting Agreement or for the offering, issuance,
sale or delivery of the Securities.
(v) The Company is not an “investment company” or an entity “controlled” by an “investment
company,” as such terms are defined in the 1940 Act.
(vi) The statements in the Disclosure Package and the Prospectus under the caption “Material
United States Federal Income Tax Considerations”, to the extent they constitute matters of United
States federal income tax law or legal conclusions with respect thereto, are correct in all
material respects.
We have participated in conferences with officers and other representatives of the Company,
representatives of and counsel to the Underwriters and representatives of the independent public
accountants for the Company at which conferences the contents of the Prospectus, the Registration
Statement and the Disclosure Package and related matters were discussed. Given the limitations
inherent in the role of outside counsel and the character of determinations involved in the
preparation of such documents, we are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the Registration Statement,
Disclosure Package or the Prospectus and have made no independent check or verification thereof
(except as indicated in paragraphs (i) and (vi) above). On the basis of the foregoing, no facts
have come to our attention that lead us to believe that the Registration Statement, as of the date
of the Underwriting Agreement, or any subsequent amendment thereto, at the time such amendment
became effective, 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, that
the Prospectus contained, as of its date, or contains, as of the date hereof, an untrue statement
of a material fact or omitted, as of its date, or omits, as of the date hereof, to state a material
fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or that the Disclosure Package, taken together as a whole, as
of the Execution Time, contained 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, not misleading (it being understood that we have not been asked to
comment and express no opinion or belief with respect to the Form T-1 or the financial statements,
including the notes thereto, or any other financial or statistical set forth or referred to in the
Registration Statement, the Prospectus or the Disclosure Package).
In rendering such opinion, such counsel may rely as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible officers of the
Company, representatives of the Trustee and public officials. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the law of the State
of New York and the federal law of the United States, upon the opinions of counsel satisfactory to
the Representatives. Such opinion shall not state that it is to be governed or qualified by, or
that it is otherwise subject to, any treatise, written policy or other document relating to legal
opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business
Law (1991).
For purposes of such opinion, “Exchange Act Documents” shall mean the Company’s Annual Report
on Form 10-K for the year ended December 31, 2006, the Company’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2007, and the Company’s Current Report on Form 8-K filed with the
Commission on March 8, 2007.
Exhibit A-2
FORM OF OPINION OF COMPANY’S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
Capitalized terms used herein shall have the same definitions as set forth in the underwriting
agreement (the “
Underwriting Agreement
”) to which this Exhibit A-2 is attached.
(i) The Company has been duly incorporated and is validly existing as a corporation in active
status under the laws of the State of Wisconsin.
(ii) The Company has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Disclosure Package and the Prospectus and to enter
into and perform its obligations under the Underwriting Agreement.
(iii) Each Subsidiary set forth on Schedule D to the Underwriting Agreement has been duly
incorporated and is validly existing as a corporation or limited liability company in good standing
(or equivalent status) under the laws of the jurisdiction of its incorporation or formation, and
has corporate or limited liability company authority to own, lease and operate its properties and
to conduct its business as described in the Disclosure Package and the Prospectus; except as
otherwise disclosed in the Registration Statement, the Disclosure Package and the Prospectus, all
of the issued and outstanding capital stock or membership interests, as the case may be, of each
Subsidiary has been duly authorized and validly issued, and, in the case of capital stock, is fully
paid and non-assessable and, to the best of my knowledge, except for the outstanding shares of
preferred stock of Wisconsin Electric Power Company or as otherwise set forth on Schedule D, is
owned by the Company, directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; to the best of my knowledge, none of the
outstanding shares of capital stock or membership interests, as the case may be, of any Subsidiary
was issued in violation of the preemptive or similar rights of any securityholder of such
Subsidiary.
(iv) The Underwriting Agreement has been duly authorized, executed and delivered by the
Company.
(v) The Indenture has been duly authorized, executed and delivered by the Company, has been
duly qualified under the 1939 Act and (assuming the due authorization, execution and delivery
thereof by the Trustee) constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(vi) The Securities are in the form contemplated by the Indenture, have been duly authorized
by the Company and, assuming that the Securities have been duly authenticated by the Trustee in the
manner described in its certificate delivered to you today (which fact the Underwriting Agreement
provides I need not determine by an inspection of the Securities), the
Securities have been duly executed, issued and delivered by the Company and constitute valid
and binding obligations of the Company, enforceable against the Company in accordance with their
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights generally, general
equitable principles (regardless of whether enforcement is considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing, and are entitled to the benefits of
the Indenture.
(vii) To the best of my knowledge, there are no statutes or regulations that are required to
be described in the Disclosure Package or the Prospectus that are not described as required.
(viii) All descriptions in the Registration Statement of written contracts and other documents
to which the Company or its Subsidiaries are a party are accurate in all material respects; to the
best of my knowledge, there are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto, and the descriptions thereof or references
thereto are correct in all material respects.
(ix) To the best of my knowledge, neither the Company nor any Subsidiary is in violation of
its charter or by-laws and no default by the Company or any Subsidiary exists in the due
performance or observance of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument that is
described or referred to in the Registration Statement, the Disclosure Package or the Prospectus or
filed or incorporated by reference as an exhibit to the Registration Statement, except for any such
default that would not have a Material Adverse Effect.
(x) To the best of my knowledge, no filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental authority or agency
(other than under the 1933 Act and the 1933 Act Regulations and the 1939 Act, which have been
obtained or made, or as may be required under the securities or blue sky laws of the various
states, as to which I express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Underwriting Agreement or for the offering, issuance,
sale or delivery of the Securities.
(xi) The execution, delivery and performance of the Underwriting Agreement, the Indenture and
the Securities and the consummation of the transactions contemplated in the Underwriting Agreement
and in the Registration Statement, the Disclosure Package and the Prospectus (including the
issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as
described in the Disclosure Package and the Prospectus under the caption “Use of Proceeds”) and
compliance by the Company with its obligations under the Underwriting Agreement, the Indenture and
the Securities do not and will not, whether with or without the giving of notice or lapse of time
or both, conflict with or constitute a breach of or default or similar event under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary pursuant to any written contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or any
other agreement or instrument, known to me, to which the Company or any Subsidiary is a party
or by which it or any of them may be bound, or to which any of the property or assets of the
Company or any Subsidiary is subject (except for such conflicts, breaches, similar events or
defaults or liens, charges or encumbrances that would not have a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or by-laws of the Company, or
any applicable law, statute, rule, regulation, judgment, order, writ or decree, known to me, of any
government, government instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its properties, assets or operations.
(xii) The Securities and the Indenture conform as to legal matters in all material respects to
the descriptions thereof contained in the Disclosure Package and the Prospectus.
I, or members of my staff, have participated in conferences with officers and other
representatives of the Company, counsel to and representatives of the Underwriters and
representatives of the independent public accountants for the Company at which conferences the
contents of the Prospectus, the Registration Statement and the Disclosure Package and related
matters were discussed. Given the character of determinations involved in the preparation of such
documents, I am not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration Statement, the Disclosure
Package or the Prospectus and have made no independent check or verification thereof (except as
otherwise indicated above). On the basis of the foregoing, no facts have come to my attention that
lead me to believe that the Registration Statement, as of the date of the Underwriting Agreement,
or any subsequent amendment thereto, at the time such amendment became effective, 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, that the Prospectus contained,
as of its date, or contains, as of the date hereof, an untrue statement of a material fact or
omitted, as of its date, or omits, as of the date hereof, to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading or that the Disclosure Package, taken together as a whole, as of the Execution Time,
contained 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,
not misleading (it being understood that I have not been asked to comment and express no opinion or
belief with respect to the Form T-1 or the financial statements, including the notes thereto, or
any other financial or statistical data set forth or referred to in the Registration Statement, the
Prospectus or the Disclosure Package).
In rendering such opinion, such counsel may rely as to matters of fact (but not as to legal
conclusions), to the extent such counsel deems proper, on certificates of responsible officers of
the Company, representatives of the Trustee and public officials. In giving such opinion such
counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the
State of Wisconsin and the federal law of the United States, upon the opinions of counsel
satisfactory to the Representatives. Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991).
Exhibit 4.2
Replacement Capital Covenant
, dated as of May 11, 2007 (this “
Replacement Capital Covenant
”),
by Wisconsin Energy Corporation, a Wisconsin corporation (together with its successors and assigns,
the “
Corporation
”), in favor of and for the benefit of each Covered Debtholder (as defined below).
Recitals
A. On the date hereof, the Corporation is issuing $500,000,000 aggregate principal amount of
its 2007 Series A Junior Subordinated Notes due 2067 (including any such junior subordinated notes
issued after the date hereof that may be consolidated and form a single series with such junior
subordinated notes issued on the date hereof, the “
Subordinated Notes”)
.
B. This Replacement Capital Covenant is the “
Replacement Capital Covenant
” referred to in the
Prospectus Supplement, dated May 8, 2007, relating to the Subordinated Notes which supplements the
Corporation’s Prospectus, dated May 7, 2007 (together, the “
Prospectus
”).
C. The Corporation, in entering into and disclosing the content of this Replacement Capital
Covenant in the manner provided below, is doing so with the intent that the covenants provided for
in this Replacement Capital Covenant be enforceable by each Covered Debtholder and that the
Corporation be estopped from disregarding the covenants in this Replacement Capital Covenant, in
each case to the fullest extent permitted by applicable law.
D. The Corporation acknowledges that reliance by each Covered Debtholder upon the covenants in
this Replacement Capital Covenant is reasonable and foreseeable by the Corporation and that, were
the Corporation to disregard its covenants in this Replacement Capital Covenant, each Covered
Debtholder would have sustained an injury as a result of its reliance on such covenants.
NOW, THEREFORE, the Corporation hereby covenants and agrees as follows in favor of and for the
benefit of each Covered Debtholder.
SECTION 1.
Definitions
. Capitalized terms used in this Replacement Capital Covenant
(including the Recitals) have the meanings set forth in Schedule I hereto.
SECTION 2.
Limitations on Redemption, Defeasance or Purchase of Subordinated Notes
. The
Corporation hereby promises and covenants to and for the benefit of each Covered Debtholder that
the Corporation shall not redeem, purchase or defease or discharge any portion of the principal
amount of the Subordinated Notes through the deposit of money and/or U.S. Government Obligations as
contemplated by Section 8.02 of the Indenture (herein referred to as “defeasance”), and shall cause
its Subsidiaries not to purchase, all or any part of the Subordinated Notes on or before the
Termination Date except to the extent that the principal amount repaid or defeased or the
applicable redemption or purchase price does not exceed the sum of the following amounts raised
through the issuance of Replacement Capital Securities:
(a) the Applicable Percentage of (i) the aggregate amount of the net cash proceeds the
Corporation and its Subsidiaries have received from the sale of Common Stock and Rights to
acquire Common Stock, and (ii) the Market Value of any Common Stock that has been issued in
connection with the conversion into or exchange for Common Stock of any convertible or
exchangeable securities, other than, in the case of (ii), securities for which the
Corporation or any of its Subsidiaries has received equity credit from any NRSRO;
plus
(b) the aggregate amount of net cash proceeds received by the Corporation and its
Subsidiaries from the sale of Replacement Capital Securities (other than the securities set
forth in clause (a) above);
in each case, to Persons other than the Corporation and its Subsidiaries within the applicable
Measurement Period (without double counting proceeds received in any prior Measurement Period);
provided
that the limitations in this Section 2 shall not restrict the repayment, redemption or
other acquisition of any Subordinated Notes that have been previously defeased or purchased in
accordance with this Replacement Capital Covenant.
SECTION 3.
Covered Debt
. (a) The Corporation represents and warrants that the Initial
Covered Debt is Eligible Debt.
(b) On or during the 30-day period immediately preceding any Redesignation Date with respect
to the Covered Debt then in effect, the Corporation shall identify the series of Eligible Debt that
will become the Covered Debt on and after such Redesignation Date in accordance with the following
procedures:
(i) the Corporation shall identify each series of its then outstanding long-term
indebtedness for money borrowed that is Eligible Debt;
(ii) if only one series of the Corporation’s then outstanding long-term indebtedness
for money borrowed is Eligible Debt, such series shall become the Covered Debt commencing on
the related Redesignation Date;
(iii) if the Corporation has more than one outstanding series of long-term indebtedness
for money borrowed that is Eligible Debt, then the Corporation shall identify the series
that has the latest stated final maturity date as of the date the Corporation is applying
the procedures in this Section 3(b), and such series shall become the Covered Debt on the
related Redesignation Date;
(iv) the series of outstanding long-term indebtedness for money borrowed that is
determined to be Covered Debt pursuant to clause (ii) or (iii) above shall be the Covered
Debt for purposes of this Replacement Capital Covenant for the period commencing on the
related Redesignation Date and continuing to but not including the Redesignation Date as of
which a new series of outstanding long-term indebtedness is next determined to be the
Covered Debt pursuant to the procedures set forth in this Section 3(b); and
(v) in connection with such identification of a new series of Covered Debt (including
pursuant to the paragraph below), the Corporation shall, as provided in Section 3(c), give a
notice and file with the Commission a current report on Form 8-K under the Securities
Exchange Act including or incorporating by reference this Replacement Capital Covenant as an
exhibit within the time frame provided for in such section.
Notwithstanding any other provisions of this Replacement Capital Covenant, if a series of
Eligible Senior Debt of the Corporation has become the Covered Debt in accordance with this Section
3(b), on the date on which the Corporation issues a new series of Eligible Subordinated Debt, then
-2-
immediately upon such issuance such new series of Eligible Subordinated Debt shall become the
Covered Debt and the applicable series of Eligible Senior Debt shall cease to be the Covered Debt.
(c)
Notice
. In order to give effect to the intent of the Corporation described in Recital C,
the Corporation covenants that (i) simultaneously with the execution of this Replacement Capital
Covenant or as soon as practicable after the date hereof (A) notice shall be given to the Holders
of the Initial Covered Debt and the trustee under the indenture establishing such debt, in the
manner provided in the indenture or similar instrument relating to the Initial Covered Debt, of
this Replacement Capital Covenant and the rights granted to such Holders hereunder and (B) the
Corporation shall file a copy of this Replacement Capital Covenant with the Commission as an
exhibit to a Current Report on Form 8-K (or any successor form) under the Securities Exchange Act;
(ii) so long as the Corporation is a reporting company under the Securities Exchange Act, the
Corporation shall include in each Annual Report on Form 10-K (or any successor form) filed with the
Commission under the Securities Exchange Act a description of the covenant set forth in Section 2
and identify the series of long-term indebtedness for borrowed money that is Covered Debt as of the
date such Form 10-K (or any successor form) is filed with the Commission; (iii) if a series of the
Corporation’s long-term indebtedness for money borrowed (A) becomes Covered Debt or (B) ceases to
be Covered Debt, notice shall be given of such occurrence within 30 days to the holders of such
long-term indebtedness for money borrowed in the manner provided for in the indenture or other
instrument under which such long-term indebtedness for money borrowed was issued, and the
Corporation shall report such change in a Current Report on Form 8-K (or any successor form), which
must include or incorporate by reference this Replacement Capital Covenant, and in the
Corporation’s next Quarterly Report on Form 10-Q (or any successor form) or Annual Report on Form
10-K (or any successor form), as applicable; (iv) upon succession of any new entity as the
Corporation hereunder as a result of a merger, consolidation, binding share exchange, sale, lease
or transfer of all or substantially all of the assets or other business combination of the
Corporation as it existed prior thereto, notice of such occurrence shall be given within 30 days to
the holders of the Covered Debt in the manner provided for in the indenture or other instrument
under which such long-term indebtedness for money borrowed was issued and the Corporation shall
report such change in a Current Report on Form 8-K (or any successor form), which must include or
incorporate by reference this Replacement Capital Covenant, and in the Corporation’s next Quarterly
Report on Form 10-Q (or any successor form) or Annual Report on Form 10-K (or any successor form),
as applicable; (v) if, and only if, the Corporation ceases to be a reporting company under the
Securities Exchange Act, the Corporation will (A) post on its website (or any other similar
electronic platform generally available to the public) the information otherwise required to be
included in Securities Exchange Act filings pursuant to clauses (ii) and (iii) of this Section 3(c)
and (B) cause a notice of the execution of this Replacement Capital Covenant to be posted on the
Bloomberg screen for the Initial Covered Debt or any successor Bloomberg screen and each similar
third-party vendor’s screen the Corporation reasonably believes is appropriate (each an
“Investor
Screen”
) and cause a hyperlink of the execution of this Replacement Capital Covenant to be included
on the Investor Screen for each series of Covered Debt, in each case to the extent permitted by
Bloomberg or such similar third-party vendor, as the case may be; and (vi) promptly upon request by
any Holder of Covered Debt, such Holder will be provided with a conformed copy of this Replacement
Capital Covenant.
SECTION 4.
Termination, Amendment and Waiver
. (a) The obligations of the Corporation pursuant
to this Replacement Capital Covenant shall remain in full force and effect until the earliest date
(the “
Termination Date
”) to occur of (i) May 15, 2037, or if earlier, the date on which the
Subordinated Notes are otherwise paid, redeemed, defeased or purchased in full (in compliance with
the terms of Section 2 of this Replacement Capital Covenant), (ii) the date, if any, on which the
Holders of a majority by principal amount of the then-effective series of Covered Debt consent or
agree in writing to
-3-
the termination of this Replacement Capital Covenant and the obligations of the Corporation
hereunder, (iii) the date on which the Corporation has no series of then outstanding long-term
indebtedness for money borrowed that is Eligible Senior Debt or Eligible Subordinated Debt (in each
case without giving effect to the rating requirement in clause (b) of the definition of each such
term) and (iv) the date on which the Subordinated Notes are accelerated as a result of an event of
default under the Indenture and the Securities Resolution. From and after the Termination Date,
the obligations of the Corporation pursuant to this Replacement Capital Covenant shall be of no
further force and effect.
(b) This Replacement Capital Covenant may be amended or supplemented from time to time by a
written instrument signed by the Corporation with the consent of the Holders of at least a majority
in principal amount of the then-effective series of Covered Debt,
provided
that this Replacement
Capital Covenant may be amended or supplemented from time to time by a written instrument signed
only by the Corporation (and without the consent of the Holders of the then-effective series of
Covered Debt) if any of the following apply (it being understood that any such amendment or
supplement may fall into one or more of the following): (i) such amendment or supplement
eliminates Common Stock, Rights to acquire Common Stock, Debt Exchangeable for Common Equity and/or
Mandatorily Convertible Preferred Stock as Replacement Capital Securities, if, in the case of this
clause, after the date of this Replacement Capital Covenant, an accounting standard or interpretive
guidance of an existing accounting standard issued by an organization or regulator that has
responsibility for establishing or interpreting accounting standards in the United States becomes
effective such that there is more than an insubstantial risk that the failure to eliminate Common
Stock, Rights to acquire Common Stock, Debt Exchangeable for Common Equity and/or Mandatorily
Convertible Preferred Stock as Replacement Capital Securities would result in a reduction in the
Corporation’s earnings per share as calculated in accordance with generally accepted accounting
principles in the United States
(“EPS”
), or the Corporation otherwise has been advised in writing
by a nationally recognized independent accounting firm that there is more than an insubstantial
risk that the failure to eliminate such securities as Replacement Capital Securities would result
in a reduction of the Corporation’s EPS, (ii) the effect of such amendment or supplement is solely
to impose additional restrictions on the ability of the Corporation or its Subsidiaries to redeem,
defease or purchase the Subordinated Notes or to impose additional restrictions on, or to eliminate
certain of, the types of securities qualifying as Replacement Capital Securities (other than
securities which are covered by clause (i) above) and an officer of the Corporation has delivered
to the Holders of the then-effective series of Covered Debt in the manner provided for in the
indenture or other instrument with respect to such Covered Debt a written certificate to that
effect, (iii) such amendment or supplement extends the date specified in Section 4(a)(i), the
Stepdown Date or both, or (iv) such amendment or supplement is not adverse to the rights of the
Covered Debtholders hereunder and an officer of the Corporation has delivered to the Holders of the
then-effective series of Covered Debt in the manner provided for in the indenture or other
instrument with respect to such Covered Debt a written certificate stating that, in his or her
determination, such amendment or supplement is not adverse to the Covered Debtholders.
(c) For purposes of Sections 4(a) and 4(b), the Holders whose consent or agreement is required
to terminate, amend or supplement the obligations of the Corporation under this Replacement Capital
Covenant shall be the Holders of the then-effective Covered Debt as of a record date established by
the Corporation that is not more than 30 days prior to the date on which the Corporation proposes
that such termination, amendment or supplement becomes effective.
SECTION 5.
Miscellaneous
. (a)
This Replacement Capital Covenant shall be governed by and
construed in accordance with the laws of the State of New York.
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(b) This Replacement Capital Covenant shall be binding upon the Corporation and its successors
and assigns and shall inure to the benefit of the Covered Debtholders as they exist from
time-to-time (it being understood and agreed by the Corporation that any Person who is a Covered
Debtholder at the time such Person acquires, holds or sells Covered Debt shall retain its status as
a Covered Debtholder for so long as the series of long-term indebtedness for borrowed money owned
by such Person is Covered Debt and, if such Person initiates a claim or proceeding to enforce its
rights under this Replacement Capital Covenant after the Corporation has violated its covenants in
Section 2 and before the series of long-term indebtedness for money borrowed held by such Person is
no longer Covered Debt, such Person’s rights under this Replacement Capital Covenant shall not
terminate by reason of such series of long-term indebtedness for money borrowed no longer being
Covered Debt). The Corporation agrees that, if at any time the Covered Debt is held by a trust
(for example, where the Covered Debt is part of an issuance of trust preferred securities), a
holder of the securities issued by such trust may enforce (including by instituting legal
proceedings) this Replacement Capital Covenant directly against the Corporation as though such
holder owned the Covered Debt directly, and the holders of such trust securities shall be deemed
Holders of Covered Debt for purposes of this Replacement Capital Covenant for so long as the
indebtedness held by such trust remains Covered Debt hereunder. Other than the Covered Debtholders
as provided in the two previous sentences, no other Person shall have any rights under this
Replacement Capital Covenant or be deemed a third party beneficiary of this Replacement Capital
Covenant. In particular, no holder of the Subordinated Notes is a third party beneficiary of this
Replacement Capital Covenant, it being understood that such holders may have rights under the
Indenture and the Securities Resolution.
(c) All demands, notices, requests and other communications to the Corporation under this
Replacement Capital Covenant shall be deemed to have been duly given and made if in writing and (i)
if served by personal delivery upon the Corporation, on the day so delivered (or, if such day is
not a Business Day, the next succeeding Business Day), (ii) if delivered by registered post or
certified mail, return receipt requested, or sent to the Corporation by a national or international
courier service, on the date of receipt by the Corporation (or, if such date of receipt is not a
Business Day, the next succeeding Business Day), or (iii) if sent by telecopier, on the day
telecopied, or if not a Business Day, the next succeeding Business Day,
provided
that the telecopy
is promptly confirmed by telephone confirmation thereof, and in each case to the Corporation at the
address set forth below, or at such other address as the Corporation may thereafter notify to
Covered Debtholders or post on its website as the address for notices under this Replacement
Capital Covenant:
Wisconsin Energy Corporation
231 West Michigan Street
P.O. Box 1331
Milwaukee, Wisconsin 53201
Attention: Treasurer
Telephone: (414) 221-2345
Telecopy: (414) 221-2511
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IN WITNESS WHEREOF
, the Corporation has caused this Replacement Capital Covenant to
be executed by a duly authorized officer, as of the day and year first above written.
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WISCONSIN ENERGY CORPORATION
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By:
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/s/
Jeffrey West
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Name:
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Jeffrey West
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Title:
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Vice President and Treasurer
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Definitions
“
Alternative Payment Mechanism
” means, with respect to any Qualifying Capital Securities,
provisions in the related transaction documents that require the issuer, in its discretion, to
issue (or use commercially reasonable efforts to issue) one or more types of APM Qualifying
Securities raising eligible proceeds at least equal to the deferred Distributions on such
Qualifying Capital Securities and apply the proceeds to pay unpaid Distributions on such Qualifying
Capital Securities, commencing on the earlier of (x) the first Distribution Date after commencement
of a deferral period on which the Corporation pays current Distributions on such Qualifying Capital
Securities and (y) the fifth anniversary of the commencement of such deferral period, and that:
(a) define “eligible proceeds” to mean, for purposes of such Alternative Payment Mechanism,
the net proceeds (after underwriters’ or placement agents’ fees, commissions or discounts and other
expenses relating to the issuance or sale, where applicable, and including the fair market value of
property received by the Corporation or any of its Subsidiaries as consideration for such
securities) that the Corporation has received during the 180 days prior to the related Distribution
Date from the issuance of APM Qualifying Securities to Persons other than the Corporation and its
Subsidiaries, up to the Preferred Cap (as defined in (d) below) in the case of APM Qualifying
Securities that are Qualifying Preferred Stock or Mandatorily Convertible Preferred Stock;
(b) permit the Corporation to pay current Distributions on any Distribution Date out of any
source of funds but (x) require the Corporation to pay deferred Distributions only out of eligible
proceeds and (y) prohibit the Corporation from paying deferred Distributions out of any source of
funds other than eligible proceeds;
(c) if deferral of Distributions continues for more than one year (or such shorter period as
may be provided for in the terms of such securities), require the Corporation not to redeem or
purchase any APM Qualifying Securities or any securities that rank
pari passu
with or junior to any
APM Qualifying Securities that the Corporation has issued to settle deferred Distributions in
respect to that deferral period until at least one year after all deferred Distributions have been
paid (a “
Repurchase Restriction
”);
(d) limit the obligation of the Corporation to issue (or use commercially reasonable efforts
to issue) APM Qualifying Securities up to:
(A) in the case of APM Qualifying Securities that are Common Stock or
Qualifying Warrants, either (i) during the first five years of any deferral period
or (ii) with respect to deferred Distributions attributable to the first five
years of any deferral period (provided that such limitation shall not apply after
the ninth anniversary of the commencement of any deferral period), to a number of
shares of Common Stock and rights to purchase a number of shares of Common Stock,
in the aggregate, not in excess of 2% of the outstanding number of shares of
Common Stock, in each case as of the date of the Corporation’s most recent
publicly available consolidated financial statements at the time of such issuance
(the “
Common Cap
”); and
(B) in the case of APM Qualifying Securities that are Qualifying Preferred
Stock or Mandatorily Convertible Preferred Stock, an amount from the issuance of
such Qualifying Preferred Stock and then-still outstanding Mandatorily Convertible
Preferred Stock pursuant to the related Alternative Payment Mechanism (including,
in
I-1
the case of Qualifying Preferred Stock, at any point in time from all prior
issuances thereof pursuant to such Alternative Payment Mechanism) equal to 25% of
the initial liquidation or principal amount of the Qualifying Capital Securities
that are the subject of the related Alternative Payment Mechanism (the “
Preferred
Cap
”);
(e) in the case of Qualifying Capital Securities other than Qualifying Preferred Stock,
include a Bankruptcy Claim Limitation Provision; and
(f) permit the Corporation, at its option, to provide that if the Corporation is involved in a
merger, consolidation, amalgamation, binding share exchange or conveyance, transfer or lease of
assets substantially as an entirety to any other person or a similar transaction (a “
business
combination
”) where immediately after the consummation of the business combination more than 50% of
the voting stock of the surviving entity of the business combination, or the entity to whom all or
substantially all of the Corporation’s assets are conveyed, transferred or leased, is owned by the
shareholders of the other party to the business combination, then clauses (a), (b) and (c) above
will not apply to any deferral period that is terminated on the next Distribution Date following
the date of consummation of the business combination;
provided
(and it being understood) that:
(a) the Alternative Payment Mechanism may at the discretion of the Corporation include a share
cap limiting the issuance of APM Qualifying Securities consisting of Common Stock, Qualifying
Warrants and Mandatorily Convertible Preferred Stock, in each case to a maximum issuance cap to be
set at the discretion of the Corporation (a
“Share Cap”
);
provided
that such Share Cap will be
subject to the Corporation’s agreement to use commercially reasonable efforts to increase the Share
Cap when reached and (i) only to the extent it can do so and simultaneously satisfy their future
fixed or contingent obligations under other securities and derivative instruments that provide for
settlement or payment in shares of Common Stock or (ii) if the Corporation cannot increase the
Share Cap as contemplated in the preceding clause, by requesting its Board of Directors to adopt a
resolution for shareholder vote at the next occurring annual shareholders meeting to increase the
number of shares of the Corporation’s authorized Common Stock for purposes of satisfying their
obligations to pay deferred distributions;
(b) the Corporation shall not be obligated to issue (or use commercially reasonable efforts to
issue) APM Qualifying Securities for so long as a Market Disruption Event has occurred and is
continuing;
(c) if, due to a Market Disruption Event or otherwise, the Corporation is able to raise and
apply some, but not all, of the eligible proceeds necessary to pay all deferred Distributions on
any Distribution Date, the Corporation will apply any available eligible proceeds to pay accrued
and unpaid Distributions on the applicable Distribution Date in chronological order subject to the
Common Cap, the Preferred Cap, and the Share Cap (if any), as applicable; and
(d) if the Corporation has outstanding more than one class or series of securities under which
it is obligated to sell a type of APM Qualifying Securities and apply some part of the proceeds to
the payment of deferred Distributions, then on any date and for any period the amount of net
proceeds received by the Corporation from those sales and available for payment of deferred
Distributions on such securities shall be applied to such securities on a pro rata basis up to the
Common Cap, the
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Preferred Cap and the Share Cap (if any), as applicable, in proportion to the total amounts
that are due on such securities.
“
APM Qualifying Securities
” means, with respect to an Alternative Payment Mechanism, any Debt
Exchangeable for Preferred Equity or any Mandatory Trigger Provision, one or more of the following
(as designated in the transaction documents for any Qualifying Capital Securities that include an
Alternative Payment Mechanism or a Mandatory Trigger Provision or for any Debt Exchangeable for
Preferred Equity):
(a) Common Stock;
(b) Qualifying Warrants;
(c) Qualifying Preferred Stock; and
(d) Mandatorily Convertible Preferred Stock
provided
that if the APM Qualifying Securities for any Alternative Payment Mechanism, any Debt
Exchangeable for Preferred Equity or any Mandatory Trigger Provision include both Common Stock and
Qualifying Warrants, such Alternative Payment Mechanism, Debt Exchangeable for Preferred Equity or
Mandatory Trigger Provision may permit, but need not require, the Corporation to issue Qualifying
Warrants.
“Applicable Percentage”
means 200% with respect to any redemption, purchase or defeasance of
Subordinated Notes prior to the Termination Date.
“Bankruptcy Claim Limitation Provision
” means, with respect to any Qualifying Capital
Securities that have an Alternative Payment Mechanism or a Mandatory Trigger Provision, provisions
that, upon any liquidation, dissolution, winding up or reorganization or in connection with any
insolvency, receivership or proceeding under any bankruptcy law with respect to the issuer, limit
the claim of the holders of such Qualifying Capital Securities to Distributions that accumulate
during (a) any deferral period, in the case of Qualifying Capital Securities that have an
Alternative Payment Mechanism or (b) any period in which the issuer fails to satisfy one or more
financial tests set forth in the terms of such securities or related transaction agreements, in the
case of Qualifying Capital Securities having a Mandatory Trigger Provision, to:
(i) in the case of Qualifying Capital Securities having an Alternative Payment
Mechanism or Mandatory Trigger Provision with respect to which the APM Qualifying Securities
do not include Qualifying Preferred Stock or Mandatorily Convertible Preferred Stock, 25% of
the stated or principal amount of such securities then outstanding; and
(ii) in the case of any other Qualifying Capital Securities, an amount not in excess of
the sum of (x) the amount of accumulated and unpaid Distributions (including compounded
amounts) that relate to the earliest two years of the portion of the deferral period for
which Distributions have not been paid and (y) an amount equal to the excess, if any, of the
Preferred Cap over the aggregate amount of net proceeds from the sale of Qualifying
Preferred Stock or Mandatorily Convertible Preferred Stock that the issuer has applied to
pay such Distributions pursuant to the Alternative Payment Mechanism or the Mandatory
Trigger Provision,
provided
that the holders of such securities are deemed to agree that, to
the extent the remaining claim exceeds the amount set
I-3
forth in subclause (x), the amount they receive in respect of such excess shall not
exceed the amount they would have received had the claim for such excess ranked
pari passu
with the interests of the holders, if any, of Qualifying Preferred Stock or Mandatorily
Convertible Preferred Stock.
“
Business Day
” means each day other than (a) a Saturday or Sunday, (b) a day on which banking
institutions in The City of New York are authorized or required by law to remain closed or (c) a
day on which the Federal Reserve Bank of New York is not open, and, on or after May 15, 2017, a day
that is not a London business day. A “
London business day
” is any day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market.
“
Commission
” means the United States Securities and Exchange Commission.
“Common Cap
” has the meaning specified in the definition of Alternative Payment Mechanism.
“
Common Stock
” means any equity securities of the Corporation (including equity securities
held as treasury shares and equity securities sold pursuant to any dividend reinvestment plan or
employee benefit plans) that have no preference in the payment of dividends or amounts payable upon
the liquidation, dissolution or winding up of the Corporation (including a security that tracks the
performance of, or relates to the results of, a business, unit or division of the Corporation), and
any securities that have no preference in the payment of dividends or amounts payable upon the
liquidation, dissolution or winding up of the Corporation and are issued in exchange therefor in
connection with a merger, consolidation, binding share exchange, business combination,
recapitalization or other similar event.
“
Corporation
” has the meaning specified in the introduction to this instrument.
“
Covered Debt
” means (a) at the date of this Replacement Capital Covenant and continuing to
but not including the first Redesignation Date, the Initial Covered Debt and (b) thereafter,
commencing with each Redesignation Date and continuing to but not including the next succeeding
Redesignation Date, the Eligible Debt identified pursuant to Section 3(b) as the Covered Debt for
such period.
“
Covered Debtholder
” means each Person (whether a Holder or a beneficial owner holding through
a participant in a clearing agency) that buys, holds or sells long-term indebtedness for money
borrowed of the Corporation during the period that such long-term indebtedness for money borrowed
is Covered Debt.
“
Debt Exchangeable for Equity
” means Debt Exchangeable for Common Equity or Debt Exchangeable
for Preferred Equity.
“
Debt Exchangeable for Common Equity
” means a security or combination of securities (together
in this definition, “
such securities
”) that:
(a) gives the holder a beneficial interest in (i) a fractional interest in a stock purchase
contract for a share of Common Stock that will be settled in three years or less, with the number
of shares of common stock purchasable pursuant to such stock purchase contract to be within a range
established at the time of issuance of such securities and (ii) debt securities of the Corporation
that are not redeemable at the option of the issuer or the holder thereof prior to the settlement
of the stock purchase contracts;
I-4
(b) provides that the investors directly or indirectly grant to the Corporation a security
interest in such debt securities and their proceeds (including any substitute collateral permitted
under the transaction documents) to secure the investors’ direct or indirect obligation to purchase
Common Stock pursuant to such stock purchase contracts;
(c) includes a remarketing feature pursuant to which the debt securities of the Corporation
are remarketed to new investors commencing not later than the settlement date of the purchase
contract; and
(d) provides for the proceeds raised in the remarketing to be used to purchase Common Stock
under the stock purchase contracts and, if there has not been a successful remarketing by the
settlement date of the purchase contract, provides that the stock purchase contracts will be
settled by the Corporation exercising its remedies as a secured party with respect to its debt
securities or other collateral directly or indirectly pledged by investors in the Debt Exchangeable
for Common Equity.
“
Debt Exchangeable for Preferred Equity
” means a security or combination of securities
(together in this definition, “
such securities
”) that:
(a) gives the holder a beneficial interest in (i) subordinated debt securities of the
Corporation that include a provision requiring the Corporation to issue (or use commercially
reasonable efforts to issue) one or more types of APM Qualifying Securities raising proceeds at
least equal to the deferred Distributions on such subordinated debt securities commencing not later
than the second anniversary of the commencement of such deferral period and that are the most
junior subordinated debt of the Corporation (or rank
pari passu
with the most junior subordinated
debt of the Corporation) (in this definition, “
subordinated debt
”) and (ii) a fractional interest
in a stock purchase contract for a share of Qualifying Preferred Stock of the Corporation that
ranks
pari passu
with or junior to all other preferred stock of the Corporation, as applicable (in
this definition, “
preferred stock
”);
(b) provides that the investors directly or indirectly grant to the Corporation a security
interest in such subordinated debt securities and their proceeds (including any substitute
collateral permitted under the transaction documents) to secure the investors’ direct or indirect
obligation to purchase preferred stock of the Corporation pursuant to such stock purchase
contracts;
(c) includes a remarketing feature pursuant to which the subordinated debt of the Corporation
is remarketed to new investors commencing not later than the first Distribution Date that is at
least five years after the date of issuance of securities or earlier in the event of an early
settlement event based on: (i) the dissolution of the issuer of such debt exchangeable for
preferred equity or (ii) one or more financial tests set forth in the terms of the instrument
governing such debt exchangeable for preferred equity;
(d) provides for the proceeds raised in the remarketing to be used to purchase preferred stock
of the Corporation under the stock purchase contracts and, if there has not been a successful
remarketing by the first Distribution Date that is six years after the date of issuance of such
securities, provides that the stock purchase contracts will be settled by the Corporation
exercising its remedies as a secured party with respect to its subordinated debt securities or
other collateral directly or indirectly pledged by investors in the Debt Exchangeable for Preferred
Equity;
I-5
(e) is subject to a Qualifying Replacement Capital Covenant that will apply to such securities
and preferred stock of the Corporation, and will not include Debt Exchangeable for Equity as a
Replacement Capital Security; and
(f) if applicable, after the issuance of such preferred stock of the Corporation, provides the
holders of such securities with a beneficial interest in such preferred stock of the Corporation.
“Distribution Date”
means, as to any securities or combination of securities, the dates on
which periodic Distributions on such securities are scheduled to be made.
“Distribution Period”
means, as to any securities or combination of securities, each period
from and including the later of the issuance date and the most recent Distribution Date for such
securities to but not including the next succeeding Distribution Date for such securities.
“
Distributions
” means, as to a security or combination of securities, dividends, interest
payments or other income distributions to the holders thereof that are not Subsidiaries of the
Corporation.
“
Eligible Debt
” means, at any time, indebtedness, other than the Subordinated Notes, that is
Eligible Subordinated Debt or, if no Eligible Subordinated Debt is then outstanding, Eligible
Senior Debt.
“
Eligible Senior Debt
” means, at any time in respect of any issuer, each series of outstanding
unsecured long-term indebtedness for money borrowed of such issuer that (a) upon a bankruptcy,
liquidation, dissolution or winding up of the issuer, ranks most senior among the issuer’s then
outstanding classes of unsecured indebtedness for money borrowed, (b) is then assigned a rating by
at least one NRSRO (provided that this clause (b) shall apply on a Redesignation Date only if on
such date the issuer has outstanding senior long-term indebtedness for money borrowed that
satisfies the requirements of clauses (a), (c) and (d) that is then assigned a rating by at least
one NRSRO), (c) has an outstanding principal amount of not less than $100,000,000, and (d) was
issued through or with the assistance of a commercial or investment banking firm or firms acting as
underwriters, initial purchasers or placement or distribution agents. For purposes of this
definition as applied to securities with a CUSIP number, each issuance of long-term indebtedness
for money borrowed that has (or, if such indebtedness is held by a trust or other intermediate
entity established directly or indirectly by the issuer, the securities of such intermediate entity
that have) a separate CUSIP number shall be deemed to be a series of the issuer’s long-term
indebtedness for money borrowed that is separate from each other series of such indebtedness.
“
Eligible Subordinated Debt
” means, at any time in respect of any issuer, each series of the
issuer’s then-outstanding unsecured long-term indebtedness for money borrowed that (a) upon a
bankruptcy, liquidation, dissolution or winding up of the issuer, ranks senior to the Subordinated
Notes and subordinate to the issuer’s then outstanding series of unsecured indebtedness for money
borrowed that ranks most senior, (b) is then assigned a rating by at least one NRSRO (provided that
this clause (b) shall apply on a Redesignation Date only if on such date the issuer has outstanding
subordinated long-term indebtedness for money borrowed that satisfies the requirements in clauses
(a), (c) and (d) that is then assigned a rating by at least one NRSRO), (c) has an outstanding
principal amount of not less than $100,000,000, and (d) was issued through or with the assistance
of a commercial or investment banking firm or firms acting as underwriters, initial purchasers or
placement or distribution agents. For purposes of this definition as applied to securities with a
CUSIP number, each issuance of long-term indebtedness for money borrowed that has (or, if such
indebtedness is held by a trust or other intermediate entity
I-6
established directly or indirectly by the issuer, the securities of such intermediate entity
that have) a separate CUSIP number shall be deemed to be a series of the issuer’s long-term
indebtedness for money borrowed that is separate from each other series of such indebtedness.
“
Holder
” means, as to the Covered Debt then in effect, each holder of such Covered Debt as
reflected on the securities register maintained by or on behalf of the Corporation with respect to
such Covered Debt.
“
Indenture
” means the Indenture, dated as of March 15, 1999, between the Corporation and The
Bank of New York Trust Company, N.A. (as successor to JPMorgan Trust Company, National Association)
(successor to Bank One Trust Company, N.A.) (successor to The First National Bank of Chicago), as
trustee.
“
Initial Covered Debt
” means the Corporation’s 6.20% Senior Notes due April 1, 2033 (CUSIP
976657 AG 1).
“
Intent-Based Replacement Disclosure
” means, as to any security or combination of securities,
that the issuer has publicly stated its intention, either in the prospectus or other offering
document under which such securities were initially offered for sale or in filings with the
Commission made by the issuer under the Securities Exchange Act prior to or contemporaneously with
the issuance of such securities, that the issuer, to the extent the securities provide the issuer
with equity credit, will redeem, purchase or defease such securities only with the proceeds of
replacement capital securities that have terms and provisions at the time of redemption, purchase
or defeasance that are as much or more equity-like than the securities then being redeemed,
purchased or defeased, raised within 180 days of the applicable redemption or purchase date.
“
Mandatorily Convertible Preferred Stock
” means preferred stock with (a) no prepayment
obligation on the part of the issuer thereof, whether at the election of the holders or otherwise,
and (b) a requirement that the preferred stock convert into Common Stock within three years from
the date of its issuance at a conversion ratio within a range established at the time of issuance
of the preferred stock.
“
Mandatory Trigger Provision
” means, as to any Qualifying Capital Securities, provisions in
the terms thereof or of the related transaction agreements that:
(a) require, or at its option in the case of non-cumulative perpetual preferred stock permit,
the issuer of such Qualifying Capital Securities to make payment of Distributions on such
securities only pursuant to the issue and sale of APM Qualifying Securities, within no more than
two years of a failure of the issuer to satisfy one or more financial tests set forth in the terms
of such Qualifying Capital Securities or related transaction agreements, in an amount such that the
net proceeds of such sale are at least equal to the amount of unpaid Distributions on such
Qualifying Capital Securities (including without limitation all deferred and accumulated amounts),
and in either case require the application of the net proceeds of such sale to pay such unpaid
Distributions,
provided
that (i) such Mandatory Trigger Provision shall limit the issuance and sale
of Common Stock and Qualifying Warrants the proceeds of which may be applied to pay such
Distributions pursuant to such provision to the Common Cap, unless the Mandatory Trigger Provision
requires such issuance and sale within one year of such failure, and (ii) the amount of Qualifying
Preferred Stock or Mandatorily Convertible Preferred Stock the net proceeds of which the issuer may
apply to pay such Distributions pursuant to such provision may not exceed the Preferred Cap;
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(b) other than in the case of non-cumulative preferred stock, prohibit the issuer from
repurchasing any APM Qualifying Securities or any securities that are
pari passu
with or junior to
its APM Qualifying Securities, the proceeds of which were used to pay deferred Distributions since
such failure before the date six months after the issuer applies the net proceeds of the sales
described in clause (a) to pay such unpaid Distributions in full;
(c) other than in the case of non-cumulative perpetual preferred stock, include a Bankruptcy
Claim Limitation Provision; and
(d) if deferral of Distributions continues for more than one year (or such shorter period as
may be provided for in the terms of such securities), require the Corporation not to redeem or
purchase any APM Qualifying Securities or any securities that rank
pari passu
with or junior to any
APM Qualifying Securities that the Corporation has issued to settle deferred Distributions in
respect to that deferral period until at least one year after all deferred Distributions have been
paid;
provided
(and it being understood) that:
(a) the issuer will not be obligated to issue (or use commercially reasonable efforts to
issue) any such APM Qualifying Securities for so long as a Market Disruption Event has occurred and
is continuing;
(b) if, due to a Market Disruption Event or otherwise, the issuer is able to raise and apply
some, but not all, of the eligible proceeds necessary to pay all deferred Distributions on any
Distribution Date, the issuer will apply any available eligible proceeds to pay accrued and unpaid
Distributions on the applicable Distribution Date in chronological order subject to the Common Cap
and Preferred Cap, as applicable; and
(c) if the issuer has outstanding more than one class or series of securities under which it
is obligated to sell a type of any such APM Qualifying Securities and applies some part of the
proceeds to the payment of deferred Distributions, then on any date and for any period the amount
of net proceeds received by the issuer from those sales and available for payment of deferred
Distributions on such securities shall be applied to such securities on a
pro rata
basis up to the
Common Cap and the Preferred Cap, as applicable, in proportion to the total amounts that are due on
such securities.
No remedy other than Permitted Remedies will arise by the terms of such securities or related
transaction agreements in favor of the holders of such securities as a result of the issuer’s
failure to pay Distributions because of the Mandatory Trigger Provision until Distributions have
been deferred for one or more Distribution Periods that total together at least ten years.
“
Market Disruption Events
” means the occurrence or existence of any of the following events or
sets of circumstances:
(a) the Corporation would be required to obtain the consent or approval of its shareholders or
a regulatory body (including, without limitation, any securities exchange) or governmental
authority to issue or sell APM Qualifying Securities and such consent or approval has not yet been
obtained notwithstanding the Corporation’s commercially reasonable efforts to obtain such consent
or approval or a regulatory authority instructs the Corporation not to sell or offer for sale APM
Qualifying Securities at such time;
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(b) trading in securities generally (or in the Common Stock or the preferred stock of the
Corporation) on the New York Stock Exchange or any other national securities exchange or
over-the-counter market on which the Common Stock and/or the Corporation’s preferred stock is then
listed or traded shall have been suspended or the settlement of such trading generally shall have
been materially disrupted or minimum prices shall have been established on any such exchange or
market by the Commission, by the relevant exchange or by any other regulatory body or governmental
body having jurisdiction, and the establishment of such minimum prices materially disrupts or
otherwise has a material adverse effect on trading in, or the issuance and sale of, Common Stock
and/or such preferred stock;
(c) a banking moratorium shall have been declared by the federal or state authorities of the
United States and such moratorium materially disrupts or otherwise has a material adverse effect on
trading in, or the issuance and sale of, the APM Qualifying Securities;
(d) a material disruption shall have occurred in commercial banking or securities settlement
or clearance services in the United States and such disruption materially disrupts or otherwise has
a material adverse effect on trading in, or the issuance and sale of, the APM Qualifying
Securities;
(e) the United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States, there shall have been a declaration of a
national emergency or war by the United States or there shall have occurred any other national or
international calamity or crisis and such event materially disrupts or otherwise has a material
adverse effect on trading in, or the issuance and sale of, the APM Qualifying Securities;
(f) there shall have occurred such a material adverse change in general domestic or
international economic, political or financial conditions, including without limitation as a result
of terrorist activities, and such change materially disrupts or otherwise has a material adverse
effect on trading in, or the issuance and sale of, the APM Qualifying Securities;
(g) an event occurs and is continuing as a result of which the offering document for such
offer and sale of APM Qualifying Securities would, in the reasonable judgment of the Corporation,
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 and either (a) the
disclosure of that event at such time, in the reasonable judgment of the Corporation, is not
otherwise required by law and would have a material adverse effect on the business of the
Corporation or (b) the disclosure relates to a previously undisclosed proposed or pending material
business transaction, the disclosure of which would impede the ability of the Corporation to
consummate such transaction,
provided
that no single suspension period contemplated by this
paragraph (g) shall exceed 90 consecutive days and multiple suspension periods contemplated by this
paragraph (g) shall not exceed an aggregate of 180 days in any 360-day period; or
(h) the Corporation reasonably believes, for reasons other than those referred to in paragraph
(g) above, that the offering document for such offer and sale of APM Qualifying Securities would
not be in compliance with a rule or regulation of the Commission and the Corporation is unable to
comply with such rule or regulation or such compliance is unduly burdensome,
provided
that no
single suspension period contemplated by this paragraph (h) shall exceed 90 consecutive days and
multiple suspension periods contemplated by this paragraph (h) shall not exceed an aggregate of 180
days in any 360-day period.
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The definition of “
Market Disruption Event
” as used in any Qualifying Capital Securities may
include less than all of the paragraphs outlined above, as determined by the Corporation at the
time of issuance of such securities, and in the case of clauses (a), (b), (c) and (d), as
applicable to a circumstance where the Corporation would otherwise endeavor to issue preferred
stock, shall be limited to circumstances affecting markets where the preferred stock of the
Corporation trades or where a listing for its trading is being sought.
“
Market Value
” means, on any date, (i) in the case of Common Stock, the closing sale price per
share of Common Stock (or if no closing sale price is reported, the average of the bid and ask
prices or, if more than one in either case, the average of the average bid and the average ask
prices) on that date as reported in composite transactions by the New York Stock Exchange or, if
the Common Stock is not then listed on the New York Stock Exchange, as reported by the principal
U.S. securities exchange on which the Common Stock is traded or quoted; if the Common Stock is not
either listed or quoted on any U.S. securities exchange on the relevant date, the market price will
be the average of the mid-point of the bid and ask prices for the Common Stock on the relevant date
submitted by at least three nationally recognized independent investment banking firms selected by
the Corporation for this purpose and (ii) in the case of Rights to acquire Common Stock, a value
determined by a nationally recognized independent investment banking firm selected by the
Corporation’s Board of Directors (or a duly authorized committee thereof) for this purpose.
“
Measurement Period
” with respect to any redemption, purchase or defeasance of Subordinated
Notes, means the period (i) beginning on the date that is 180 days prior to the date of delivery of
notice of such redemption (such date of delivery, the “
notice date
”) or the date of such purchase
or defeasance and (ii) ending on such notice date or the date of such purchase or defeasance.
Measurement Periods cannot run concurrently.
“Most Junior Subordinated Debt”
means debt securities of the Corporation that rank upon the
Corporation’s liquidation, dissolution or winding-up junior to all of the Corporation’s other
long-term indebtedness for money borrowed (other than the Corporation’s long-term indebtedness for
money borrowed from time to time outstanding that by its terms ranks
pari passu
with such
securities) and
pari passu
with the claims of the Corporation’s trade creditors.
“Non-Cumulative
” means, with respect to any securities, that the issuer thereof may
elect not to make any number of periodic Distributions without any remedy arising under the terms
of the securities or related agreements in favor of the holders, other than one or more Permitted
Remedies. Securities that include an Alternative Payment Mechanism shall also be deemed to be
Non-Cumulative for all purposes of this Replacement Capital Covenant.
“
NRSRO
” means a nationally recognized statistical rating organization within the meaning of
Rule 15c3-1(c)(2)(vi)(F) under the Securities Exchange Act.
“
Optional Deferral Provision
” means, as to any securities, a provision in the terms thereof or
of the related transaction agreements to the effect that either:
(a) (i) the issuer of such securities may, in its sole discretion, defer in whole or in part
payment of Distributions on such securities for one or more consecutive Distribution Periods of up
to five years or, if a Market Disruption Event is continuing, ten years, without any remedy other
than Permitted Remedies and (ii) such securities are subject to an Alternative Payment Mechanism
(
provided
that such Alternative Payment Mechanism need not apply during the first five years of any
deferral period
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and need not include a Common Cap, Preferred Cap, Bankruptcy Claim Limitation Provision or
Repurchase Restriction); or
(b) the issuer of such securities may, in its sole discretion, defer or skip in whole or in
part payment of Distributions on such securities for one or more consecutive Distribution Periods
up to at least ten years, without any remedy other than Permitted Remedies.
“
Permitted Remedies
” means, with respect to any securities, one or more of the following
remedies:
(a) rights in favor of the holders of such securities permitting such holders to elect
one or more directors of the issuer (including any such rights required by the listing
requirements of any stock or securities exchange on which such securities may be listed or
traded), and
(b) complete or partial prohibitions on the issuer paying Distributions on or
repurchasing Common Stock or other securities that rank
pari passu
with or junior as to
Distributions to such securities for so long as Distributions on such securities, including
unpaid Distributions, remain unpaid.
“
Person
” means any individual, corporation, partnership, joint venture, trust, limited
liability company, corporation or other entity, unincorporated organization or government or any
agency or political subdivision thereof.
“
Preferred Cap
” has the meaning specified in the definition of Alternative Payment Mechanism.
“
Prospectus
” has the meaning specified in Recital B.
“
Qualifying Capital Securities
” means securities (other than Common Stock, Rights to acquire
Common Stock, Mandatorily Convertible Preferred Stock and Debt Exchangeable for Equity) that rank
pari passu
with or junior to the Most Junior Subordinated Debt of the Corporation upon its
liquidation, dissolution or winding up and, in the determination of the Corporation’s Board of
Directors reasonably construing the definitions and other terms of this Replacement Capital
Covenant, meet one of the following criteria:
(a) in connection with any redemption, defeasance or purchase of Subordinated Notes on
or prior to the Stepdown Date:
(i) securities issued by the Corporation or its Subsidiaries that (A) have no
maturity or a maturity of at least 60 years and (B) either (x) are subject to a
Qualifying Replacement Capital Covenant and are Non-Cumulative or (y) have a
Mandatory Trigger Provision and an Optional Deferral Provision and are subject to
Intent-Based Replacement Disclosure; or
(ii) securities issued by the Corporation or its Subsidiaries that (A) have
no maturity or a maturity of at least 40 years, (B) are subject to a Qualifying
Replacement Capital Covenant, (C) have an Optional Deferral Provision and (D) have
a Mandatory Trigger Provision; or
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(iii) securities issued by the Corporation or its Subsidiaries that (A) have
no maturity or a maturity of at least 60 years, (B) are subject to a Qualifying
Replacement Capital Covenant and (C) have an Optional Deferral Provision;
(iv) securities issued by the Corporation or its Subsidiaries that (A) have no
maturity or a maturity of at least 60 years and (B) are subject to Intent-Based
Replacement Disclosure and (C) are Non-Cumulative;
(v) securities issued by the Corporation or its Subsidiaries that (A) have no
maturity or a maturity of at least 60 years, (B) have an Optional Deferral Provision
and (C) have a Mandatory Trigger Provision;
(vi) securities issued by the Corporation or its Subsidiaries that (A) have no
maturity or a maturity of at least 40 years, (B) are subject to a Qualifying
Replacement Capital Covenant and (C) are Non-Cumulative;
(vii) securities issued by the Corporation or its Subsidiaries that (A) either
(x) have no maturity or a maturity of at least 40 years and are subject to
Intent-Based Replacement Disclosure or (y) have no maturity or a maturity of at
least 25 years and are subject to a Qualifying Replacement Capital Covenant, (B)
have an Optional Deferral Provision and (C) have a Mandatory Trigger Provision; or
(viii) any other preferred stock issued by the Corporation that (A) has no
prepayment obligation on the part of the issuer thereof, whether at the election of
the holders or otherwise, (B) has no maturity or a maturity of at least 60 years and
(C) is subject to a Qualifying Replacement Capital Covenant; or
(b) in connection with any redemption, defeasance or purchase of the Subordinated Notes
after the Stepdown Date:
(i) all securities described under clause (a) of this definition;
(ii) securities issued by the Corporation or its Subsidiaries that (A) have no
maturity or a maturity of at least 60 years, (B) are subject to Intent-Based
Replacement Disclosure and (C) have an Optional Deferral Provision;
(iii) securities issued by the Corporation or its Subsidiaries that (A) have no
maturity or a maturity of at least 40 years, (B) are subject to a Qualifying
Replacement Capital Covenant and (C) have an Optional Deferral Provision;
(iv) securities issued by the Corporation or its Subsidiaries that (A) either
(x) have no maturity or a maturity of at least 40 years and are subject to
Intent-Based Replacement Disclosure or (y) have no maturity or a maturity of at
least 25 years and are subject to a Qualifying Replacement Capital Covenant and (B)
are Non-Cumulative;
(v) securities issued by the Corporation or its Subsidiaries that (A) have no
maturity or a maturity of at least 25 years, (B) are subject to Intent-Based
Replacement Disclosure, (C) have an Optional Deferral Provision and (D) have a
Mandatory Trigger Provision; or
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(vi) any other preferred stock issued by the Corporation that (A) has no
prepayment obligation on the part of the issuer thereof, whether at the election of
the holders or otherwise and (B) either (x) has no maturity or a maturity of at
least 60 years and is subject to Intent-Based Replacement Disclosure or (y) has no
maturity or a maturity of at least 40 years and is subject to a Qualifying
Replacement Capital Covenant.
“
Qualifying Preferred Stock
” means non-cumulative perpetual preferred stock issued by the
Corporation or its Subsidiaries that (a) ranks
pari passu
with or junior to all other preferred
stock of the Corporation and contains no remedies other than Permitted Remedies and (b) either (i)
is subject to Intent-Based Replacement Disclosure and has a provision that prohibits the issuer
from paying any dividends thereon upon its failure to satisfy one or more financial tests set forth
therein or (ii) is subject to a Qualifying Replacement Capital Covenant.
“
Qualifying Replacement Capital Covenant
” means (i) a replacement capital covenant
substantially similar to this Replacement Capital Covenant or (ii) a replacement capital covenant,
as identified by the Board of Directors of the Corporation, acting in good faith and in its
reasonable discretion and reasonably construing the definitions and other terms of this Replacement
Capital Covenant, (a) entered into by an issuer that at the time it enters into such replacement
capital covenant is a reporting company under the Securities Exchange Act and (b) that restricts
the issuer from redeeming, defeasing or purchasing identified securities except to the extent of
the applicable percentage of the net proceeds of specified replacement capital securities that have
terms and provisions at the time of redemption, defeasance or purchase that are as much or more
equity-like than the securities then being redeemed, defeased or purchased, raised within the 180
day period prior to the applicable redemption, defeasance or purchase date.
“
Qualifying Warrants
” means net share settled warrants to purchase Common Stock that have an
exercise price greater than the current stock market price of the issuer’s Common Stock as of their
date of issuance, that do not entitle the issuer to redeem for cash and the holders of such
warrants are not entitled to require the issuer to repurchase for cash in any circumstance.
“
Redesignation Date
” means, as to the Covered Debt in effect at any time, the earliest of (a)
the date that is two years prior to the final maturity date of such Covered Debt, (b) if the
Corporation elects to redeem, or the Corporation or a Subsidiary of the Corporation elects to
purchase or purchases, such Covered Debt either in whole or in part with the consequence that after
giving effect to such redemption or purchase the outstanding principal amount of such Covered Debt
is less than $100,000,000, the applicable redemption or purchase date and (c) if such Covered Debt
is not Eligible Subordinated Debt, the date on which the Corporation issues long-term indebtedness
for money borrowed that is Eligible Subordinated Debt.
“
Replacement Capital Covenant
” has the meaning specified in the introduction to this
instrument.
“
Replacement Capital Securities
” means
(a) Common Stock and Rights to acquire Common Stock;
(b) Mandatorily Convertible Preferred Stock;
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(c) Debt Exchangeable for Equity; and
(d) Qualifying Capital Securities.
“
Repurchase Restriction
” has the meaning specified in the definition of Alternative Payment
Mechanism.
“
Rights to acquire Common Stock
” includes any right to acquire Common Stock, including any
right to acquire Common Stock pursuant to a stock purchase plan or employee benefit plan. Rights
to acquire Common Stock shall include Qualifying Warrants.
“
Securities Exchange Act
” means the Securities Exchange Act of 1934, as amended.
“
Securities Resolution”
means Securities Resolution No. 5 under the Indenture, dated as of May
8, 2007.
“
Share Cap
” has the meaning specified in the definition of Alternative Payment Mechanism.
“
Stepdown Date
” means May 15, 2017.
“
Subordinated Notes
” has the meaning specified in Recital A.
“
Subsidiary
” means, at any time, any Person the shares of stock or other ownership interests
of which having ordinary voting power to elect a majority of the board of directors or other
managers of such Person are at the time owned, or the management or policies of which are otherwise
at the time controlled, directly or indirectly through one or more intermediaries (including other
Subsidiaries) or both, by another Person.
“
Termination Date
” has the meaning specified in Section 4(a).
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