Draft of October 9, 1995
AMENDED AND RESTATED AGREEMENT
OF
LIMITED PARTNERSHIP
OF
CITIZENS UTILITIES CAPITAL L.P.
Dated as of ______ __, 1995
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
CITIZENS UTILITIES CAPITAL L.P.
AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP of Citizens Utilities Capital L.P., a
Delaware limited partnership ("Citizens Capital"), dated
as of __________, 1995, among Citizens Utilities Company,
a Delaware corporation (the "Company" or "Citizens"), as
the general partner, [ ], a [Delaware]
corporation, as the initial limited partner (the "Initial
Limited Partner") and such other Persons (as defined
herein) who become Limited Partners (as defined herein)
as provided herein.
WHEREAS, Citizens and the Initial Limited
Partner entered into an Agreement of Limited Partnership,
dated as of __________, 1995 (the "Original Limited
Partnership Agreement");
WHEREAS, the Certificate of Limited Partnership
of Citizens Capital was filed with the Office of the
Secretary of State of the State of Delaware on
__________, 1995;
WHEREAS, Citizens Utilities Trust, a Delaware
business trust (the "Trust"), formed under the Amended
and Restated Declaration of Trust, among the Company, as
Sponsor, Chemical Bank, as property trustee (the
"Property Trustee"), and Chemical Bank Delaware, as
Delaware trustee (the "Delaware Trustee"), and Xxxxxx X.
XxXxxxxx and Xxxxxx X. Xxxxxxxxx, as regular trustees
(the "Regular Trustees"), dated as of ______ __, 1995
(the "Declaration") will issue and sell up to
____________ (or _____________ if the over-allotment
option is exercised) of its ____% Convertible Trust
Preferred Securities (the "Convertible Preferred
Securities") with a liquidation preference of $50 per
Convertible Preferred Security, having an aggregate
liquidation preference with respect to the assets of the
Trust of $___________ (or $__________ if the over-
allotment option is exercised) pursuant to the
Underwriting Agreement (the "Underwriting Agreement")
dated ______ __, 1995, among the Company, Citizens
Capital, the Trust and the Underwriters named therein;
WHEREAS, the trustees of the Trust, on behalf
of the Trust, will issue and sell to the Company
Convertible Common Securities evidencing an ownership
interest in the Trust, registered in the name of the
Company, in an aggregate amount equal to at least three
percent (3%) of the total capitalization of the Trust,
equivalent to at least ________ Convertible Common
Securities (or at least __________ Convertible Common
Securities if the over-allotment option is exercised),
with a liquidation amount of $50 per Convertible Common
Security, having an aggregate liquidation amount with
respect to the assets of the Trust of at least
$___________ (or at least $________ if the over-allotment
option is exercised) (the "Convertible Common
Securities");
WHEREAS, the Trust will use all the proceeds
from the sale of the Convertible Preferred Securities and
the Convertible Common Securities to purchase Partnership
Preferred Securities (as hereinafter defined) in an
aggregate liquidation preference of $____________ (or
$______________ if the over-allotment option is
exercised);
WHEREAS, the Company is guaranteeing the
payment of distributions on the Partnership Preferred
Securities, and payments upon and liquidation with
respect to the Partnership Preferred Securities, to the
extent provided in the Partnership Preferred Securities
Guarantee Agreement (the "Partnership Guarantee
Agreement") executed by the Company for the benefit of
the holders of the Partnership Preferred Securities from
time to time;
WHEREAS, so long as any Convertible Preferred
Securities are outstanding, the Declaration provides that
the holders of Convertible Preferred Securities may cause
the Conversion Agent to (a) exchange such Convertible
Preferred Securities for Partnership Preferred Securities
or Convertible Debentures (as hereinafter defined), as
the case may be, held by the Trust, (b) in the event
Partnership Preferred Securities are held by the Trust,
direct the General Partner to exchange such Partnership
Preferred Securities for Convertible Debentures held by
Citizens Capital and (c) immediately convert such
Convertible Debentures into Common Stock (as hereinafter
defined);
WHEREAS, the Company wishes to sell to Citizens
Capital, and Citizens Capital wishes to purchase from the
Company, Convertible Debentures in an aggregate principal
amount equal to ___________________, the aggregate stated
liquidation preference of the Partnership Preferred
Securities issued and sold by Citizens Capital; and
WHEREAS, the Partners desire to continue
Citizens Capital under the Act (as defined herein) and to
amend and restate the Original Limited Partnership
Agreement in its entirety.
NOW, THEREFORE, in consideration of the
agreements and obligations set forth herein and for other
good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto agree to amend and restate the Original Limited
Partnership Agreement as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 DEFINITIONS. Unless the context
otherwise requires, the terms defined in this Article I
shall, for the purposes of this Agreement, have the
meanings herein specified.
"Act" means the Delaware Revised Uniform
Limited Partnership Act, as amended from time to time.
"Action" means any action permitted to be taken
by the General Partner under this Agreement relating to
the terms of the Partnership Preferred Securities, which
action shall be in writing.
"Additional Distributions" means Distributions
that shall be declared and paid by Citizens Capital on
any Distribution arrearages in respect of the Partnership
Preferred Securities at the rate of __% per annum
compounded quarterly.
"Additional Interest" has the meaning set forth
in Annex C hereto.
"Affiliate" means, with respect to a specified
Person, (a) any Person directly or indirectly owning,
controlling or holding with power to vote 10% or more of
the outstanding voting securities or other ownership
interests of the specified Person, (b) any Person 10% or
more of whose outstanding voting securities or other
ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified
Person, (c) any Person directly or indirectly
controlling, controlled by, or under common control with
the specified Person, (d) a partnership in which the
specified Person is a general partner, (e) any officer or
director of the specified Person and (f) if the specified
Person is an officer, director, general partner or
employee, any other entity for which the specified Person
acts in any such capacity.
"Agreement" means the Limited Partnership
Agreement.
"Book-Entry Interest" means a beneficial
interest in the LP Certificates, ownership and transfers
of which shall be made through the book-entry system of a
Clearing Agency as described in Section 10.4.
"Business Day" has the meaning set forth in
Annex C hereto.
"Capital Account" has the meaning set forth in
Section 3.3.
"Cash Equivalent Amount" has the meaning set
forth in Section 6.4(c)(iii).
"Citizens Capital" has the meaning set forth in
Annex C hereto.
"Certificate" means the Certificate of Limited
Partnership of Citizens Capital filed with the Secretary
of State of the State of Delaware on August __, 1995, as
it may be amended and restated from time to time.
"Clearing Agency" means an organization
registered as a "Clearing Agency" pursuant to Section 17A
of the Exchange Act that is acting as depository for the
Partnership Preferred Securities and in whose name (or
nominee's name) shall be registered one or more global LP
Certificates and which shall undertake to effect book-
entry transfers and pledges of the Partnership Preferred
Securities.
"Clearing Agency Participant" means a broker,
dealer, bank, other financial institution or other Person
for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of interest in
securities deposited with the Clearing Agency.
"Closing Date" means the Closing Time and each
"Date of Delivery" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986,
as amended from time to time, or any corresponding
federal tax statute enacted after the date of this
Agreement. A reference to a specific section (Section)
of the Code refers not only to such specific section but
also to any corresponding provision of any federal tax
statute enacted after the date of this Agreement, as such
specific section or corresponding provision is in effect
on the date of application of the provisions of this
Agreement containing such reference.
"Common Stock" has the meaning set forth in
Annex C hereto.
"Company" has the meaning set forth in the
forepart of this Agreement and Annex C hereto.
"Company Event" has the meaning set forth in
Annex C hereto.
"Conversion Agent" has the meaning set forth in
Annex C hereto.
"Conversion Date" has the meaning set forth in
Section 6.3(b) of this Agreement.
"Conversion Price" has the meaning set forth in
Section 6.3(a) of this Agreement.
"Convertible Common Securities" has the meaning
set forth in Annex C hereto.
"Convertible Debentures" has the meaning set
forth in Annex C hereto.
"Convertible Preferred Securities" has the
meaning set forth in Annex C hereto.
"Declaration" has the meaning set forth in
Annex C hereto.
"Deferred Interest" means interest that shall
accrue on any interest on the Convertible Debentures that
is not paid quarterly and that shall accrue at the rate
of __% per annum compounded quarterly.
"Definitive LP Certificates" has the meaning
set forth in Section 10.4(a) of this Agreement.
"Distributions" means the cumulative
distributions in cash or Common Stock, as the case may
be, from the Partnership with respect to the Interests
represented by the Partnership Preferred Securities,
accruing from the first Closing Date and payable
quarterly in arrears as set forth herein, commencing
__________, 1995.
"Distribution Declaration Date" has the meaning
set forth in Annex C hereto.
"Distribution Declaration Notice" has the
meaning set forth in Annex C hereto.
"Distribution Payment Date" has the meaning set
forth in Section 6.2(b)(ii) of this Agreement.
"DTC" means The Depository Trust Company, the
initial Clearing Agency.
"Election Agent" shall have the meaning set
forth in Annex C hereto.
"Election Period" has the meaning set forth in
Annex C hereto.
"Eligible Institution" means (a) the Fiscal
Agent or (b) a depository institution organized under the
laws of the United States of America or any one of the
states thereof or the District of Columbia (or any
domestic branch of a foreign bank), (1)(i) which has
either (A) a long-term unsecured debt rating of AAA or
better by S&P and Aaa or better by Moody's or (B) a
short-term unsecured debt rating or a certificate of
deposit rating of A-1+ or better by S&P and P-1 or better
by Moody's and (ii) whose deposits are insured by the
FDIC or (2)(i) the parent of which has a long-term or
short-term unsecured debt rating which signifies
investment grade and (ii) whose deposits are insured by
the FDIC.
"Eligible Investment Account" means either (a)
a segregated account with an Eligible Institution or (b)
a segregated trust account with the corporate trust
department of a depository institution organized under
the laws of the Untied States of America or any one of
the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), having corporate
trust powers and acting as trustee for funds deposited in
such account, so long as any of the securities of such
depository institution shall have a credit rating from
each Rating Agency in one of its generic rating
categories which signifies investment grade.
"Eligible Investment" mean book-entry
securities, negotiable instruments, cash or securities
represented by instruments in bearer or registered form
which evidence:
(a) direct obligations of, and obligations
fully guaranteed as to timely payment by, the
Government of the United States of America;
(b) demand deposits, time deposits or
certificates of deposit of any depository
institution or trust company incorporated under the
laws of the United States of America or any state
thereof and subject to supervision and examination
by federal or state banking or depository
institution authorities; PROVIDED, HOWEVER, that at
the time of the investment or contractual commitment
to invest therein, the commercial paper or other
short-term unsecured debt obligations (other than
such obligations the rating of which is based on the
credit of a Person other than such depository
institution or trust company) thereof shall have a
credit rating from each of S&P, Moody's and, if
rated by Fitch, Fitch in the highest investment
category granted thereby;
(c) commercial paper having, at the time of
the investment or contractual commitment to invest
therein, a rating from each of S&P, Moody's and, if
rated by Fitch, Fitch in the highest investment
rating category granted thereby;
(d) investments in money market funds having a
rating from each of S&P and Moody's in the highest
investment rating category granted thereby;
(e) demand deposits, time deposits and
certificates of deposit which are fully insured by
the FDIC;
(f) bankers' acceptances issued by any
depository institution or trust company referred to
in clause (b) above; or
(g) repurchase obligations with respect to any
security that is a direct obligation of, or fully
guaranteed by, the Government of the United States
of America or any agency or instrumentality thereof,
the obligations of which are backed by the full
faith and credit of the United States of America, in
either case entered into with (i) a depository
institution or trust company (acting as principal)
described in clause (b) or (ii) a depository
institution or trust company which is an Eligible
Institution and the deposits of which are insured by
the FDIC.
"Equivalent Value" has the meaning set forth in
Annex C hereto.
"Event of Default" has the meaning set forth in
Annex C hereto.
"Exchange Act" means the Securities Exchange
Act of 1934, as amended.
"FDIC" means the Federal Deposit Insurance
Corporation or any successor thereto.
"Fiscal Agent" means ______________.
"Fiscal Period" means each calendar quarter.
"Fiscal Year" means (i) the period commencing
upon the formation of Citizens Capital and ending on
December 31, 1995, and (ii) any subsequent twelve (12)
month period commencing on January 1 and ending on
December 31.
"Fitch" means Fitch Investors Service, Inc. or
any successor thereto.
"General Partner" has the meaning set forth in
Annex C hereto.
"General Partnership Security" has the meaning
set forth in Annex C hereto.
"Guarantee Agreements" has the meaning set
forth in Annex C hereto.
"Holder" or "Partnership Preferred Security
Holder" means a Limited Partner in whose name an LP
Certificate representing Partnership Preferred Securities
is registered.
"Indenture" has the meaning set forth in Annex
C hereto.
"Indenture Trustee" has the meaning set forth
in Annex C hereto.
"Initial Limited Partner" means _____________,
a [Delaware] corporation.
"Interest" means the entire ownership interest
of a Partner in Citizens Capital at any particular time,
including, without limitation, its interest in the
capital, profits, losses and distributions of Citizens
Capital.
"Limited Partner" means any Person who is
admitted to Citizens Capital as a Limited Partner
pursuant to the terms of this Agreement.
"Liquidation Distribution" has the meaning set
forth in Section 6.2(g).
"Liquidator" has the meaning specified in
Section 11.3 of this Agreement.
"LP Certificate" means a certificate
substantially in the form attached hereto as Annex A,
evidencing the Partnership Preferred Securities held by a
Limited Partner.
"Majority or Other Stated Percentage in
Liquidation Preference" means Holder(s) of Partnership
Preferred Securities who are the record owners of
Partnership Preferred Securities whose aggregate
liquidation preferences represent not less than 50% or
not less than such stated percentage of the aggregate
liquidation preference of all Partnership Preferred
Securities then outstanding.
"Maximum Stock Sales Proceeds" has the meaning
set forth in Section 6.4(c)(ii).
"Moody's" means Xxxxx'x Investors Service, Inc.
or any successor thereto.
"Net Income" and "Net Loss", respectively, for
any Fiscal Period mean the income and loss, respectively,
of Citizens Capital for such Fiscal Period as determined
in accordance with the method of accounting followed by
Citizens Capital for federal income tax purposes,
including, for all purposes, the net income, if any, from
Eligible Investments and any income exempt from tax
expenditures of Citizens Capital which are described in
the Code; provided, however, that any item allocated
under Sections 4.2 and 4.3 shall be excluded from the
computation of Net Income and Net Loss.
"No Recognition Opinion" has the meaning set
forth in Annex C hereto.
"Notice of Conversion" has the meaning set
forth in Section 4.2(a) of this Agreement.
"Original Limited Partnership Agreement" has
the meaning set forth in the recitals to this Agreement.
"Partners" means the General Partner and, if
appointed pursuant to Section 6.2(h), any Special
Representative and the Limited Partners, collectively,
where no distinction is required by the context in which
the term is used.
"Partnership Distribution Account" has the
meaning specified in Section 3.6(b) of this Agreement.
"Partnership Event" has the meaning set forth
in Annex C hereto.
"Partnership Guarantee Agreement" means the
Partnership Preferred Securities Guarantee Agreement
dated as of __________, 1995 of Citizens in favor of the
Partnership Preferred Security Holders with respect to
the Partnership Preferred Securities.
"Partnership Investment Company Act Event" has
the meaning set forth in Annex C hereto.
"Partnership Preferred Securities" has the
meaning set forth in Annex C hereto.
"Partnership Preferred Security Owner" means,
with respect to a Book Entry Interest, a Person who is
the beneficial owner of such Book Entry Interest as
reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case
in accordance with the rules of such Clearing Agency or
Clearing Agency Participant).
"Partnership Purchase Agreement" means the
partnership purchase agreement between the Trust and
Citizens Capital providing for the purchase of the
Partnership Preferred Securities.
"Partnership Securities" has the meaning set
forth in Annex C hereto.
"Partnership Tax Event" has the meaning set
forth in Annex C hereto.
"Paying Agent" shall have the meaning set forth
in Annex C hereto.
"Person" has the meaning set forth in Annex C
hereto.
"Power of Attorney" means the Power of Attorney
granted pursuant to Section 13.2.
"Property Trustee" has the meaning set forth in
Annex C hereto.
"Purchase Price" for any Partnership Preferred
Security means the amount paid per Partnership Preferred
Security pursuant to the Partnership Purchase Agreement.
"Redemption Price" has the meaning set forth in
Section 6.2(c).
"Rating Agencies" means Fitch, Moody's and S&P.
"Rating Agency Event" has the meaning set forth
in Annex C hereto.
"Securities Act" means the Securities Act of
1933, as amended.
"Share Transfer and Valuation Date" has the
meaning set forth in Annex C hereto.
"Shortfall Amount" has the meaning set forth in
Section 6.4(c)(ii).
"Special Representative" means the Person
appointed (i) to enforce Partnership Preferred Security
Holders' rights under the Partnership Guarantee
Agreement, (ii) to enforce Citizens Capital's rights
against Citizens under the Convertible Debentures or
(iii) to exercise rights otherwise exercisable by the
General Partner to declare and pay distributions on the
Partnership Preferred Securities as provided in Section
6.2(h) of this Agreement.
"S&P" means Standard & Poor's Ratings Group or
any successor thereof.
"Tax Matters Partner" means the General Partner
designated as such in Section 9.8 hereof.
"Trading Day" has the meaning set forth in
Annex C hereto.
"Transfer Agent" means Chemical Bank and its
successors and assigns.
"Treasury Regulations" means the income tax
regulations, including temporary regulations, promulgated
under the Code, as such regulations may be amended from
time to time (including corresponding provisions of
succeeding regulations).
"Trust" has the meaning set forth in Annex C
hereto.
"Trust Event" has the meaning set forth in
Annex C hereto.
"Trust Investment Company Act Event" has the
meaning set forth in Annex C hereto.
"Trust Securities" means the Convertible Common
Securities and the Convertible Preferred Securities.
"Trust Tax Event" has the meaning set forth in
Annex C hereto.
"Underwriters" means the underwriters named in
Schedule I to the Underwriting Agreement.
"Underwriting Agreement" means the Underwriting
Agreement dated __________, 1995, among the Company,
Citizens Capital, the Trust and the several Underwriters
named therein relating to the issuance and sale of the
Convertible Preferred Securities.
Section 1.2 HEADINGS. The headings and
subheadings in this Agreement are included for
convenience and identification purposes only and are in
no way intended to describe, interpret, define or limit
the scope, extent or intent of this Agreement or any
provision hereof.
ARTICLE II
CONTINUATION OF CITIZENS CAPITAL;
ADMISSION OF PARTNERSHIP PREFERRED SECURITIES HOLDERS;
WITHDRAWAL OF INITIAL LIMITED PARTNER
Section 2.1 CONTINUATION OF CITIZENS CAPITAL.
The parties hereto agree to continue Citizens Capital in
accordance with the terms of this Agreement. The General
Partner, for itself and as agent for the Limited
Partners, shall make every reasonable effort to assure
that an amendment to the Certificate of Limited
Partnership reflecting this Agreement, and all other
certificates and documents, are properly executed and
shall accomplish all filing, recording, publishing and
other acts necessary or appropriate for compliance with
all the requirements for the continuation of Citizens
Capital as a limited partnership under the Act and under
all other laws of the State of Delaware or such other
jurisdictions in which the General Partner determines
that Citizens Capital may conduct business. The rights
and duties of the Partners shall be as provided herein
and, subject to the terms hereof, the Act.
Section 2.2 NAME. The name of Citizens
Capital is "Citizens Utilities Capital L.P.", as such
name may be modified from time to time by the General
Partner following written notice to the Limited Partners.
Section 2.3 BUSINESS OF CITIZENS CAPITAL. The
purposes of Citizens Capital are (a) to issue limited
partnership interests in Citizens Capital in the form of
Partnership Preferred Securities, and to use
substantially all of the proceeds thereof and
substantially all of the proceeds from the capital
contributed to Citizens Capital by the General Partner to
purchase the Convertible Debentures of Citizens, (b) to
invest, at all times, at least 1% of the total capital
contributed to Citizens Capital by the Partners, (c) to
receive interest and other payments on the Convertible
Debentures in the form of cash or Common Stock and
distribute such cash or Common Stock to the Partners as
distributions on Citizens Capital or sell such number of
shares of Common Stock in the market to generate cash to
pay cash distributions on the Partnership Preferred
Securities, (d) to effect the conversion of Partnership
Preferred Securities into Common Stock and (e) except as
otherwise limited herein, to enter into, make and perform
all contracts and other undertakings, and engage in all
activities and transactions as the General Partner may
reasonably deem necessary or advisable for the carrying
out of the foregoing purposes of Citizens Capital.
Citizens Capital may not conduct any other business or
operations except as contemplated by the preceding
sentence.
Section 2.4 TERM. The term of Citizens
Capital shall commence upon the filing of the Certificate
in the Office of the Secretary of State of the State of
Delaware and shall continue for 45 years from the initial
Closing Date, unless dissolved before such date in
accordance with the provisions of this Agreement.
Section 2.5 REGISTERED AGENT AND OFFICE.
Citizens Capital's registered agent and office in
Delaware shall be The Corporation Trust Company,
Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000. At any time, the
General Partner may designate another registered agent
and/or registered office.
Section 2.6 PRINCIPAL PLACE OF BUSINESS. The
principal place of business of Citizens Capital shall be
c/o Citizens Utilities Company, High Ridge Park, X.X. Xxx
0000, Xxxxxxxx, Xxxxxxxxxxx 00000. Upon ten days written
notice to the Partners, the General Partner may change
the location of Citizens Capital's principal place of
business, provided that such change has no material
adverse effect upon any Partner.
Section 2.7 NAME AND BUSINESS ADDRESS OF
GENERAL PARTNER. The name and address of the General
Partner are as follows:
Citizens Utilities Company
Xxxx Xxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: ____________
The General Partner may change its name or business
address from time to time, in which event the General
Partner shall promptly notify the Limited Partners of any
such change.
Section 2.8 QUALIFICATION TO DO BUSINESS. The
General Partner shall cause Citizens Capital to become
qualified, formed or registered under the applicable
qualification, fictitious name or similar laws of any
jurisdiction in which Citizens Capital transacts
business.
Section 2.9 ADMISSION OF HOLDERS OF
PARTNERSHIP PREFERRED SECURITIES; WITHDRAWAL OF INITIAL
LIMITED PARTNER.
(a) Without execution of this Agreement, upon
the acquisition of an LP Certificate by a Person, whether
by purchase, gift, devise or otherwise, which acquisition
shall be deemed to constitute a request by such Person
that the books and records of Citizens Capital reflect
such Person's admission as a Limited Partner, such Person
shall be admitted to Citizens Capital as a Limited
Partner and shall become bound by this Agreement.
(b) Following the first admission of a
Partnership Preferred Security Holder to Citizens Capital
as a Limited Partner, the Initial Limited Partner shall
withdraw from Citizens Capital and shall receive the
return of its capital contribution without interest or
deduction.
(c) The name and mailing address of each
Partner and the amount contributed by such Partner to the
capital of Citizens Capital shall be listed on the books
and records of Citizens Capital. The General Partner
shall be required to update the books and records from
time to time as necessary to accurately reflect such
information.
ARTICLE III
CAPITAL CONTRIBUTIONS; REPRESENTATION OF
PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST;
CAPITAL ACCOUNTS
Section 3.1 CAPITAL CONTRIBUTIONS.
(a) The General Partner has, on or prior to
the first Closing Date, contributed an aggregate of $3.00
to the capital of Citizens Capital. The General Partner
shall on or prior to each subsequent Closing Date, make
such additional capital contributions as are necessary to
maintain its Capital Account balance at an amount equal
to at least 3% of the aggregate positive Capital Account
balances of all Partners as of the time of each such
Closing Date.
(b) The Initial Limited Partner has, prior to
the date hereof, contributed the amount of $97.00 to the
capital of Citizens Capital, which amount will be
returned to the Initial Limited Partner as contemplated
by Section 2.9(b).
(c) On each Closing Date, each Person who
acquires a Partnership Preferred Security from Citizens
Capital shall, in connection with the acquisition of such
Partnership Preferred Security, contribute to the capital
of Citizens Capital an amount in cash equal to the
Purchase Price for such Partnership Preferred Security.
(d) No Limited Partner shall at any time be
required to make any additional capital contributions to
Citizens Capital, except as may be required by law.
Section 3.2 PARTNERSHIP PREFERRED SECURITY
HOLDER'S INTEREST REPRESENTED BY L.P. CERTIFICATE. A
Partnership Preferred Security Holder's Interest shall be
represented by the L.P. Certificate held by or on behalf
of such Holder. Each Partnership Preferred Security
Holder's respective ownership of Partnership Preferred
Securities shall be set forth on the books and records of
Citizens Capital. Each Holder hereby agrees that its
Interest represented by its L.P. Certificate shall for
all purposes be personal property. A Partnership
Preferred Security Holder shall have no interest in
specific Partnership property.
Section 3.3 CAPITAL ACCOUNTS. An individual
capital account (a "Capital Account") shall be
established and maintained on the books of Citizens
Capital for each Partner in compliance with Treasury
Regulation Sections 1.704-1(b)(2)(iv) and 1.704-2, as
amended. Subject to the preceding sentence, each Capital
Account will be increased by the amount of the capital
contributions (including the Purchase Price) made by, and
the Net Income allocated to, such Partner (or predecessor
in interest) and reduced by the amount of distributions
made by Citizens Capital, and Net Losses allocated, to
the Partner (or predecessor thereof). In addition, a
Partner's Capital Account shall be increased or
decreased, as the case may be, for any items specifically
allocated to such Partner under Section 4.2 of this
Agreement, and, to the extent permitted under the
applicable Treasury Regulation, the General Partner's
Capital Account will be increased to the extent the
General Partner pays any costs or expenses of Citizens
Capital directly out of the General Partner's own funds.
If any property is distributed in kind to any Partner,
the amount of such distribution shall, solely for
purposes of reducing a Partner's Capital Account, and not
for tax purposes, be equal to the fair market value of
such Property at the time of distribution.
Section 3.4 INTEREST ON CAPITAL CONTRIBUTIONS.
Except as provided herein, no Partner shall be entitled
to interest on or with respect to any capital
contribution to Citizens Capital.
Section 3.5 WITHDRAWAL AND RETURN OF CAPITAL
CONTRIBUTIONS. Subject to Section 3.1(b), no Partner
shall be entitled to withdraw any part of such Partner's
capital contribution to Citizens Capital. No Partner
shall be entitled to receive any distributions from
Citizens Capital, except as provided in this Agreement.
Section 3.6 INVESTMENT OF CAPITAL CONTRIBUTIONS.
(a) The General Partner may establish and
maintain in the name of Citizens Capital an Eligible
Investment Account bearing a designation clearly
indicating that the funds deposited therein are held for
the benefit of the Partners. On each Closing Date, the
General Partner shall deposit from the proceeds of the
aggregate capital contributions received from the
Partners an amount equal to at least 1% of such aggregate
capital contributions into the Eligible Investment
Account. On the first Closing Date, the amount deposited
by the General Partner shall equal $_____.
(b) Funds on deposit in the Eligible
Investment Account shall be invested by the General
Partner; PROVIDED, HOWEVER, it is understood and agreed
that the General Partner shall not be liable for any loss
arising from such investment in Eligible Investments;
PROVIDED FURTHER that none of the funds deposited in the
Eligible Investment Account shall be invested in an
Eligible Investment or Eligible Investments issued by the
General Partner or an Affiliate thereof for a period of
five years following the Closing Date. All such Eligible
Investments shall be held by the General Partner for the
benefit of Citizens Capital, PROVIDED, HOWEVER, that on
the day preceding each Distribution Payment Date all
interest and other investment income (net of losses and
investment expenses) on funds on deposit in the Eligible
Investment Account shall be deposited into Citizens
Capital's account maintained by Citizens Capital for
receipt of income on the Convertible Debentures (the
"Partnership Distribution Account") and shall constitute
a portion of Citizens Capital's Net Income eligible for
distribution to the Partners. Funds on deposit in the
Eligible Investment Account shall be invested in Eligible
Investments that will mature prior to the next succeeding
Distribution Payment Date.
ARTICLE IV
ALLOCATIONS
Section 4.1 PROFITS AND LOSSES. After giving
effect to the special allocations set forth in Sections
4.2 and 4.3 and subject to further modification by
Section 4.4, which special allocations shall take
precedence over any allocations made pursuant to this
Section 4.1,
(a) Citizens Capital's Net Income for each
Fiscal Period of Citizens Capital shall be allocated as
follows:
(i) First, among Holders of Partnership
Preferred Securities, as of the close of business on
the record date for such Fiscal Period, an amount of
Net Income equal to the excess of (x) the
Distributions accrued on each Holder's Partnership
Preferred Securities from the first Closing Date
through and including the close of business on the
record date for such Fiscal Period, including any
Additional Distributions payable with respect
thereto, over (y) the amount of Net Income allocated
to each such Holder pursuant to this Section
4.1(a)(i) in all prior Fiscal Periods, including any
Additional Distributions payable with respect
thereto.
(ii) Second, to each Holder of a Partnership
Preferred Security in an amount equal to the excess
of (x) all Net Losses, if any, allocated to each
such Holder from the date of issuance of the
Partnership Preferred Security through and including
the close of such Fiscal Period pursuant to Section
4.1(b)(ii) over (y) the amount of Net Income, if
any, allocated to each such Holder pursuant to this
Section 4.1(a)(ii) in all prior Fiscal Periods.
(iii) Any remaining Net Income shall be
allocated to the General Partner.
(b) Citizens Capital's Net Loss for any Fiscal
Period shall be allocated as follows:
(i) First, to the General Partner until the
balance of the General Partner's Capital Account is
reduced to zero.
(ii) Second, among the Holders in proportion
to their respective aggregate Capital Account
balances, until the Capital Account balances of such
Holders are reduced to zero, provided, however, that
the General Partner shall make appropriate
adjustments in these allocations, in accordance with
Section 4.1(c), with respect to any Partnership
Preferred Securities as to which Net Income has been
allocated with respect to Distributions that accrued
but were not paid.
(iii) Any remaining Net Loss shall be
allocated to the General Partner.
(c) The General Partner shall make such
changes to the allocations in Sections 4.1(a) and 4.1(b)
as it deems reasonably necessary so that, in the year of
Citizens Capital's liquidation, amounts distributed to
the Partnership Preferred Security Holders in accordance
with Section 11.4(ii) shall equal their Liquidation
Distributions.
Section 4.2 SPECIAL ALLOCATIONS.
(a) CONVERSION INTO COMMON STOCK. If a Holder
delivers an irrevocable notice of conversion ("Notice of
Conversion") to the Conversion Agent which instructs the
Conversion Agent to exchange some or all of such Holder's
Partnership Preferred Securities for a portion of the
Convertible Debentures held by Citizens Capital and to
immediately convert such Convertible Debentures into
Common Stock pursuant to Section 6.3(b) of this
Agreement, such Holder shall be allocated any interest
(including original issue discount) accruing on a daily
basis on the Convertible Debentures so converted until,
but not including, the date of such conversion, but only
to the extent such interest (including original issue
discount) was not previously allocated to the Partners in
a prior Fiscal Period as part of Net Income under Section
4.1(a) of this Agreement.
(b) DISTRIBUTIONS IN COMMON STOCK. If a
Holder delivers a Notice of Distribution Election to the
General Partner which instructs Citizens Capital to have
distributions paid on a specified portion of the
Partnership Preferred Securities in the form of Common
Stock (rather than cash) on the next Distribution Payment
Date or is deemed to have made such election of any such
distribution in the form of Common Stock (rather than
cash) on such Distribution Payment Date pursuant to
Section 6.4, such Holder shall, solely for purpose of
adjusting its Capital Account, and not for tax purposes,
be allocated Net Income or Net Loss, as the case may be,
in addition to Net Income and Net Loss allocated pursuant
to Section 4.1(a), equal to the difference between the
fair market value and the book value of the Common Stock
at the time of its distribution.
(c) INCOME FROM SALE OF COMMON STOCK. Any
income, gain or loss resulting from the sale of any
shares of Common Stock, and any expenditures resulting
from or related to the sale of any shares of Common
Stock, shall be allocated entirely to the General
Partner.
(d) INCOME FROM ELIGIBLE INVESTMENTS. Any
income, gain or loss resulting from purchase, ownership
or disposition of Eligible Investments shall be allocated
entirely to the General Partner.
(e) PROPERTY AFTER PAYMENT DATES. Any cash or
shares of Common Stock or other property remaining in the
Partnership after a Payment Date after the satisfaction
of obligations to the Limited Partners shall be allocated
entirely to the General Partner.
4.3 OTHER ALLOCATION PROVISIONS
(a) All expenditures described in Code Section
705(a)(2)(B) that are incurred by, or on behalf of,
Citizens Capital and paid or otherwise reimbursed by the
General Partner shall be allocated entirely to the
General Partner.
(b) In the event any Holder unexpectedly
receives any adjustments, allocations or distributions
described in Treasury Regulation Section 1.704-
1(b)(2)(ii)(d)(4), (5) or (6), items of Net Income shall
be specially allocated to such Holder in an amount and
manner sufficient to eliminate, to the extent required by
the Treasury Regulations, the deficit, if any, in the
balance of the Capital Account of such Holder as quickly
as possible. This Section 4.3(b) is intended to comply
with then qualified income offset provision in Section
1.704(b)(2)(ii)(d) of the Treasury Regulations.
(c) For purposes of determining the profits,
losses or any other items allocable to any period,
profits, losses and any such other items shall be
determined on a daily basis, unless the General Partner
determines that another method is permissible under
Section 704 of the Code and the Treasury Regulations
promulgated thereunder. Unless otherwise specified, such
profits, losses or other items shall be determined for
each Fiscal Period.
(d) The Partners are aware of the income tax
consequences of the allocations made by this Article IV
and hereby agree to be bound by the provisions of this
Article IV in reporting their shares of Net Income and
Net Loss for U.S. federal income tax purposes.
(e) Notwithstanding anything to the contrary
that may be expressed or implied in this Article IV, the
interest of the General Partner in each item of income,
gain, loss, deduction and credit will be equal to at
least (i) at any time that aggregate capital
contributions to Citizens Capital are equal to or less
than $50,000,000, 1% of each such item and (ii) at any
time that aggregate capital contributions to Citizens
Capital are greater than $50,000,000, at least 1%,
multiplied by a fraction (not exceeding one and not less
than 0.2), the numerator of which is $50,000,000 and the
denominator of which is the lesser of (A) the aggregate
Capital Account balances of the Capital Accounts of all
Partners at such time and (B) the aggregate capital
contributions to Citizens Capital of all Partners at such
time.
(f) The Partners intend that the allocations
under Section 4.1 conform to Treasury Regulations
Sections 1.704-1(b) and 1.704-2 (including, without
limitation, the minimum gain chargeback, chargeback of
partner nonrecourse debt minimum gain, qualified income
offset and partner nonrecourse debt provisions of such
Treasury Regulations), and the General Partner shall make
such changes in the allocations under Section 4.1 as it
believes are reasonably necessary to meet the
requirements of such Treasury Regulations.
(g) Solely for the purpose of adjusting the
Capital Accounts of the Partners, and not for tax
purposes, if any property (including, without limitation,
shares of Common Stock) is distributed in kind to any
Partner, the difference between the fair market value of
such property and its book value at the time of
distribution shall be treated as gain or loss recognized
by Citizens Capital and allocated pursuant to the
provisions of Sections 4.1, 4.2 and 4.3.
Section 4.4 ALLOCATIONS FOR INCOME TAX
PURPOSES. The income, gains, losses, deductions and
credits of Citizens Capital (including the character of
such items of income, gain, loss, deductions and credits)
shall be allocated in the same manner as the items
entering into the computation of Net Income and Net Loss
are allocated under Sections 4.1, 4.2 and 4.3; provided,
however, that solely for federal, state and local income
and franchise tax purposes, but not for book or Capital
Account purposes, income, gain, loss and deductions with
respect to any property properly carried on Citizens
Capital's books at a value other than the tax basis of
such property shall be allocated in a manner determined
in the General Partner's discretion, so as to take into
account (consistently with Code Section 704(c)
principles) the difference between such property's book
value and its tax basis. Notwithstanding anything to the
contrary set forth in this Agreement, the General Partner
is authorized to modify the allocations of this Section
4.4, and Sections 4.1, 4.2 and 4.3, if necessary or
appropriate, in the General Partner's sole discretion,
for the allocations to fairly reflect the economic gain,
income or loss to each of the Partners, or as otherwise
required by the Code or the Treasury Regulations. Any
Net Income or Net Loss resulting from a difference
between the fair market value of property distributed in
kind (including, without limitation, shares of Common
Stock) that is deemed to result under Section 4.2(b) or
4.3(g), shall not be deemed to constitute Net Income or
Net Loss, as the case may be, for purposes of allocating
income, gains or losses to the Partners for federal,
state or local tax purposes.
Section 4.5 WITHHOLDING. Citizens Capital
shall comply with withholding requirements under federal,
state and local law and shall remit amounts withheld to
and file required forms with applicable jurisdictions.
To the extent that Citizens Capital is required to
withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Partner,
the amount withheld shall be deemed to be a distribution
in the amount of the withholding to the Partner. In the
event of any claimed over-withholding, Partners shall be
limited to an action against the applicable jurisdiction.
If the amount withheld was not withheld from actual
distributions, Citizens Capital may reduce subsequent
distributions by the amount of such withholding. Each
Partner agrees to furnish Citizens Capital with any
representations and forms as shall reasonably be
requested by Citizens Capital to assist it in determining
the extent of, and in fulfilling, its withholding
obligations.
ARTICLE V
DISTRIBUTIONS
Section 5.1 DISTRIBUTIONS. Limited Partners
shall receive periodic Distributions, if any, redemption
payments and liquidation distributions in accordance with
the terms of the Partnership Preferred Securities set
forth in Article VI. Subject to the rights of the
Partnership Preferred Security Holders, all cash and
other property remaining in the Partnership Distribution
Account shall be distributed to the General Partner at
such time as the General Partner shall determine.
Section 5.2 LIMITATIONS ON DISTRIBUTIONS.
Citizens Capital shall not make a distribution to any
Partner on account of such Partner's Interest if such
distribution would violate Section 17-607 of the Act or
other applicable law.
ARTICLE VI
ISSUANCE OF PARTNERSHIP PREFERRED SECURITIES
Section 6.1 GENERAL PROVISIONS REGARDING
PARTNERSHIP PREFERRED SECURITIES.
(a) There is hereby authorized for issuance
and sale Partnership Preferred Securities having an
aggregate liquidation preference not greater than $[ ]
and having the designation, annual distribution rate,
liquidation preference, redemption terms, conversion and
exchange rights and other powers, preferences and special
rights and limitations set forth in this Article VI. The
aggregate liquidation preference of Partnership Preferred
Securities authorized hereunder shall be reduced 30 days
after the first Closing Date to the amount purchased by
the Underwriters.
(b) The payment of distributions (including
payments of distributions by Citizens Capital in
liquidation or on redemption in respect of Partnership
Preferred Securities shall be guaranteed by the Company
pursuant to the Partnership Guarantee Agreement. In the
event of an appointment of a Special Representative
pursuant to Section 6.2(h), among other things, to
enforce the Partnership Guarantee Agreement, the Special
Representative may take possession of the Partnership
Guarantee Agreement for such purpose. The Partnership
Preferred Security Holders, by acceptance of such
Partnership Preferred Securities, acknowledge and agree
to the subordination provisions in, and other terms of,
the Partnership Guarantee Agreement.
(c) The proceeds received by Citizens Capital
from the issuance of Partnership Preferred Securities,
together with the proceeds of the capital contributed by
the General Partner pursuant to Section 3.1(a) of this
Agreement, but less any amounts deposited by the General
Partner in the Eligible Investment Account pursuant to
Section 3.6(a), shall be invested by Citizens Capital in
Convertible Debentures with (i) an aggregate principal
amount equal to such aggregate proceeds (less accrued
interest, if any) and (ii) an interest rate at least
equal to the distribution rate of the Partnership
Preferred Securities.
(d) Citizens Capital may not issue any other
interests in Citizens Capital, without the approval of
the Holders of not less than 66-2/3% in Liquidation
Preference of the Partnership Preferred Securities;
provided, however, that Citizens Capital may issue a
general partnership security to the Special
Representative. All Partnership Preferred Securities
shall rank senior to all other Interests in Citizens
Capital in respect of the right to receive Distributions
or other distributions and the right to receive payments
out of the assets of Citizens Capital upon voluntary or
involuntary liquidation, dissolution, winding-up or
termination of Citizens Capital. All Partnership
Preferred Securities redeemed, purchased or otherwise
acquired by Citizens Capital (including Partnership
Preferred Securities surrendered for conversion or
exchange) shall be canceled. The Partnership Preferred
Securities will be issued in registered form only.
Distributions on all Partnership Preferred Securities
shall be cumulative.
(e) No Holder shall be entitled as a matter of
right to subscribe for or purchase, or have any
preemptive right with respect to, any part of any new or
additional limited partnership interests, or of
securities convertible into any Partnership Preferred
Securities or other limited partnership interests,
whether now or hereafter authorized and whether issued
for cash or other consideration or by way of a
distribution.
(f) Neither the Company nor any Affiliate of
the Company shall have the right to vote or give or
withhold consent with respect to any Partnership
Preferred Security owned by it, directly or indirectly,
and, for purposes of any matter upon which the Limited
Partners may vote or give or withhold consent as provided
in this Agreement, Partnership Preferred Securities owned
by the Company or any Affiliate shall be treated as if
they were not outstanding.
Section 6.2 PARTNERSHIP PREFERRED SECURITIES.
(a) DESIGNATION. The Partnership Preferred
Securities, liquidation preference $50 per Partnership
Preferred Security, are hereby designated as " %
Convertible Partnership Preferred Securities".
(b) DISTRIBUTIONS. (i) Partnership Preferred
Security Holders shall be entitled to receive, when, as
and if declared by the General Partner, cumulative
Distributions at a rate per annum of % of the stated
liquidation preference of $50 per Partnership Preferred
Security, calculated on the basis of a 360-day year
consisting of 12 months of 30 days each. For any period
shorter than a full quarter period, Distributions will be
computed on the basis of the actual number of days
elapsed in such period. Distributions shall be payable
quarterly in arrears in United States dollars and, to the
extent Partnership Preferred Security Holders deliver a
Notice of Distribution Election instructing the General
Partner to pay Distributions on a specified portion of
the Interests in Common Stock, subject to the provisions
of Section 6.4, in Common Stock. If all or a portion of
a distribution is made in Common Stock as a result of a
Notice of Distribution Election, the amount of such
distribution on a Partnership Preferred Security that a
Holder shall be entitled to receive shall be an
Equivalent Value of Common Stock at the Share Transfer
and Valuation Date regardless of the fair market value of
such stock at the time of its distribution by Citizens
Capital. Such Distributions will accrue and be
cumulative whether or not they have been declared and
whether or not there are funds of Citizens Capital
legally available for the payment of Distributions.
Distributions on the Partnership Preferred Securities
shall be cumulative from the first Closing Date.
Additional Distributions upon any Distribution arrearages
shall be declared and paid in order to provide, in
effect, quarterly compounding on such Distribution
arrearages at a rate of ___% per annum compounded
quarterly, and such Additional Distributions shall
accumulate. In the event that any date on which
Distributions are payable on the Partnership Preferred
Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the
next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on
the immediately preceding Business Day, in each case with
the same force and effect as if made on such date.
(ii) Distributions on the Partnership
Preferred Securities must be declared quarterly and be
paid in arrears on January 31, April 30, July 31 and
October 31 of each year, commencing on __________, 1996
(each a "Distribution Payment Date") to the extent that
Citizens Capital has, on such date, (x) funds (including
Common Stock and to the extent Partnership Preferred
Security Holders have elected or are deemed to have
elected to receive Common Stock) legally available for
the payment of such Distributions and (y) cash and, where
applicable, Common Stock, on hand sufficient to permit
such payments, it being understood that to the extent
that funds (including, where applicable, Common Stock)
are not available to pay in full all accumulated and
unpaid Distributions, Citizens Capital may pay partial
Distributions to the extent of funds (including, where
applicable, Common Stock) legally available therefor.
For purposes of this Section 6.2(b), net
interest and investment income from funds on deposit in
the Eligible Investment Account that is transferred into
the Partnership Distribution Account shall be considered
funds available for the payment of Distributions;
provided, however, that the principal amount of Eligible
Investments shall not be available as Distributions or
otherwise except in connection with a liquidating
distribution pursuant to Section 11.4 of this Agreement.
Distributions will be payable to the Holders as
they appear on the books and records of Citizens Capital
on the Regular Record Date (as such term is defined in
the Indenture) immediately preceding the applicable
Distribution Payment Date. Distributions payable on any
Partnership Preferred Securities that are not punctually
paid on any Distribution Payment Date, as a result of the
Company having failed to make a payment on the
Convertible Debentures, will cease to be payable to the
Person in whose name such Partnership Preferred
Securities are registered on the relevant record date,
and such late Distribution will instead be payable to the
Person in whose name such Partnership Preferred
Securities are registered on the special record date or
other specified date determined in accordance with the
Limited Partnership Agreement. If any date on which
Distributions are payable on the Partnership Preferred
Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the
next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on
the immediately preceding Business Day, in each case with
the same force and effect as if made on such date. In
the event of any extended interest payment period with
respect to the Convertible Debentures resulting in the
deferral of the payment of Distributions on the
Partnership Preferred Securities, the General Partner
shall notify the Holders as to such extended interest
payment period.
(iii) Citizens Capital shall not:
(1) pay, declare or set aside for payment, any
distributions on any other Interests in Citizens
Capital; or
(2) redeem, purchase or otherwise acquire or
make any liquidation payment with respect to any
other Interests in Citizens Capital;
until, in each case, such time as all accumulated and
unpaid Distributions on all of the Partnership Preferred
Securities, including any Additional Distributions
thereon, shall have been paid in full for all
Distribution periods terminating on or prior to the date
of such payment or the date of such redemption, purchase
or acquisition, as the case may be.
(iv) In the event of an election by the Holder
to convert all or any portion of its Partnership
Preferred Securities through the Conversion Agent into
Common Stock pursuant to Section 6.3 of this Agreement,
neither the Company nor Citizens Capital shall make, or
be required to make, any payment, allowance or adjustment
with respect to accumulated and unpaid Distributions on
such Partnership Preferred Securities; provided that
Holders of Partnership Preferred Securities at the close
of business on any record date for the payment of
Distributions will be entitled to receive the
Distribution payable on such Partnership Preferred
Securities on the corresponding Distribution Payment Date
notwithstanding the conversion of such Partnership
Preferred Securities into Common Stock following such
record date.
(c) MANDATORY REDEMPTION. Upon repayment of
the Convertible Debentures at maturity, prepayment or
redemption of the Convertible Debentures, including as a
result of the acceleration of the Convertible Debentures
upon the occurrence of an Event of Default under the
Indenture with respect to the Convertible Debentures, the
proceeds from such repayment, prepayment or redemption
simultaneously shall be applied to redeem the Partnership
Preferred Securities at a redemption price equal to the
liquidation preference per Partnership Preferred Security
plus accumulated and unpaid Distributions (whether or not
earned or declared) to the date fixed for redemption,
including any Additional Distributions accrued thereon,
payable in cash (the "Redemption Price"). Holders will
be given not less than 30 nor more than 60 days' notice
of such redemption.
(d) OPTIONAL REDEMPTION. Partnership
Preferred Securities shall be redeemable at the option of
Citizens Capital (subject to the prior consent of the
Company), in whole or in part from time to time, on or
after __________ __, 1998 at the Redemption Price.
Citizens Capital may not redeem the Partnership Preferred
Securities in part unless all accumulated and unpaid
distributions (whether or not earned or declared),
including any Additional Distributions, have been paid in
full on all Partnership Preferred Securities for all
quarterly distribution periods terminating on or prior to
the date of redemption. The Company shall have the right
to cause Citizens Capital to exercise such redemption
option.
(e) SPECIAL REDEMPTION. If, at any time, a
Partnership Event shall occur and be continuing, the
General Partner may dissolve Citizens Capital and, after
satisfaction of creditors, either (i) upon receipt by the
Company of a No Recognition Opinion with respect to the
Convertible Debentures and delivery of such No
Recognition Opinion to Citizens Capital, cause the
Convertible Debentures held by the General Partner,
having an aggregate stated principal amount equal to the
aggregate stated liquidation preference of, with a
distribution rate identical to the distribution rate of,
and accrued and unpaid distributions equal to accrued and
unpaid distributions on and having the same record date
for payment as the Partnership Preferred Securities, to
be distributed to the holders of the Partnership
Preferred Securities, in liquidation of such holders'
interests in Citizens Capital or (ii) in the event the
Company cannot receive a No Recognition Opinion, at the
direction of the Company, as Debenture Issuer, and
following the redemption, in whole or in part, of the
Convertible Debentures in the manner set forth in the
Indenture redeem, in whole or in part, the Partnership
Preferred Securities in the manner set forth in this
Agreement, provided that the General Partner is unable to
avoid such Partnership Event by taking some ministerial
action such as filing a form or making an election or
pursuing some other reasonable measure that, in the sole
judgment of the General Partner, will have no adverse
effect on Citizens Capital, the General Partner or the
Holders, if any, of the Trust Securities and will involve
no material cost ("Ministerial Action"). In the event
that the General Partner undertakes the actions specified
in item (i) of this paragraph, the Company, as Sponsor,
may dissolve the Trust, if in existence, and thereby
cause the Convertible Debentures to be distributed to the
Holders, if any, of the Trust Securities. In the event
that (a) the Convertible Debentures are distributed in
connection with a Partnership Event and (b) the Company,
as Sponsor of the Trust, causes or has caused the Trust
to be liquidated, the Company will use its best efforts
to have the Convertible Debentures listed on the NYSE or,
if the Trust Securities or the Partnership Preferred
Securities, as the case may be, are not then listed on
the NYSE, such other exchange on which the Trust
Securities or the Partnership Preferred Securities, as
the case may be, may then be listed.
If, at any time, a Company Event shall occur
and be continuing, the Company, as Debenture Issuer, may
cause the redemption, in whole but not in part, of the
Partnership Preferred Securities by redeeming, in whole
but not in part, the Convertible Debentures in the manner
set forth in the Indenture, which redemption shall in
turn cause the redemption of the Partnership Preferred
Securities in the manner set forth in this Agreement,
provided that the Company is unable to avoid such Company
Event by taking a Ministerial Action. In the case of a
Company Event, the Company may also elect to cause the
Convertible Debentures and, hence, the Partnership
Preferred Securities to remain outstanding.
If, at any time, a Trust Event shall occur and
be continuing the Company shall (i) after receipt by the
Company of a No Recognition Opinion with respect to the
Partnership Preferred Securities and delivery of such No
Recognition Opinion to the Trust, dissolve the Trust and,
after satisfaction of creditors, cause the Partnership
Preferred Securities held by the Property Trustee, having
an aggregate stated liquidation preference equal to the
aggregate stated liquidation amount of, with a
distribution rate identical to the distribution rate of,
and accrued and unpaid distributions equal to accrued and
unpaid distributions on and having the same record date
for payment as the Trust Securities, to be distributed to
the holders of the Trust Securities, in liquidation of
such holders' interests in the Trust, in the manner set
forth in the Declaration, or (ii) after receipt by the
Company of No Recognition Opinions with respect to the
Partnership Preferred Securities and the Convertible
Debentures and delivery of the appropriate No Recognition
Opinion to each of the Trust and Citizens Capital, and
following the dissolution of Citizens Capital in the
manner set forth in this Agreement, dissolve the Trust,
and, after satisfaction of creditors, cause the
Convertible Debentures held by the General Partner,
having aggregate stated principal amount equal to the
aggregate stated liquidation amount of, with an interest
payment rate identical to the distribution rate of and
accrued and unpaid interest equal to accrued and unpaid
distributions on and having the same record date for
payment as the Trust Securities, to be distributed to the
holders of the Trust Securities, in liquidation of such
holders' interests in the Trust, in the manner set forth
in the Declaration, or, in the event the Company cannot
receive a No Recognition Opinion with respect to the
Partnership Preferred Securities, the Company may
dissolve the Trust and, after satisfaction of creditors,
at the direction of the Company, as Debenture Issuer, and
following the redemption, in whole or in part, of the
Convertible Debentures in the manner set forth in the
Indenture and the Partnership Preferred Securities in the
manner set forth in this Agreement, redeem, in whole or
in part, the Trust Securities in the manner set forth in
the Declaration; provided that the Company and the Trust
are unable to avoid such Trust Event by taking a
Ministerial Action.
Upon the distribution of the Partnership
Preferred Securities or the Convertible Debentures in
connection with a Trust Event, the Company will use its
best efforts to have such Partnership Preferred
Securities or Convertible Debentures, as the case may be,
listed on the NYSE or, if the Trust Securities or
Partnership Preferred Securities, as the case may be, are
not then listed on the NYSE, such other exchange on which
such Trust Securities or Partnership Preferred Securities
may then be listed.
If, at any time, a Rating Agency Event shall
occur and be continuing the Company shall either (i)
after dissolution of the Trust, if still in existence, in
the manner set forth in the Declaration and after
satisfaction of creditors, cause the Partnership
Preferred Securities having an aggregate liquidation
preference equal to the aggregate liquidation amount of
the Trust Securities to be distributed to the holders of
the Trust Securities in liquidation of the Trust or (ii)
upon dissolution of Citizens Capital as set forth in this
Agreement and after satisfaction of creditors, cause the
Convertible Debentures having an aggregate principal
amount equal to the aggregate liquidation preference of
the Partnership Preferred Securities to be distributed to
the holders of the Partnership Preferred Securities in
liquidation of Citizens Capital. Upon the distribution
of Partnership Preferred Securities or Convertible
Debentures in connection with a Rating Agency Event, the
Company will use its best efforts to have such
Partnership Preferred Securities or Convertible
Debentures listed on the NYSE or, if the Trust Securities
or Partnership Preferred Securities, as the case may be,
are not then listed on the NYSE, such other exchange on
which such Trust Securities or Partnership Preferred
Securities may then be listed.
(f) REDEMPTION PROCEDURES. (i) Notice of any
redemption (a "Notice of Redemption") of the Partnership
Preferred Securities to be redeemed will be given by
Citizens Capital by mail to each Holder of Partnership
Preferred Securities not fewer than 30 nor more than 60
days prior to the date fixed for redemption thereof
following the issuance of a notice of prepayment or
redemption of the Convertible Debentures by Citizens to
Citizens Capital. For purposes of the calculation of the
date of redemption and the dates on which notices are
given pursuant to this paragraph (f)(i), a Notice of
Redemption shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage
prepaid, to each Holder of Partnership Preferred
Securities. Each Notice of Redemption shall be addressed
to each Holder of Partnership Preferred Securities at the
address of the Holder appearing in the books and records
of Citizens Capital. No defect in the Notice of
Redemption or in the mailing thereof with respect to any
Partnership Preferred Security shall affect the validity
of the redemption proceedings with respect to any other
Partnership Preferred Security.
(ii) If, following a notice of prepayment of
all outstanding Convertible Debentures, Citizens Capital
issues a Notice of Redemption, then, by 12:00 noon, New
York time, on the redemption date, Citizens will repay to
Citizens Capital an aggregate principal amount of the
Convertible Debentures, which, together with accrued and
unpaid interest and any Deferred Interest thereon, will
be an amount sufficient to pay the Redemption Price for
all Partnership Preferred Securities then outstanding.
If a Notice of Redemption shall have been issued and
funds deposited as required or a check deposited in the
U.S. mails postage prepaid, then upon the date of such
deposit, all rights of the Partnership Preferred Security
Holders who hold such Partnership Preferred Securities so
called for redemption will cease, except the right of the
Holders of such securities to receive the Redemption
Price, but without interest from and after such
redemption date. In the event that any date fixed for
redemption of Partnership Preferred Securities is not a
Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that,
if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding
Business Day. In the event that payment of the
Redemption Price in respect of Partnership Preferred
Securities is improperly withheld or refused and not paid
either by Citizens Capital or by Citizens pursuant to the
Partnership Guarantee Agreement, Distributions on such
Partnership Preferred Securities (including any
Additional Distributions thereon) will continue to
accumulate at the then applicable rate, from the original
redemption date to the date that the Redemption Price is
actually paid.
(iii) Redemption/Distribution Notices shall be
sent by Citizens Capital to the Holders of the
Partnership Preferred Securities.
(iv) If a Notice of Redemption shall have been
issued, the conversion rights set forth in Section 6.3
shall terminate at the close of business five Business
Days prior to the redemption date.
(g) LIQUIDATION RIGHTS. In the event of any
voluntary or involuntary liquidation, dissolution,
winding-up or termination of Citizens Capital, the
Holders of Partnership Preferred Securities at the time
outstanding will be entitled to receive out of the assets
of Citizens Capital (including any Eligible Investments
or amounts deposited in the Eligible Investment Account)
legally available for distribution to Partners after
satisfaction of liabilities of creditors as required by
the Act before any distribution of assets is made with
respect to any other Interest in Citizens Capital, an
amount equal to the aggregate of the stated liquidation
preference of $50 per Partnership Preferred Security
payable in cash and accumulated and unpaid Distributions
(whether or not earned or declared) to the date of
payment, including any Additional Distributions accrued
thereon (the "Liquidation Distribution") payable in cash
or in Common Stock.
(h) VOTING RIGHTS -- SPECIAL REPRESENTATIVE.
(i) If (x) Citizens Capital fails to pay Distributions
in full on the Partnership Preferred Securities for six
(6) consecutive quarters (other than as a result of a
determination by Citizens to extend the interest payment
period of the Convertible Debentures in accordance with
the terms thereof), (y) an Event of Default under the
Indenture occurs and is continuing or (z) Citizens is in
default on any of its payment obligations under the
Partnership Guarantee Agreement, then the Holders, upon
the affirmative vote of at least a Majority in
Liquidation Preference of the Partnership Preferred
Securities, will be entitled to appoint and authorize a
Special Representative to enforce Citizens Capital's
rights as a creditor under the Convertible Debentures,
enforce the rights of the Holders under the Partnership
Guarantee Agreement and to declare and pay Distributions
(including Additional Distributions) on the Partnership
Preferred Securities. Upon the appointment of a Special
Representative, the Special Representative shall be
authorized, and shall to the extent of legally available
funds, declare and pay Distributions (including
Additional Distributions) on the Partnership Preferred
Securities. So long as the appointment of the Special
Representative is effective, the Special Representative
shall manage the business and affairs of Citizens Capital
to the exclusion of the General Partner.
(ii) In furtherance of the foregoing, and
without limiting the powers of any Special Representative
so appointed and for the avoidance of any doubt
concerning the powers of the Special Representative, any
Special Representative, in its own name and as Special
Representative of Citizens Capital, may institute a
proceeding, including, without limitation, any suit in
equity, an action at law or other judicial or
administrative proceeding, to enforce Citizens Capital's
rights directly against Citizens, or any other obligor in
connection with such obligations on behalf of Citizens
Capital, and may prosecute such proceeding to judgment or
final decree, and enforce the same against Citizens or
any other obligor in connection with such obligations and
collect, out of the property, wherever situated, of
Citizens or any such other obligor upon such obligations,
the monies adjudged or decreed to be payable in the
manner provided by law.
(iii) For purposes of determining whether
Citizens Capital has failed to pay Distributions in full
for six (6) consecutive quarters, Distributions shall be
deemed to remain in arrears, notwithstanding any payments
in respect thereof, until full cumulative Distributions
have been or contemporaneously are declared and paid with
respect to all quarterly Distribution periods terminating
on or prior to the date of payment of such full
cumulative Distributions. Not later than 30 days after
such right to appoint a Special Representative arises,
the General Partner will convene a meeting for election
of a Special Representative. If the General Partner
fails to convene such meeting within such 30-day period,
the Holders of not less than 10% in Liquidation
Preference of the Partnership Preferred Securities will
be entitled to convene such meeting. The provisions of
Section 12.3 relating to the convening and conduct of
meetings of the Partners will apply with respect to any
such meeting. Any Special Representative so appointed
shall vacate office immediately if Citizens Capital (or
Citizens pursuant to the Partnership Guarantee Agreement)
shall have paid in full all accumulated and unpaid
Distributions (including any Additional Distributions) on
the Partnership Preferred Securities or such Event of
Default or default, as the case may be, shall have been
cured.
(i) VOTING RIGHTS -- CERTAIN AMENDMENTS. (i)
If any proposed amendment of this Agreement provides for,
or the General Partner otherwise proposes to effect, (x)
any action that would have a material adverse affect on
the powers, preferences or rights of the Partnership
Preferred Securities, whether by way of amendment of this
Agreement or otherwise or (y) the liquidation,
dissolution, winding-up or termination of Citizens
Capital, then the Holders of outstanding Partnership
Preferred Securities will be entitled to vote on such
amendment or action of the General Partner (but not on
any other amendment or action) and such amendment or
action shall not be effective except with the approval of
Holders of not less than 66-2/3% in Liquidation
Preference of the Partnership Preferred Securities;
provided, however, that no such approval shall be
required if the liquidation, dissolution, winding-up or
termination of Citizens Capital is proposed or initiated
pursuant to Section 11.2 hereof.
(ii) Any required approval of Holders may be
given at a separate meeting of such Holders convened for
such purpose or pursuant to written consent. Citizens
Capital will cause a notice of any meeting at which
Holders are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken,
to be mailed to each Holder. Each such notice will
include a statement setting forth (x) the date of such
meeting or the date by which such action is to be taken,
(y) a description of any matter on which such Holders are
entitled to vote or upon which written consent is sought
and (z) instructions for the delivery of proxies or
consents. No vote or consent of the Holders will be
required for Citizens Capital to redeem and cancel
Partnership Preferred Securities in accordance with this
Agreement.
(iii) Except as provided in this Section 6.2,
Holders shall have no voting rights, and the Holders may
not remove the General Partner.
Section 6.3 CONVERSION RIGHTS OF PARTNERSHIP
PREFERRED SECURITIES. The Holders of Partnership
Preferred Securities shall have the right, at their
option, at any time before the close of business five
days prior to maturity of the Partnership Preferred
Securities or as otherwise set forth in this Agreement,
to cause the Conversion Agent to convert Partnership
Preferred Securities, on behalf of the converting
Holders, into shares of Common Stock in the manner
described herein on and subject to the following terms
and conditions:
(a) The Partnership Preferred Securities will
be convertible at the office of the Conversion Agent into
fully paid and nonassessable shares of Common Stock
pursuant to the Holder's direction to the Conversion
Agent to exchange such Partnership Preferred Securities
for a portion of the Convertible Debentures theretofore
held by Citizens Capital on the basis of one Partnership
Preferred Security per $50 principal amount of
Convertible Debentures, and immediately convert such
amount of Convertible Debentures into fully paid and
nonassessable shares of Common Stock at an initial rate
of shares of Common Stock per $50 principal amount of
Convertible Debentures (which is equivalent to a
conversion price of $____ per share of Common Stock,
subject to certain adjustments set forth in the terms of
the Convertible Debentures (as so adjusted, the
"Conversion Price")).
(b) In order to convert Partnership Preferred
Securities into Common Stock, the Holder shall surrender
the Partnership Preferred Securities to be converted to
the Conversion Agent at the office referred to above,
together with an irrevocable Notice of Conversion (i)
setting forth the number of Partnership Preferred
Securities to be converted and the name or names, if
other than the Holder, in which the shares of Common
Stock should be issued and (ii) directing the Conversion
Agent (a) to exchange such Partnership Preferred
Securities for a portion of the Convertible Debentures
held by Citizens Capital (at the rate of exchange
specified in the preceding paragraph) and (b) to
immediately convert such Convertible Debentures, on
behalf of such Holder, into Common Stock (at the
conversion rate specified in the preceding paragraph).
If the Notice of Conversion is delivered in a timely
manner, the Conversion Agent shall notify Citizens
Capital of the Holder's election to exchange Partnership
Preferred Securities for a portion of the Convertible
Debentures held by Citizens Capital and Citizens Capital
shall, upon receipt of such notice, deliver to the
Conversion Agent the appropriate principal amount of
Convertible Debentures for exchange in accordance with
this Section. The Conversion Agent shall thereupon
notify Citizens of the Holder's election to convert such
Convertible Debentures into shares of Common Stock.
Holders of Partnership Preferred Securities at the close
of business on a Distribution payment record date will be
entitled to receive the Distribution payable on such
securities on the corresponding Distribution Payment Date
notwithstanding the conversion of such Partnership
Preferred Securities following such Distribution payment
record date. Except as provided above, no payment,
allowance or adjustment shall be made by Citizens Capital
or Citizens upon any conversion on account of any
accumulated and unpaid Distributions accrued on the
Partnership Preferred Securities (including any
Additional Distributions accrued thereon) surrendered for
conversion, or on account of any accumulated and unpaid
distributions on the shares of Common Stock issued upon
such conversion. Partnership Preferred Securities shall
be deemed to have been converted immediately prior to the
close of business on the day on which a Notice of
Conversion relating to such Partnership Preferred
Securities is delivered in accordance with the foregoing
provisions (the "Conversion Date"). The Person or
Persons entitled to receive the Common Stock issuable
upon conversion of the Convertible Debentures shall be
treated for all purposes as the record holder or holders
of such Common Stock at such time. No fractional shares
of Common Stock will be issued as a result of conversion,
but in lieu thereof, such fractional interest will be
paid in cash by Citizens. As promptly as practicable on
or after the Conversion Date, Citizens shall issue and
deliver at the office of the Conversion Agent a
certificate or certificates for the number of full shares
of Common Stock issuable upon such conversion, together
with the cash payment, if any, in lieu of any fraction of
any share to the Person or Persons entitled to receive
the same, unless otherwise directed by the Holder in the
notice of conversion and the Conversion Agent shall
distribute such certificate or certificates to such
Person or Persons.
(c) Each Holder of a Partnership Preferred
Security by his acceptance thereof appoints the Transfer
Agent for the Partnership Preferred Securities as
Conversion Agent for the purpose of effecting the
conversion of Partnership Preferred Securities in
accordance with this Section. In effecting the
conversion transactions described in this Section, the
Conversion Agent shall be acting as agent of the Holders
of Partnership Preferred Securities directing it to
effect such conversion or exchange transactions. The
Conversion Agent is hereby authorized (i) to exchange
Partnership Preferred Securities from time to time for
Convertible Debentures held by Citizens Capital in
connection with the conversion of such Partnership
Preferred Securities in accordance with this Section
hereof, and (ii) to convert all or a portion of the
Convertible Debentures into Common Stock and thereupon to
deliver such shares of Common Stock in accordance with
the provisions of this Section and to deliver to Citizens
Capital a new Convertible Debenture or Convertible
Debentures for any resulting unconverted principal
amount.
(d) No fractional shares of Common Stock will
be issued as a result of conversion, but in lieu thereof,
such fractional interest will be paid in cash by Citizens
to Citizens Capital, which in turn will make such payment
to the Holder or Holders of Partnership Preferred
Securities so converted.
(e) Citizens shall at all times reserve and
keep available out of its authorized and unissued Common
Stock, solely for issuance upon the conversion of the
Convertible Debentures, free from any preemptive or other
similar rights, such number of shares of Common Stock as
shall from time to time be issuable upon the conversion
of all the Convertible Debentures then outstanding.
Notwithstanding the foregoing, Citizens shall be entitled
to deliver upon conversion of Convertible Debentures,
shares of Common Stock reacquired and held in the
treasury of Citizens (in lieu of the issuance of
authorized and unissued shares of Common Stock), so long
as any such treasury shares, upon delivery, are free and
clear of all liens, charges, security interests or
encumbrances. Any shares of Common Stock issued upon
conversion of the Convertible Debentures shall be duly
authorized, validly issued and fully paid and
nonassessable. Citizens Capital shall deliver the shares
of Common Stock received upon conversion of the
Convertible Debentures to the converting Holder free and
clear of all liens, charges, security interests and
encumbrances, except for United States withholding taxes.
Each of Citizens and Citizens Capital shall prepare and
shall use its best efforts to obtain and keep in force
such governmental or regulatory permits or other
authorizations as may be required by law, and shall
comply with all applicable requirements as to
registration or qualification of the Common Stock (and
all requirements to list the Common Stock issuable upon
conversion of Convertible Debentures that are at the time
applicable), in order to enable Citizens to lawfully
issue Common Stock to Citizens Capital upon conversion of
the Convertible Debentures and Citizens Capital to
lawfully deliver the Common Stock to each Holder upon
conversion of the Partnership Preferred Securities.
(f) Citizens will pay any and all taxes that
may be payable in respect of the issue or delivery of
shares of Common Stock on conversion of Convertible
Debentures and the delivery of the shares of Common Stock
by Citizens Capital upon conversion of the Partnership
Preferred Securities. Citizens shall not, however, be
required to pay any tax which may be payable in respect
of any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that in which
the Partnership Preferred Securities so converted were
registered, and no such issue or delivery shall be made
unless and until the person requesting such issue has
paid to Citizens Capital the amount of any such tax, or
has established to the satisfaction of Citizens Capital
that such tax has been paid.
(g) Nothing in Section 6.3(f) shall limit the
requirement of Citizens Capital to withhold taxes
pursuant to Section 4.5 or otherwise require the General
Partner or Citizens Capital to pay any amounts on account
of such withholdings.
Section 6.4 DISTRIBUTION ELECTION.
(a) DECLARATION BY COMPANY. For so long as
Citizens Capital shall hold the Convertible Debentures,
the Company shall have by the Distribution Declaration
Date immediately preceding a Distribution Payment Date
declared by Distribution Declaration Notice the form of
payment in which it intends to pay the interest on the
Convertible Debentures held by the Citizens Capital. If
the Company shall have by the Distribution Declaration
Date in respect of a Distribution Payment Date, declared
to pay interest on the Convertible Debentures in the form
of cash, the holders of the Partnership Preferred
Securities will receive payments of distributions from
Citizens Capital only in the form of cash,
notwithstanding any election by the holder to the
contrary. If the Company shall have by the Distribution
Declaration Date declared to pay interest on the
Convertible Debentures in the form of shares of Common
Stock, the holders of the Partnership Preferred
Securities may receive distributions on the Partnership
Preferred Securities in the form of cash or shares of
Common Stock subject to the provision of this Section
6.4. If the Company fails to make a timely declaration,
the Company shall be deemed to have elected to pay
interest in the form of shares of Common Stock.
(b) ELECTION BY HOLDER. Distributions on the
Partnership Preferred Securities may be payable in cash
or an Equivalent Value of shares of Common Stock as set
forth in this Section 6.4. Subject to Sections 6.4(a)
and 6.4(d), each Holder may during an Election Period
elect to receive Distributions for the next four
Distribution Payment Dates in either (a) an Equivalent
Value of shares of Common Stock (a "Stock Distribution
Election") or (b) cash (a "Cash Distribution Election"),
in each case by submitting to the Election Agent a notice
of distribution election substantially in the form of
Annex B ("Notice of Distribution Election"); provided
however, that so long as the Property Trustee of the
Trust or a Clearing Agency is the Holder of the
Partnership Preferred Securities, the Holder may elect to
receive Distributions in a combination of cash and Common
Stock by specifying the aggregate number of the
Partnership Preferred Securities for each respective form
of payment. The Notice of Distribution Election shall
specify the form of payment (or, if the Property Trustee
or Clearing Agency is the Holder of the Partnership
Preferred Securities, the aggregate amount for each
respective form of payment) in which the Holder elects to
receive Distributions. If a Holder fails to submit a
Notice of Distribution Election during the Election
Period, the Holder shall be deemed to have elected to
receive distributions in the form of cash. If a Holder
transfers any or all Partnership Preferred Securities in
such Holder's possession, the subsequent Holder(s) of
such transferred Partnership Preferred Securities shall
be deemed to have made a Cash Distribution Election for
the remaining Distribution Payment Dates prior to the
next Election Period for which such subsequent Holder(s)
appear as the Holder(s) of record.
(c) COMMON STOCK ELECTION BY COMPANY. If the
Company has (or is deemed to have) elected to pay
interest on the Convertible Debentures in the form of
shares of Common Stock, Citizens Capital shall take such
actions and pay Distributions on Partnership Preferred
Securities in accordance with this Section 6.4(c). On
the Share Transfer and Valuation Date, the Company shall
issue and deliver to the office of the Paying Agent such
certificate or certificates of shares of Common Stock
representing Equivalent Value of Common Stock (or in the
names of such Persons as the Paying Agent shall so
designate to the Company) to satisfy in full the
obligation of the Company to pay interest on the
Convertible Debentures for the applicable Interest
Payment Date. No fractional shares of Common Stock will
be issued as a result of the Company's election to pay
interest on the Convertible Debentures in Common Stock,
but in lieu thereof, such fractional interest will be
paid to Citizens Capital in cash by the Company. No
fractional shares of Common Stock will be issued as a
result of the Holder's election to receive payments of
Distribution in the form of Common Stock, but in lieu
thereof such fractional interests will be paid for in
cash by Citizens Capital to the Partnership Preferred
Security Holders.
(i) To the extent Holders have elected to
receive payment of Distributions in
shares of Common Stock, the Paying Agent
shall distribute Equivalent Value of
Common Stock equal to the amount of such
Distribution, together with the cash
payment, if any, in lieu of any
fractional share of Common Stock to such
Partnership Preferred Security Holders
at the address specified on the register
of Citizens Capital. If, on any
Interest Payment Date, the Trust or a
Clearing Agency is the holder of record
of all or substantially all the
Partnership Preferred Securities, then
in determining the amount of cash to
deliver in lieu of fractional shares of
Common Stock, the beneficial holders of
the Trust Securities shall each be
treated as if it were a holder of record
of its proportionate share of the
Partnership Preferred Securities rather
than the Trust itself.
(ii) To the extent Holders have elected to
receive payment of Distributions in
cash, Citizens Capital shall sell in
accordance with applicable law such
number of shares of Common Stock held by
Citizens Capital in the open market
through designated brokers or sell
shares of Common Stock back to the
Company to generate cash in a dollar
amount equal to the amount (the "Cash
Equivalent Amount") necessary to pay all
Holders that elect to receive cash
Distributions (or, if the Property
Trustee or a Clearing Agency is the
Holder of the Partnership Preferred
Securities, wholly or partially in
cash). If the sales proceeds after the
payment of expenses, if any, relating to
such sales (the "Maximum Stock Sales
Proceeds") from the sale of all shares
of Common Stock held by Citizens Capital
for a Distribution Payment Date is less
than the Cash Equivalent Amount, the
General Partner shall be liable for and
shall promptly pay to Citizens Capital
the amount (the "Shortfall Amount")
equal to the difference between the Cash
Equivalent Amount and the Maximum Stock
Sales Proceeds.
(iii) To the extent there are any shares of
Common Stock or any cash remaining
(collectively "Excess Property") after
satisfying the obligations of the
holders of the Partnership Preferred
Securities in respect of any
Distribution Payment Date, such Excess
Property shall belong to, be allocated
to and inure to the sole benefit of the
General Partner.
(d) ELECTION BY THE COMPANY. Notwithstanding
the foregoing sections, Citizens has the right (the
"Company Cash Option") on and after the Distribution
Declaration Date but before the Cash Interest Payment
Date (as such term is defined in the Indenture) to cause
all Holders of Partnership Preferred Securities to
receive payment of Distributions in the form of cash by
paying interest on the Convertible Debentures in cash.
The Company may exercise the Company Cash Option if the
Company shall have provided written notice to the Trust
and the holders of the Trust Securities (a "Cash Payment
Notice").
(e) CALL OPTION ON COMMON STOCK. On or after
the Share Transfer and Valuation Date, the Company may
cause Citizens Capital or some or all the holders of
Partnership Preferred Securities to receive Distributions
in the form of cash by purchasing from Citizens Capital
shares of Common Stock, distributed by the Company as
interest payment on the Convertible Debentures, that have
not yet been sold for cash or distributed to the holders
of the Partnership Preferred Securities at a price equal
to the Equivalent Value (the "Company Call Option"). The
Company may exercise the Company Call Option if the
Company shall have provided a Cash Payment Notice.
ARTICLE VII
BOOKS OF ACCOUNT, RECORDS AND REPORTS
Section 7.1 BOOKS AND RECORDS.
(a) Proper and complete records and books of
account of Citizens Capital shall be kept by the General
Partner in which shall be entered fully and accurately
all transactions and other matters relative to Citizens
Capital's businesses as are usually entered into records
and books of account maintained by Persons engaged in
businesses of a like character, including a Capital
Account for each Partner. The books and records of
Citizens Capital, together with a certified copy of this
Agreement and of the Certificate, shall at all times be
maintained at the principal office of the General Partner
and shall be open to the inspection and examination of
the Partners or their duly authorized representatives for
a proper purpose during reasonable business hours.
(b) The General Partner may, for such period
of time that the General Partner deems reasonable, keep
confidential from the Partners any information with
respect to Citizens Capital the disclosure of which the
General Partner reasonably believes is not in the best
interests of Citizens Capital or is adverse to the
interests of Citizens Capital or which Citizens Capital
or the General Partner is required by law or by an
agreement with any Person to keep confidential.
(c) Within one month after the close of each
Fiscal Year, the General Partner shall transmit to each
Partner, a statement indicating such Partner's share of
each item of Partnership income, gain, loss, deduction or
credit for such Fiscal Year for federal income tax
purposes.
Section 7.2 ACCOUNTING METHOD. For both
financial and tax reporting purposes and for purposes of
determining profits and losses, the books and records of
Citizens Capital shall be kept on the accrual method of
accounting applied in a consistent manner and shall
reflect all Partnership transactions and be appropriate
and adequate for Citizens Capital's business.
Section 7.3 ANNUAL AUDIT. As soon as
practical after the end of each Fiscal Year, but not
later than 90 days after such end, the financial
statements of Citizens Capital shall be audited by a firm
of independent certified public accountants selected by
the General Partner, and such financial statements shall
be accompanied by a report of such accountants containing
their opinion. The cost of such audits will be an
expense of Citizens Capital and paid by Citizens.
ARTICLE VIII
POWERS, RIGHTS AND DUTIES
OF THE LIMITED PARTNERS
Section 8.1 LIMITATIONS. Other than as set
forth in this Agreement, the Limited Partners shall not
participate in the management or control of Citizens
Capital's business, property or other assets nor shall
the Limited Partners transact any business for Citizens
Capital, nor shall the Limited Partners have the power to
act for or bind Citizens Capital, said powers being
vested solely and exclusively in the General Partner
(and, upon appointment, the Special Representative).
Except for shares of Common Stock deliverable upon
conversion or exchange of the Partnership Preferred
Securities, the Limited Partners shall have no interest
in the properties, or assets of the General Partner, or
any equity therein, or in any proceeds of any sales
thereof (which sales shall not be restricted in any
respect, by virtue of acquiring or owning an Interest in
Citizens Capital).
Section 8.2 LIABILITY. Subject to the
provisions of the Act, no Limited Partner shall be liable
for the repayment, satisfaction or discharge of any debts
or other obligations of Citizens Capital in excess of the
Capital Account balance of such Limited Partner.
Section 8.3 PRIORITY. No Limited Partner
shall have priority over any other Limited Partner as to
Partnership allocations or distributions.
ARTICLE IX
POWERS, RIGHTS AND DUTIES
OF THE GENERAL PARTNER
Section 9.1 AUTHORITY. Subject to the
limitations provided in this Agreement, the General
Partner or, upon appointment pursuant to Section 6.2(h),
the Special Representative, shall have exclusive and
complete authority and discretion to manage the
operations and affairs of Citizens Capital and to make
all decisions regarding the business of Citizens Capital.
Any action taken by the General Partner or, upon
appointment pursuant to Section 6.2(h), the Special
Representative, shall constitute the act of and serve to
bind Citizens Capital. In dealing with the General
Partner or, upon appointment pursuant to Section 6.2(h),
the Special Representative, acting on behalf of Citizens
Capital no Person shall be required to inquire into the
authority of the General Partner or, upon appointment
pursuant to Section 6.2(h), the Special Representative,
to bind Citizens Capital. Persons dealing with Citizens
Capital are entitled to rely conclusively on the power
and authority of the General Partner or, upon appointment
pursuant to Section 6.2(h), the Special Representative,
as set forth in this Agreement.
Section 9.2 POWER AND DUTIES OF GENERAL
PARTNER. Except as otherwise specifically provided
herein, the General Partner (or, upon appointment
pursuant to Section 6.2(h), the Special Representative),
shall have all rights and powers of a general partner
under the Act, and shall have all authority, rights and
powers in the management of Citizens Capital business to
do any and all other acts and things necessary, proper,
convenient or advisable to effectuate the purposes of
this Agreement, including by way of illustration but not
by way of limitation, the following:
(a) to secure the necessary goods and services
required in performing the General Partner's duties
for Citizens Capital;
(b) to exercise all powers of Citizens
Capital, on behalf of Citizens Capital, in
connection with enforcing Citizens Capital's rights
under the Convertible Debentures and the Partnership
Guarantee Agreement;
(c) to issue Partnership Preferred Securities
and to admit Limited Partners in connection
therewith in accordance with this Agreement;
(d) to act as registrar and transfer agent for
the Partnership Preferred Securities or designate an
entity to act as registrar and transfer agent;
(e) to establish a record date with respect to
all actions to be taken hereunder that require a
record date be established, including with respect
to Distributions and voting rights and to make
determinations as to the payment of Distributions,
and make or cause to be made all other required
payments to Holders and to the General Partner;
(f) to open, maintain and close bank accounts
and to draw checks and other orders for the payment
of money;
(g) to bring or defend, pay, collect,
compromise, arbitrate, resort to legal action, or
otherwise adjust claims or demands of or against
Citizens Capital;
(h) to deposit, withdraw, invest, pay, retain
and distribute Citizens Capital's funds in a manner
consistent with the provisions of this Agreement;
(i) to take all action which may be necessary
or appropriate for the preservation and the
continuation of Citizens Capital's valid existence,
rights, franchises and privileges as a limited
partnership under the laws of the State of Delaware
and of each other jurisdiction in which such
existence is necessary to protect the limited
liability of the Limited Partner or to enable
Citizens Capital to conduct the business in which it
is engaged;
(j) to cause Citizens Capital to enter into
and perform, on behalf of Citizens Capital, the
Underwriting Agreement and to cause Citizens Capital
to purchase the Convertible Debentures without any
further act, vote or approval of any Partner; and
(k) to execute and deliver any and all
documents or instruments, perform all duties and
powers and do all things for and on behalf of
Citizens Capital in all matters necessary or
desirable or incidental to the foregoing.
Section 9.3 OBLIGATIONS AND EXPENSES PAYABLE
BY GENERAL PARTNER. (a) The General Partner hereby
assumes and shall be liable for the debts, obligations
and liabilities of the Partnership, including any
liabilities arising under the Securities Act of 1933 and
Securities Exchange Act of 1934, and agrees to pay to
each Person to whom Citizens Capital is now or hereafter
becomes indebted or liable, the "Beneficiaries," whether
such indebtedness, obligations or liabilities arise in
contract, tort or otherwise, (including, without
limitation, payment obligations arising under Sections
7.3 of this Agreement, but excluding payment obligations
of the Company to Holders of the Partnership Preferred
Securities in such Holders' capacities as Holders of such
Partnership Preferred Securities, such obligations being
separately guaranteed under the Partnership Guarantee
Agreement) the full payment of such indebtedness and any
and all liabilities, when and as due. This Agreement is
intended to be for the benefit of and to be enforceable
by all such Beneficiaries whether or not such
Beneficiaries have received notice hereof.
(b) The General Partner agrees to pay for
and be responsible for:
(i) all costs and expenses relating to
the sale of shares of the Citizens Utility Common Stock
received as interest payments on the Convertible
Debentures (including brokerage, transfer and custodial
fees);
(ii) all costs and expenses of Citizens
Capital (including, but not limited to, costs and
expenses relating to the organization of Citizens
Capital, the offering, sale and issuance of Partnership
Preferred Securities, the costs and expenses relating to
the operation of Citizens Capital, including without
limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting
equipment, paying agent(s), registrar(s), transfer
agents), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses
incurred in connection with the acquisition, financing,
and disposition of Partnership assets); and
(iii) any and all taxes (other than
United States withholding taxes attributable to Citizens
Capital or its assets) and all liabilities, costs and
expenses with respect to such taxes of Citizens Capital.
Section 9.4 LIABILITY. Except as expressly
set forth in this Agreement or in the Guarantee
Agreements, (a) the General Partner shall not be
personally liable for the return of any portion of the
capital contributions (or any return thereon) of the
Limited Partners; (b) the return of such capital
contributions (or any return thereon) shall be made
solely from assets of Citizens Capital; and (c) the
General Partner shall not be required to pay to Citizens
Capital or to any Limited Partner any deficit in any
Limited Partner's Capital Account upon dissolution or
otherwise. Other than as expressly provided in this
Agreement or under the Act, no Limited Partner shall have
the right to demand or receive property other than cash
for its respective Interest in Citizens Capital.
Otherwise, the General Partner shall be liable to an
unlimited extent for the debts and other obligations of
Citizens Capital.
Section 9.5 INVESTMENT COMPANY OR TAX ACTIONS.
The General Partner is authorized and directed to conduct
its affairs and to operate Citizens Capital in such a way
that Citizens Capital would not be deemed to be an
"investment company" required to be registered under the
Investment Company Act of 1940 (the "1940 Act") or
classified as an association taxable as a corporation for
federal income tax purposes and so that the Convertible
Debentures will be treated as indebtedness of Citizens
for federal income tax purposes. In this connection, the
General Partner is authorized to take any action not
inconsistent with applicable law or this Agreement, and
that does not materially and adversely affect the
interests of Holders, that the General Partner determines
in its discretion to be necessary or desirable for such
purposes.
Section 9.6 OUTSIDE BUSINESSES. Any Partner
or Affiliate thereof may engage in or possess an interest
in other business ventures of any nature or description,
independently or with others, similar or dissimilar to
the business of Citizens Capital, and Citizens Capital
and the Partners shall have no rights by virtue of this
Agreement in and to such independent ventures or the
income or profits derived therefrom and the pursuit of
any such venture, even if competitive with the business
of Citizens Capital, shall not be deemed wrongful or
improper. No Partner or Affiliate thereof shall be
obligated to present any particular investment
opportunity to Citizens Capital even if such opportunity
is of a character that, if presented to Citizens Capital,
could be taken by Citizens Capital, and any Partner or
Affiliate thereof shall have the right to take for its
own account (individually or as a partner or fiduciary)
or to recommend to others any such particular investment
opportunity.
Section 9.7 LIMITS ON GENERAL PARTNER'S
POWERS. (a) Anything in this Agreement to the contrary
notwithstanding, the General Partner (or, upon
appointment pursuant to Section 6.2(h), the Special
Representative) shall not cause or permit Citizens
Capital to:
(i) acquire any assets other than as
expressly provided herein;
(ii) do any act which would make it
impractical or impossible to carry on the ordinary
business of Citizens Capital;
(iii) possess Partnership property for
other than a Partnership purpose;
(iv) admit a Person as a Partner,
except as expressly provided in this Agreement;
(v) make any loans to the General
Partner or its Affiliates, other than loans
represented by the Convertible Debentures;
(vi) perform any act that would subject
any Limited Partner to liability as a general
partner in any jurisdiction;
(vii) engage in any activity that is
not consistent with the purposes of Citizens
Capital, as set forth in Section 2.3;
(viii) without the written consent of
66-2/3% in Liquidation Preference of the Partnership
Preferred Securities have an order for relief
entered with respect to Citizens Capital or commence
a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for
relief in an involuntary case under any such law, or
consent to the appointment of or taking possession
by a receiver, trustee or other custodian for all or
a substantial part of Citizens Capital's property,
or make any assignment for the benefit of creditors
of Citizens Capital; or
(ix) borrow money or become liable for
the borrowings of any third party or to engage in
any financial or others trade or business.
(b) So long as the Convertible Debentures are
held by Citizens Capital, the General Partner shall not:
(i) direct the time, method and place
of conducting any proceeding for any remedy
available to the Special Representative, or
exercising any trust or power conferred on the
Special Representative with respect to the
Convertible Debentures,
(ii) waive any past default which is
waivable under the Convertible Debentures,
(iii) exercise any right to rescind or
annul a declaration that the principal of all the
Convertible Debentures shall be due and payable,
(iv) consent to any amendment,
modification or termination of the Convertible
Debentures or of the Indenture without, in each
case, obtaining the prior approval of the Holders of
not less than 66-2/3% in Liquidation Preference of
the Partnership Preferred Securities; provided,
however, that where a consent under the Convertible
Debentures would require the consent of each holder
of Convertible Debentures affected thereby, no such
consent shall be given by the General Partner
without the prior consent of each Holder of
Partnership Preferred Securities.
(c) The General Partner shall not revoke any
action previously authorized or approved by the Special
Representative or by a vote of Holders without the
approval of the Holders of not less than 66-2/3% in
Liquidation Preference of the Partnership Preferred
Securities. The General Partner shall notify all Holders
of any notice of default received from the Indenture
Trustee with respect to the Convertible Debentures.
Section 9.8 TAX MATTERS PARTNER.
(a) For purposes of Code Section 6231(a)(7),
the "Tax Matters Partner" shall be the General Partner as
long as it remains the general partner of Citizens
Capital. The Tax Matters Partner shall keep the Limited
Partners fully informed of any inquiry, examination or
proceeding.
(b) The General Partner shall not make an
election in accordance with Section 754 of the Code.
(c) The General Partner and the Partnership
Preferred Security Holders acknowledge that they intend,
for U.S. federal income tax purposes, that Citizens
Capital shall be treated as a partnership and that the
General Partner and the Partnership Preferred Security
Holders shall be treated as Partners of such Partnership
for such purposes.
(d) The General Partner shall retain, at the
expense of Citizens Capital and at its sole discretion, a
nationally recognized firm of certified public
accountants which shall prepare all federal, state, local
or other tax returns (including information returns) of
Citizens Capital, as required by law, and the Schedule K-
1's or any successor or similar forms or schedules
required by law.
Section 9.9 CONSOLIDATION, MERGER OR SALE OF
ASSETS.
(a) Citizens may not merge or consolidate with
or into another entity or permit another entity to merge
or consolidate with or into, or be replaced by, or sell,
transfer or lease all or substantially all of its assets
to another entity (each such event, a "Transaction")
unless (i) at the time of such Transaction, no Event of
Default (as defined in the Fiscal Agency Agreement) shall
have occurred and be continuing, or would occur as a
result of such Transaction, (ii) the survivor of such
merger or consolidation or the entity to which Citizens'
assets are sold, transferred or leased is an entity
organized under the laws of the United States or any
state thereof, such entity becomes a party to this
Agreement and becomes the General Partner, assumes all of
Citizens' obligations under this Agreement, and has a net
worth equal to at least 10% of the total capital
contributions made by the Partners to Citizens Capital,
and (iii) prior to such Transaction, Citizens obtains an
opinion of nationally recognized independent counsel
experienced in such matters to the effect that Citizens
Capital will continue to be taxable as a partnership for
federal income tax purposes after such Transaction and
(iv) in the case of any sale, transfer or lease of all or
substantially all of Citizens' assets that includes
Citizens' Interest in Citizens Capital, Citizens has
obtained the consent of the Holders of not less than 66-
2/3% in Liquidation Preference of the Partnership
Preferred Securities to the sale, transfer or lease of
its Interest in Citizens Capital.
(b) In addition, Citizens shall not cause or
allow Citizens Capital to enter into a Transaction,
except as described below and as permitted or required
under Section 11.3 of this Agreement. Citizens Capital
may, for purposes of changing its state of domicile in
order to avoid 1940 Act consequences adverse to Citizens,
itself or the Holders, merge or without the consent of
the Holders, merge or consolidate with or into, or be
replaced by, a limited partnership or trust organized as
such under the laws of any state of the United States of
America; provided, that (i) such successor entity either
(x) expressly assumes all of the obligations of Citizens
Capital under the Partnership Preferred Securities or (y)
substitutes for the Partnership Preferred Securities
other securities having substantially the same terms as
the Partnership Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank,
with respect to participation in the profits or assets of
the successor entity, at least as high as the Partnership
Preferred Securities rank, with respect to participation
in the profits or assets of Citizens Capital, (ii)
Citizens expressly acknowledges such successor entity as
the holder of the Convertible Debentures, (iii) only if
the Trust is liquidated and the Partnership Preferred
Securities have been listed on a national securities
exchange or other organization, such Transaction does not
cause the Partnership Preferred Securities (or the
Successor Securities) to be delisted by any national
securities exchange or other organization on which the
Partnership Preferred Securities are then listed, (iv)
only if the Trust is liquidated and Partnership Preferred
Securities are distributed to holders of Trust
Securities, such Transaction does not cause the
Partnership Preferred Securities (or the Successor
Securities) to be downgraded by any nationally recognized
statistical rating organization, as that term is defined
by the Securities and Exchange Commission for purposes of
Rule 436(g)(2) under the Securities Act, (v) such
Transaction does not adversely affect the powers,
preferences and other special rights of Holders of
Partnership Preferred Securities (including Successor
Securities) in any material respect (other than with
respect to any dilution of the holders' interest in the
new entity), (vi) prior to such Transaction the Company
has received an opinion of nationally recognized
independent counsel to Citizens Capital experienced in
such matters to the effect that (x) such successor entity
will be treated as a partnership for federal income tax
purposes, (y) following such Transaction, Citizens and
such successor entity will be in compliance with the 1940
Act without registering thereunder as an investment
company, and (z) such Transaction will not adversely
affect the limited liability of the Holders.
ARTICLE X
TRANSFERS OF INTERESTS BY PARTNERS
Section 10.1 TRANSFER OF INTERESTS.
(a) Partnership Preferred Securities shall be
freely transferable by a Holder.
(b) Except as provided in the next sentence,
the General Partner may not assign or transfer its
Interest in Citizens Capital in whole or in part unless,
prior to such assignment or transfer, the General Partner
has obtained the consent of the Holders of not less than
66-2/3% in Liquidation Preference of the Partnership
Preferred Securities. The General Partner may assign or
transfer its interest in Citizens Capital without such
consent only to an entity that is the survivor of a
merger or consolidation of the General Partner in a
transaction that meets the requirements of Section 9.9(a)
and only if prior to such assignment or transfer the
Company has received an opinion of nationally recognized
independent tax counsel to Citizens Capital experienced
in such matters to the effect that after such assignment
or transfer Citizens Capital will continue to be treated
as a partnership for U.S. federal income tax purposes.
"Permitted Successor" shall mean an entity that is an
assignee or transferee of the Interest of the General
Partner as permitted by this Section 10.1(b).
(c) Except as provided above, no Interest
shall be transferred, in whole or in part, except in
accordance with the terms and conditions set forth in
this Agreement. Any transfer or purported transfer of
any Interest not made in accordance with this Agreement
shall be null and void.
Section 10.2 TRANSFER OF LP CERTIFICATES. The
General Partner shall provide for the registration of LP
Certificates and of transfers of LP Certificates. Upon
surrender for registration of transfer of any LP
Certificate, the General Partner shall cause one or more
new LP Certificates to be issued in the name of the
designated transferee or transferees. Every LP
Certificate surrendered for registration of transfer
shall be accompanied by a written instrument of transfer
in form satisfactory to the General Partner duly executed
by the Partnership Preferred Security Holder or his or
her attorney duly authorized in writing. Each LP
Certificate surrendered for registration of transfer
shall be cancelled by the General Partner. A transferee
of an LP Certificate shall be admitted to Citizens
Capital as a Limited Partner and shall be entitled to the
rights and subject to the obligations of a Partnership
Preferred Security Holder hereunder upon the receipt by a
transferee of an LP Certificate.
Section 10.3 PERSONS DEEMED PARTNERSHIP
PREFERRED SECURITY HOLDERS. Citizens Capital may treat
the Person in whose name any LP Certificate shall be
registered on the books and records of Citizens Capital
as the sole holder of such LP Certificate and of the
Partnership Preferred Securities represented by such LP
Certificate for purposes of receiving Distributions and
for all other purposes whatsoever (including without
limitation, tax returns and information reports) and,
accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such LP
Certificate or in the Partnership Preferred Securities
represented by such LP Certificate on the part of any
other Person, whether or not Citizens Capital shall have
actual or other notice thereof.
Section 10.4 BOOK ENTRY PROVISIONS.
(a) General. The provisions of this Section
10.4 shall apply only in the event that the Partnership
Preferred Securities are distributed to the holders of
Trust Securities. The LP Certificates, on original
issuance, will be issued in the form of a global LP
Certificate or LP Certificates representing the Book-
Entry Interests, to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Partnership.
Such LP Certificate or LP Certificates shall initially be
registered on the books and records of the Partnership in
the name of Cede & Co., the nominee of DTC, and no
Partnership Preferred Security Owner will receive a
definitive LP Certificate representing such Partnership
Preferred Security Owner's interests in such LP
Certificate, except as provided in Section 10.6. Unless
and until definitive, fully registered LP Certificates
(the "Definitive LP Certificates") have been issued to
the Partnership Preferred Security Owners pursuant to
Section 10.6:
(i) The provisions of this Section shall be in
full force and effect;
(ii) The Partnership, the General Partner and
any Special Representative shall be entitled to deal
with the Clearing Agency for all purposes of this
Agreement (including the payment of Distributions,
Redemption Price and liquidation proceeds on the LP
Certificates and receiving approvals, votes or
consents hereunder) as the Partnership Preferred
Security Holder and the sole holder of the LP
Certificates and shall have no obligation to the
Partnership Preferred Security Owner; and
(iii) None of the Partnership, the General
Partner, any Special Representative or any agent of
the General Partner, the Partnership or any Special
Representative shall have any liability with respect
to or responsibility for the records of the Clearing
Agency.
(b) NOTICES TO CLEARING AGENCY. Whenever a
notice or other communication to the Partnership
Preferred Security Holders is required under this
Agreement, unless and until Definitive LP Certificates
shall have been issued to the Partnership Preferred
Security Owners pursuant to Section 10.6, the General
Partner and any Special Representative shall give all
such notices and communications specified herein to be
given to the Partnership Preferred Security Holders to
the Clearing Agency, and shall have no obligations to the
Partnership Preferred Security Owners.
(c) DEFINITIVE LP CERTIFICATES. If (i) the
Clearing Agency elects to discontinue its services as
securities depository, (ii) the Partnership elects to
terminate the book-entry system through the Clearing
Agency, or (iii) there is an Event of Default under the
Convertible Debentures, then Definitive LP Certificates
shall be prepared by the Partnership. Upon surrender of
the global LP Certificate or LP Certificates representing
the Book-Entry Interests by the Clearing Agency,
accompanied by registration instructions, the General
Partner shall cause Definitive LP Certificates to be
delivered to Partnership Preferred Security Owners in
accordance with the instructions of the Clearing Agency.
Neither the General Partner nor the Partnership shall be
liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in
relying on, such instructions. Any Person receiving a
Definitive LP Certificate in accordance with this Article
X shall be admitted to the Partnership as a Limited
Partner upon receipt of such Definitive LP Certificate
and shall be registered on the books and records of the
Partnership as a Partnership Preferred Security Holder.
The Definitive LP Certificates shall be printed,
lithographed or engraved or may be produced in any other
manner as may be required by any national securities
exchange on which the Partnership Preferred Securities
may be listed and is reasonably acceptable to the General
Partner, as evidenced by its execution thereof.
Section 10.5 REGISTRAR, PAYING AGENT AND
CONVERSION AGENT. Citizens Capital shall maintain in the
Borough of Manhattan, City of New York, State of New York
(i) an office or agency where Partnership Preferred
Securities may be presented for registration of transfer
or for exchange ("Registrar"), (ii) an office or agency
where Partnership Preferred Securities may be presented
for payment ("Paying Agent") and an office or agency
where Partnership Preferred Securities may be presented
for conversion ("Conversion Agent"). The Registrar shall
keep a register of the Partnership Preferred Securities
and of their transfer and exchange. Citizens Capital may
appoint the Registrar, the Paying Agent and the
Conversion Agent and may appoint one or more co-
registrars, one or more additional paying agents and one
or more additional conversion agents in such other
locations as it shall determine. The term "Paying Agent"
includes any additional paying agent and the term
"Conversion Agent" includes any additional conversion
agent. Citizens Capital may change any Paying Agent,
Registrar, co-registrar or Conversion Agent without prior
notice to any Holder. If Citizens Capital fails to
appoint or maintain another entity as Registrar, Paying
Agent or Conversion Agent, the General Partner shall act
as such. Citizens Capital or any of its Affiliates may
act as Paying Agent, Registrar, or Conversion Agent.
Citizens Capital initially appoints Chemical
Bank as Registrar, Paying Agent and Conversion Agent for
the Partnership Preferred Securities.
ARTICLE XI
WITHDRAWAL, DISSOLUTION;
LIQUIDATION AND DISTRIBUTION OF ASSETS
Section 11.1 WITHDRAWAL OF PARTNERS. The
General Partner shall not at any time retire or withdraw
from Citizens Capital except as otherwise permitted
hereunder. If the General Partner retires or withdraws
in contravention of this Section 11.1, it shall
indemnify, defend and hold harmless Citizens Capital and
the other Partners from and against any losses, expenses,
judgments, fines, settlements or damages suffered or
incurred by Citizens Capital or such other Partners
arising out of or resulting from such retirement or
withdrawal.
Section 11.2 DISSOLUTION OF CITIZENS CAPITAL.
(a) Citizens Capital shall not be dissolved by
the admission of Partners in accordance with the terms of
this Agreement. Except as provided in Section
11.2(b)(ii), the death, retirement, resignation,
expulsion, bankruptcy or dissolution of a Partner, or the
occurrence of any other event which terminates the
Interest of a Partner in Citizens Capital, shall not
cause Citizens Capital to be dissolved and its affairs
wound up so long as Citizens Capital at all times has at
least two Partners. Upon the occurrence of any such
event, the business of Citizens Capital shall be
continued without dissolution.
(b) Citizens Capital shall be dissolved and
terminated and its affairs shall be wound up upon the
earliest to occur of any of the following events:
(i) the expiration of the term of Citizens
Capital, as provided in Section 2.4 of this
Agreement;
(ii) upon the bankruptcy, insolvency,
expulsion or dissolution of the General Partner;
(iii) the entry of a decree of judicial
dissolution under Section 17-802 of the Act;
(iv) the written consent of all Partners; or
(v) in accordance with the terms of the
Partnership Preferred Securities.
(c) Upon dissolution of Citizens Capital, the
Liquidator shall promptly notify the Partners of such
dissolution.
Section 11.3 LIQUIDATION.
(a) In the event of the dissolution of
Citizens Capital for any reason, the General Partner (or,
if Citizens Capital is dissolved pursuant to Section
11.2(b)(ii), then a liquidating agent appointed by
Holders of not less than 66 2/3% in Liquidation
Preference of the Partnership Preferred Securities (the
General Partner or such Person so appointed is
hereinafter referred to as the "Liquidator")) shall
commence to wind up the affairs of Citizens Capital and
to liquidate Citizens Capital's assets, including
Citizens Capital's Eligible Investments and/or amounts
deposited in the Eligible Investment Account; provided,
however, that a reasonable time shall be allowed for the
orderly liquidation of the assets of Citizens Capital and
the satisfaction of liabilities to creditors so as to
enable the Partners to minimize the normal losses
attendant upon liquidation. The Partners shall continue
to share all income, losses and distributions during the
period of liquidation in accordance with Articles IV and
V. Subject to the provisions of this Article XI, the
Liquidator shall have full right and unlimited discretion
to determine the time, manner and terms of any sale or
sales of Partnership property pursuant to such
liquidation, giving due regard to the activity and
condition of the relevant market and general financial
and economic conditions.
(b) The Liquidator shall have all of the
rights and powers with respect to the assets and
liabilities of Citizens Capital in connection with the
liquidation and termination of Citizens Capital that the
General Partner would have with respect to the assets and
liabilities of Citizens Capital during the term of
Citizens Capital, and the Liquidator is hereby expressly
authorized and empowered to execute any and all documents
necessary or desirable to effectuate the liquidation and
termination of Citizens Capital and the transfer of any
assets.
(c) Notwithstanding the foregoing, a
Liquidator that is not a General Partner shall not be
deemed a Partner in this Partnership and shall not have
any of the economic interests in Citizens Capital of a
Partner; and such Liquidator may be compensated for its
services to Citizens Capital at normal customary and
competitive rates for its services to Citizens Capital as
reasonably determined by all the Limited Partners.
Section 11.4 DISTRIBUTION IN LIQUIDATION.
Subject to Section 9.3, the proceeds of liquidation shall
be applied in the following order of priority (and
without regard to the provisions of Section 17-804 of the
Act):
(i) to creditors of Citizens Capital,
including Partnership Preferred Security Holders who
are creditors, to the extent otherwise permitted by
law, in satisfaction of the liabilities of Citizens
Capital (whether by payment or the making of
reasonable provisions for payment thereof), other
than liabilities for distributions (including
Distributions) to Partners; and
(ii) following any allocations required under
Section 4.1(c) of the Agreement, to the Partners in
proportion to the Partner's positive Capital Account
balances.
Section 11.5 RIGHTS OF LIMITED PARTNERS. Each
Limited Partner shall look solely to the assets of
Citizens Capital for all distributions with respect to
Citizens Capital and such Partner's capital contribution
(including returns thereof), and such Partner's share of
profits or losses thereof, and shall have no recourse
therefor (upon dissolution or otherwise) against the
General Partner, except under the Partnership Guarantee
Agreement. Except as provided in Section 6.3 and 6.4 of
this Agreement, no Partner shall have any right to demand
or receive property other than cash upon dissolution and
termination of Citizens Capital.
Section 11.6 TERMINATION. Citizens Capital
shall terminate when all of the assets of Citizens
Capital shall have been disposed of and the assets shall
have been distributed as provided in Section 11.4. The
Liquidator shall then execute and cause to be filed a
certificate of cancellation of Citizens Capital.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 AMENDMENTS. Except as provided
by Section 6.2(i), this Agreement may be amended by a
written instrument executed by the General Partner
without the consent of any Limited Partner; provided,
however, that no amendment shall be made, and any such
purported amendment shall be void and ineffective, to the
extent the result thereof would be to cause Citizens
Capital to be treated as anything other than a
partnership for purposes of United States income taxation
or require Citizens Capital to register under the 1940
Act. Notwithstanding any provision to the contrary, in
the event of (i) a liquidation of the Trust for any
reason or (ii) any other distribution which effectively
causes Partnership Preferred Securities to be distributed
to holders of Trust Securities, the General Partner may
amend this Agreement without the consent of the Limited
Partners to provide for (A) orderly dissemination,
purchase, sale, exchange and replacement of such
Partnership Preferred Securities, (B) all other matters
to the extent required by or desirable under then
applicable law and (C) such other matters reasonably
incidental or related thereto; provided, however, that no
such amendment may materially adversely effect the
rights, preferences and value of any class of such
Partnership Securities without the consent of a majority
in interest of the Partners so effected.
Section 12.2 AMENDMENT OF CERTIFICATE. In the
event this Agreement shall be amended pursuant to Section
12.1, the General Partner shall amend the Certificate to
reflect such change if it deems such amendment of the
Certificate to be necessary or appropriate.
Section 12.3 MEETINGS OF PARTNERS.
(a) Meetings of the Limited Partners who are
Holders may be called at any time by the General Partner
to consider and act on any matter on which Limited
Partners are entitled to act under the terms of this
Agreement or the Act. The General Partner shall call a
meeting of Holders if directed to do so by Holders of no
less than 10% in Liquidation Preference as permitted by
this Agreement. Such direction shall be given by
delivering to the General Partner a request in writing
stating that the signing Limited Partners desire to call
a meeting and indicating the general or specific purpose
for which the meeting is to be called.
(b) Notice of any such meeting shall be given
to all Partners not less than seven Business Days nor
more than 60 days prior to the date of such meeting.
Each such notice shall set forth the date, time and place
of the meeting, a description of any matter on which
Holders are entitled to vote and instructions for the
delivery of proxies of written consents.
(c) Any action that may be taken at a meeting
of the Limited Partners may be taken without a meeting if
a consent in writing setting forth the action so taken is
signed by Limited Partners owning not less than the
minimum Interests that would be necessary to authorize or
take such action at a meeting in which all Limited
Partners having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a
meeting shall be given to the Limited Partners entitled
to vote who have not consented in writing. The General
Partner may provide that any written ballot submitted to
the Limited Partners for the purpose of taking any action
without a meeting shall be refunded to Citizens Capital
within a specified time.
(d) Each Partner may authorize any Person to
act for it by proxy on all matters as to which a Partner
is entitled to participate, including waiving notice of
any meeting, or voting or participating at a meeting.
Every proxy must be signed by the Partner or its
attorney-in-fact. No proxy shall be valid after the
expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the Partner executing it.
(e) Each meeting of Partners shall be
conducted by the General Partner or by such other Person
that the General Partner may designate.
(f) The General Partner may establish all
other reasonable procedures relating to meetings of
Partners or the giving of written consents, in addition
to those expressly provided, including notice of time,
place or purpose of any meeting at which any matter is to
be voted on by any Partners, waiver of any such notice,
action by consent without a meeting, the establishment of
a record date, quorum requirements, voting in person or
by proxy or any other matter with respect to the exercise
of any such right to vote.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 NOTICES. All notices provided
for in this Agreement shall be in writing, and shall be
delivered or mailed by first class or registered or
certified mail or, with respect to Citizens Capital and
General Partner, telecopied, as follows:
(a) if given to Citizens Capital, in care of
the General Partner at Citizens Capital's mailing
address set forth below:
Citizens Utilities Capital L.P.
c/o Citizens Utilities Company
High Ridge Park
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: ________________
Telecopy: ________________
(b) if given to the General Partner, at its
mailing address set forth below:
Citizens Utilities Company
Xxxx Xxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: ______________
Telecopy: ______________
(c) if given to any other Partner at the
address set forth on the books and records of
Citizens Capital.
Section 13.2 POWER OF ATTORNEY. Each Holder
does hereby constitute and appoint the General Partner,
and if applicable, any Special Representative appointed
pursuant to Section 6.2(g) of this Agreement, as its true
and lawful representative and attorney-in-fact, in its
name, place and stead to make, execute, sign, deliver and
file (a) any amendment of the Certificate required
because of an amendment of this Agreement or in order to
effect any change in Citizens Capital, (b) this
Agreement, (c) any amendments to this Agreement and (d)
all such other instruments, documents and certificates
which from time to time may be required by the laws of
the United States of America, the State of Delaware or
any other jurisdiction, or any political subdivision or
agency thereof, to effectuate, implement and continue the
valid and subsisting existence of Citizens Capital or to
dissolve Citizens Capital for any other purpose
consistent with this agreement and the transactions
contemplated hereby.
The power of attorney granted hereby is coupled
with an interest and shall (a) survive and not be
affected by the subsequent death, incapacity, disability,
dissolution, termination, or bankruptcy of the Holder
granting the same or the transfer of all or any portion
of such Holder's Interest and (b) extend to such Holder's
successors, assigns and legal representatives.
Section 13.3 ENTIRE AGREEMENT. This Agreement
constitutes the entire agreement among the parties. It
supersedes any prior agreement or understandings among
them, and it may not be modified or amended in any manner
other than as set forth herein.
Section 13.4 GOVERNING LAW. THIS AGREEMENT
AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE GOVERNED
BY AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE
STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE
GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
Section 13.5 EFFECT. Except as herein
otherwise specifically provided, this Agreement shall be
binding upon and inure to the benefit of the parties and
their legal representatives, successors and assigns.
Section 13.6 PRONOUNS AND NUMBER. Wherever
from the context it appears appropriate, each term stated
in either the singular or the plural shall include the
singular and the plural, and pronouns stated in either
the masculine, feminine or neuter shall include the
masculine, feminine and neuter.
Section 13.7 CAPTIONS. Captions contained in
this Agreement are inserted only as a matter of
convenience and in no way define, limit or extend the
scope or intent of this Agreement or any provisions
hereof.
Section 13.8 PARTIAL ENFORCEABILITY. If any
provision of this Agreement, or the application of such
provision to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the
application of such provision to persons or circumstances
other than those to which it is held invalid, shall not
be affected thereby.
Section 13.9 COUNTERPARTS. This Agreement may
contain more than one counterpart of the signature page
and this Agreement may be executed by the affixing of the
signature of each of the Partners to one of such
counterpart signature pages. All of such counterpart
signature pages shall be read as though one, and they
shall have the same force and effect as though all of the
signers had signed a single signature page.
Section 13.10 REMEDIES. The failure of any
party to seek redress for violation of, or to insist upon
the strict performance of, any provision of this
Agreement shall not prevent a subsequent act, which would
have originally constituted a violation, from having the
effect of an original violation. The rights and remedies
provided by this Agreement are cumulative and the use of
any one right or remedy by any party shall not preclude
or waive its right to use any or all other remedies.
Said rights and remedies are given in addition to any
other rights the parties may have by law, statute,
ordinance or otherwise.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above
stated.
GENERAL PARTNER:
CITIZENS UTILITIES COMPANY
a Delaware corporation
By:
Name:
Title:
INITIAL LIMITED PARTNER:
a _________ corporation
By:
Name:
Title:
ANNEX A
FORM OF PARTNERSHIP PREFERRED SECURITY
[FORM OF FACE OF SECURITY]
Number of Partnership
Certificate Number Preferred Securities
[CUSIP NO. ]
Certificate Evidencing Partnership Preferred Securities
of
Citizens Utilities Capital L.P.
___% Convertible Partnership
Preferred Securities (liquidation
preference $50 per Partnership
Preferred Security)
Citizens Utilities Capital L.P., a limited
partnership formed under the laws of the State of
Delaware (the "Partnership"), hereby certifies that
(the "Holder") is the registered owner of
preferred securities of Citizens Capital representing
limited partnership interests in Citizens Capital, which
are designated the __% Convertible Partnership Preferred
Securities (liquidation preference $50 per Preferred
Security) (the "Partnership Preferred Securities"). The
Partnership Preferred Securities are fully paid and are
nonassessable interests in Citizens Capital, as to which
the Partners in Citizens Capital who hold the Partnership
Preferred Securities (the "Partnership Preferred Security
Holders"), in their capacities as Partners in Citizens
Capital, will have no liability solely by reason of being
Partnership Preferred Security Holders (subject to the
obligation of a Partnership Preferred Security Holder to
repay any funds wrongfully distributed to it), and are
freely transferable on the books and records of Citizens
Capital, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper
form for transfer. The powers, preferences and special
rights and limitations of the Partnership Preferred
Securities are set forth in, and this certificate and the
Partnership Preferred Securities are set forth in, and
this certificate and the Partnership Preferred Securities
represented hereby are issued and shall in all respects
be subject to the terms and provisions of, the Amended
and Restated Limited Partnership Agreement of Citizens
Capital dated as of _________ ___, 1995, as the same may
be amended from time to time in accordance with its terms
(the "Limited Partnership Agreement"), authorizing the
issuance of the Partnership Preferred Securities and
determining the powers, preferences and other special
rights and limitations, regarding Distributions, voting,
return of capital and otherwise, and other matters
relating to the Partnership Preferred Securities.
Capitalized terms used herein but not defined herein
shall have the meaning given them in the Limited
Partnership Agreement. The Holder is entitled to the
benefits of the Partnership Preferred Securities
Guarantee Agreement dated as of ____________, 1995 (the
"Partnership Guarantee Agreement") executed by Citizens
Utilities Company (the "Company") to the extent provided
therein. Citizens Capital will furnish a copy of the
Limited Partnership Agreement and the Partnership
Guarantee Agreement to the Holder without charge upon
written request to Citizens Capital at its principal
place of business or registered office.
IN WITNESS WHEREOF, Citizens Capital has
executed this certificate this _____ day of ___________
1995.
CITIZENS UTILITIES CAPITAL L.P.
By: CITIZENS UTILITIES COMPANY
its General Partner
By:
Name:
Title:
[FORM OF REVERSE OF SECURITY]
The Holder, by accepting this certificate, is
deemed to have agreed (i) to be bound by the provisions
of the Limited Partnership Agreement and (ii) that the
Convertible Debentures acquired by Citizens Capital with
the proceeds from the issuance of the Partnership
Preferred Securities are subordinated and junior in right
of payment to all Senior Indebtedness of Citizens as and
to the extent provided in the Convertible Debentures and
(iii) that the Partnership Guarantee Agreement ranks (x)
subordinate and junior in right of payment to all Senior
Indebtedness of Citizens, and (y) PARI PASSU with the
most senior preferred or preference stock now or
hereafter issued by Citizens and with any guarantee now
or hereafter entered into by Citizens in respect of any
preferred or preference stock of any Affiliate of
Citizens, and (z) senior to Common Stock and any other
classes or series of capital stock of Citizens or any of
its Affiliates which by its express terms ranks junior in
the payment of distributions and amounts on liquidation,
dissolution, and winding-up to the Partnership Preferred
Securities, in each case, as and to the extent provided
in the Partnership Guarantee Agreement. Upon receipt of
this certificate, the Holder is admitted to the
Partnership as a Limited Partner, is bound by the Limited
Partnership Agreement and is entitled to the benefits
thereunder.
Distributions payable on each Partnership
Preferred Security will be fixed at a rate per annum of
% (the "Coupon Rate") of the stated liquidation
preference of $50 per Partnership Preferred Security,
such rate being the rate of interest payable on the
Convertible Debentures to be held by Citizens Capital.
Distributions in arrears for more than one quarter will
bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes payment in
the form of cash or shares of common stock of the Company
("Common Stock"). A Distribution is payable only to the
extent that payments are made in respect of the
Convertible Debentures held by Citizens Capital and to
the extent Citizens Capital has funds available therefor.
The amount of Distributions payable for any period will
be computed for any full quarterly Distribution period on
the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution
period for which Distributions are computed,
Distributions will be computed on the basis of the actual
number of days elapsed per 30-day month.
Except as otherwise described below,
distributions on the Partnership Preferred Securities
will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in arrears, on
__________ ___, ________ ___, __________ ___ and
__________ ___ of each year, commencing on __________
___, 1996, to Holders of record on the relevant Regular
Record Dates (as such term is defined in the Indenture),
which payment dates shall correspond to the interest
payment dates on the Convertible Debentures. The
Debenture Issuer has the right under the Indenture to
defer payments of interest from time to time on the
Convertible Debentures for a period not exceeding 20
consecutive quarters (each an "Extension Period") and, as
a consequence of such deferral, Distributions will also
be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at
the Coupon Rate compounded quarterly during any such
Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend
such Extension Period; provided that such Extension
Period together with all such previous and further
extensions thereof may not exceed 20 consecutive
quarters. Payments of accrued Distributions will be
payable to Holders as they appear on the books and
records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any
Extension Period and the payment of all amounts then due,
the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
The Partnership Preferred Securities shall be
redeemable as provided in the Limited Partnership
Agreement.
The Partnership Preferred Securities shall be
convertible into shares of Common Stock, through (i) the
exchange of Partnership Preferred Securities for a
portion of the Convertible Debentures and (ii) the
immediate conversion of such Convertible Debentures into
Common Stock, in the manner and according to the terms
set forth in the Limited Partnership Agreement.
NOTICE OF CONVERSION
To: [Name of Bank],
As Conversion Agent
Citizens Utilities Capital L.P.
The undersigned owner of these Partnership Preferred
Securities hereby irrevocably exercises the option to convert
these Partnership Preferred Securities, or the portion below
designated, into shares of Common Stock, Series A, par value $.25
per share, of CITIZENS UTILITIES COMPANY ("Common Stock") in
accordance with the terms of the Amended and Restated Agreement
of Limited Partnership (the "Limited Partnership Agreement"),
dated as of _________ ___, 1995, by and among Citizens Utilities
Company, as the general partner, ____________, as initial limited
partner, and such other Persons (as defined therein) who become
Limited Partners (as defined therein) as provided in the Limited
Partnership Agreement. Pursuant to the aforementioned exercise
of the option to convert these Partnership Preferred Securities,
the undersigned hereby directs the Conversion Agent (as that term
is defined in the Limited Partnership Agreement) to (i) exchange
such Partnership Preferred Securities for a portion of the
Convertible Debentures (as that term is defined in the Limited
Partnership Agreement) held by the Limited Partnership (as such
term is defined in the Limited Partnership Agreement) (at the
rate of exchange specified in the Limited Partnership Agreement)
and (ii) immediately convert such Convertible Debentures on
behalf of the undersigned, into Common Stock (at the conversion
rate specified in the Limited Partnership Agreement).
The undersigned does also hereby direct the Conversion
Agent that the shares issuable and deliverable upon conversion,
together with any check in payment for fractional shares, be
issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If
shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.
This Notice of Conversion and any action taken
hereunder shall be governed by the terms of the Limited
Partnership Agreement.
Date: ____________, ____
in whole __ in part
Number of Partnership Preferred
Securities to be converted:
___________________
If a name or names other than the
undersigned, please indicate in the
spaces below the name or names in
which the shares of Common Stock
are to be issued, along with the
address or addresses of such person
or persons
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other
Identifying Number
ANNEX B
NOTICE OF DISTRIBUTION ELECTION
TO: _________________,
As Election Agent
Citizens Utilities Capital L.P.
The undersigned owner of ____% Convertible Partnership
Preferred Securities (liquidation preference $50 per preferred
security) (the "Partnership Preferred Securities"), issued
pursuant to the Amended and Restated Agreement of Limited
Partnership (the "Limited Partnership Agreement"), dated as of
___________ ___, 1995, by and among Citizens Utilities Company,
as the general partner, ____________, as initial limited partner,
and such other Persons (as defined therein) who become Limited
Partners (as defined therein) as provided in the Limited
Partnership Agreement, hereby irrevocably elects to receive, in
the form prescribed below, Distributions (as such term is defined
in the Limited Partnership Agreement) due and payable to the
undersigned on the four Distribution Payment Dates (as such term
is defined in the Limited Partnership Agreement) occurring after
the Election Period during which this Notice of Distribution
Election is being submitted.
The Undersigned, as Holder of [NUMBER OF PARTNERSHIP
PREFERRED SECURITIES HELD] Partnership Preferred Securities,
elects to receive payment of Distributions due and payable on the
next four Distribution Payment Dates in the form:
Choose one:
( ) Cash
( ) An Equivalent Value of shares Common Stock Series A,
par value $.25 per share, of Citizens Utilities Company
("Common Stock")
[(A) ( ) Cash for [NO. OF PARTNERSHIP PREFERRED SECURITIES
TO RECEIVE DISTRIBUTIONS IN CASH];
(B) ( ) Shares of Common Stock Series A, par value $.25
per share, of Citizens Utilities Company ("Common
Stock") [NO. OF PARTNERSHIP PREFERRED SECURITIES
TO RECEIVE DISTRIBUTIONS IN COMMON STOCK].](1)
_____________________
1 Only holders of Partnership Preferred Securities who
hold on behalf of more than one beneficial owner of
Partnership Preferred Securities may choose more
than one form in which to receive Distributions.
Furthermore, such holder of multiple beneficial
owners' interests in Partnership Preferred
Securities may elect only one form of Distribution
for each such beneficial owner.
The undersigned does also hereby direct the addressee
that any and all Distributions in the form of Common Stock made
pursuant to this Notice of Distribution Election be delivered to
and issued in the name of the undersigned, unless a different
name/different names has/have been indicated in the assignment
below. If such shares are to be issued in the name/names of a
person/persons other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.
This Notice of Distribution Election and any action
taken hereunder shall be governed by the terms of the Limited
Partnership Agreement.
Date: ____________, ____
(Applicable only if box (B) has
been checked.) If a name or names
other than the undersigned, please
indicate in the spaces below the
name or names in which shares of
Common Stock are to be issued,
along with the address or addresses
of such person or persons
Signature
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other
Identifying Number
ANNEX C
STATEMENT OF COMMON DEFINITIONS
TABLE OF CONTENTS
Page
ARTICLE I
DEFINED TERMS
Section 1.1 DEFINITIONS . . . . . . . . . . . . . . . . . 4
Section 1.2 HEADINGS . . . . . . . . . . . . . . . . . . . 14
ARTICLE II
CONTINUATION OF CITIZENS CAPITAL;
ADMISSION OF PARTNERSHIP PREFERRED SECURITIES HOLDERS;
WITHDRAWAL OF INITIAL LIMITED PARTNER
Section 2.1 CONTINUATION OF CITIZENS CAPITAL . . . . . . . 14
Section 2.2 NAME . . . . . . . . . . . . . . . . . . . . . 14
Section 2.3 BUSINESS OF CITIZENS CAPITAL . . . . . . . . . 14
Section 2.4 TERM . . . . . . . . . . . . . . . . . . . . . 15
Section 2.5 REGISTERED AGENT AND OFFICE . . . . . . . . . 15
Section 2.6 PRINCIPAL PLACE OF BUSINESS . . . . . . . . . 15
Section 2.7 NAME AND BUSINESS ADDRESS OF
GENERAL PARTNER . . . . . . . . . . . . . . . 16
Section 2.8 QUALIFICATION TO DO BUSINESS . . . . . . . . . 16
Section 2.9 ADMISSION OF HOLDERS OF PARTNERSHIP
PREFERRED SECURITIES; WITHDRAWAL
OF INITIAL LIMITED PARTNER . . . . . . . . . . 16
ARTICLE III
CAPITAL CONTRIBUTIONS; REPRESENTATION OF
PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST;
CAPITAL ACCOUNTS
Section 3.1 CAPITAL CONTRIBUTIONS . . . . . . . . . . . . 17
Section 3.2 PARTNERSHIP PREFERRED SECURITY
HOLDER'S INTEREST REPRESENTED
BY L.P. CERTIFICATE . . . . . . . . . . . . . 17
Section 3.3 CAPITAL ACCOUNTS . . . . . . . . . . . . . . . 18
Section 3.4 INTEREST ON CAPITAL CONTRIBUTIONS . . . . . . 18
Section 3.5 WITHDRAWAL AND RETURN OF CAPITAL
CONTRIBUTIONS . . . . . . . . . . . . . . . . 18
Section 3.6 INVESTMENT OF CAPITAL CONTRIBUTIONS . . . . . 18
ARTICLE IV
ALLOCATIONS
Section 4.1 PROFITS AND LOSSES . . . . . . . . . . . . . . 19
Section 4.2 SPECIAL ALLOCATIONS . . . . . . . . . . . . . 21
Section 4.3 OTHER ALLOCATION PROVISIONS . . . . . . . . . 22
Section 4.4 ALLOCATIONS FOR INCOME TAX PURPOSES . . . . . 24
Section 4.5 WITHHOLDING . . . . . . . . . . . . . . . . 24
ARTICLE V
DISTRIBUTIONS
Section 5.1 DISTRIBUTIONS . . . . . . . . . . . . . . . . 25
Section 5.2 LIMITATIONS ON DISTRIBUTIONS . . . . . . . . . 25
ARTICLE VI
ISSUANCE OF PARTNERSHIP PREFERRED SECURITIES
Section 6.1 GENERAL PROVISIONS REGARDING
PARTNERSHIP PREFERRED SECURITIES . . . . . . . 25
Section 6.2 PARTNERSHIP PREFERRED SECURITIES . . . . . . . 27
Section 6.3 CONVERSION RIGHTS OF PARTNERSHIP
PREFERRED SECURITIES . . . . . . . . . . . . . 34
Section 6.4 DISTRIBUTION ELECTION . . . . . . . . . . . . 40
ARTICLE VII
BOOKS OF ACCOUNT, RECORDS AND REPORTS
Section 7.1 BOOKS AND RECORDS . . . . . . . . . . . . . . 44
Section 7.2 ACCOUNTING METHOD . . . . . . . . . . . . . . 44
Section 7.3 ANNUAL AUDIT . . . . . . . . . . . . . . . . . 45
ARTICLE VIII
POWERS, RIGHTS AND DUTIES
OF THE LIMITED PARTNERS
Section 8.1 LIMITATIONS . . . . . . . . . . . . . . . . . 45
Section 8.2 LIABILITY . . . . . . . . . . . . . . . . . 45
Section 8.3 PRIORITY . . . . . . . . . . . . . . . . . . 46
ARTICLE IX
POWERS, RIGHTS AND DUTIES
OF THE GENERAL PARTNER
Section 9.1 AUTHORITY . . . . . . . . . . . . . . . . . . 46
Section 9.2 POWER AND DUTIES OF GENERAL PARTNER . . . . . 46
Section 9.3 OBLIGATIONS AND EXPENSES PAYABLE
BY GENERAL PARTNER . . . . . . . . . . . . . . 48
Section 9.4 LIABILITY . . . . . . . . . . . . . . . . . . 49
Section 9.5 INVESTMENT COMPANY OR TAX ACTIONS . . . . . . 49
Section 9.6 OUTSIDE BUSINESSES . . . . . . . . . . . . . . 50
Section 9.7 LIMITS ON GENERAL PARTNER'S POWERS . . . . . . 50
Section 9.8 TAX MATTERS PARTNER . . . . . . . . . . . . . 52
Section 9.9 CONSOLIDATION, MERGER OR SALE OF ASSETS . . . 53
ARTICLE X
TRANSFERS OF INTERESTS BY PARTNERS
Section 10.1 TRANSFER OF INTERESTS . . . . . . . . . . . . 54
Section 10.2 TRANSFER OF LP CERTIFICATES . . . . . . . . . 55
Section 10.3 PERSONS DEEMED PARTNERSHIP PREFERRED
SECURITY HOLDERS . . . . . . . . . . . . . . . 56
Section 10.4 BOOK ENTRY PROVISIONS . . . . . . . . . . . . 56
Section 10.5 REGISTRAR, PAYING AGENT AND
CONVERSION AGENT . . . . . . . . . . . . . . . 58
ARTICLE XI
WITHDRAWAL, DISSOLUTION;
LIQUIDATION AND DISTRIBUTION OF ASSETS
Section 11.1 WITHDRAWAL OF PARTNERS . . . . . . . . . . . . 58
Section 11.2 DISSOLUTION OF CITIZENS CAPITAL . . . . . . . 59
Section 11.3 LIQUIDATION . . . . . . . . . . . . . . . . . 59
Section 11.4 DISTRIBUTION IN LIQUIDATION . . . . . . . . . 60
Section 11.5 RIGHTS OF LIMITED PARTNERS . . . . . . . . . . 61
Section 11.6 TERMINATION . . . . . . . . . . . . . . . . . 61
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 AMENDMENTS . . . . . . . . . . . . . . . . . . 61
Section 12.2 AMENDMENT OF CERTIFICATE . . . . . . . . . . . 62
Section 12.3 MEETINGS OF PARTNERS . . . . . . . . . . . . . 62
ARTICLE XIII
MISCELLANEOUS
Section 13.1 NOTICES . . . . . . . . . . . . . . . . . . . 63
Section 13.2 POWER OF ATTORNEY . . . . . . . . . . . . . . 64
Section 13.3 ENTIRE AGREEMENT . . . . . . . . . . . . . . . 64
Section 13.4 GOVERNING LAW . . . . . . . . . . . . . . . . 65
Section 13.5 EFFECT . . . . . . . . . . . . . . . . . . . . 65
Section 13.6 PRONOUNS AND NUMBER . . . . . . . . . . . . . 65
Section 13.7 CAPTIONS . . . . . . . . . . . . . . . . . . . 65
Section 13.8 PARTIAL ENFORCEABILITY . . . . . . . . . . . . 65
Section 13.9 COUNTERPARTS . . . . . . . . . . . . . . . . . 65
Section 13.10 REMEDIES . . . . . . . . . . . . . . . . . . . 65
